School & Nonprofit Solar

Solar — one more powerful way you will positively impact your community

The benefits of solar are not just for residents and small businesses! Solar for schools and nonprofits extends the financial and environmental benefits of clean energy to entire communities.

Solar energy is a fantastic way for schools and nonprofit organizations to lock in reliable costs of electricity for decades while reducing their impact on the climate.

Benefits of solar for schools and nonprofits:

Full access to solar benefits: Schools and nonprofits can now take advantage of the federal tax credit through a new "direct payment" option, granting them a more viable path to ownership.
Savings for the entire community: Solar offers significant electric cost savings and additional revenue from excess energy generation, through Net Metering and Renewable Energy Credits (RECs).
Protection from rising utility costs: Factoring in upfront cost, including operation and maintenance, solar provides schools and nonprofits the lowest average cost of energy per kWh over system life, an estimated 50%-75% lower than grid electricity.

Access Full Solar Benefits through Direct Pay

"Direct pay" allows non-taxpaying entities to access the federal tax credit by receiving a government rebate for the 30% tax credit value in 2023 and from 2024 onwards, provided domestic content requirements are met. Schools, towns, and nonprofits that previously did not have any access to federal incentives and project ownership can now receive this direct payment once the project is complete.

ReVision manages projects through both direct payment and solar Power Purchase Agreements (PPA). PPAs allow schools and nonprofits, who cannot access the upfront capital, to enjoy the same benefits of clean solar power afforded to businesses and homeowners. Our team can help you assess whether your school or nonprofit is eligible for our PPA financing program.

A Path to Ownership and Full Solar Benefits

The passage of the Inflation Reduction Act Bill in 2022 introduced a "direct pay" provision (also called "elective pay"), allowing non-taxpaying entities to access the 30% federal solar tax credit.

Schools and nonprofits can now receive a direct payment from the government for 30% of the project cost after completion. That gives them a much stronger path to direct ownership of their solar project instead of relying on third-party investor financing through a Power Purchase Agreement (PPA).

While ReVision Energy cannot give tax advice, we can share resources and help interested entities navigate the project requirements needed to qualify for Direct Pay. Below are some frequently asked questions we have encountered from current customers:

What type of entities are eligible for Direct/Elective Pay?

The following types of organizations are eligible (this is not an exhaustive list):

Organizations that are exempt from tax by § 501(a) are eligible for elective pay. This includes:
- All organizations described in § 501(c), such as public charities, private foundations, social welfare organizations, labor organizations, business leagues, and others; and
- Religious or apostolic organizations under § 501(d).
State, local, and political subdivisions. This includes:
- Cities/towns, counties, water districts, school districts, economic development agencies; and
- Public universities and hospitals that are agencies and instrumentalities of states or political subdivisions.
Indian tribal governments. This includes:
- The tribal government, political subdivisions thereof; and
- Any agency or instrumentality of a tribal government or political subdivision.
Rural electric cooperatives (any corporation operating on a cooperative basis that is engaged in furnishing electric energy to persons in rural areas is eligible.)

What credits and incentives can be accessed with Direct Pay?

There are numerous credits available to entities through Direct Pay, with more options and guidelines emerging from the IRS. The most significant credits available are:

Energy Credit (Section 48 ITC)
Clean Electricity Investment Credit (Section 48E)
Commercial Clean Vehicle Credit (Section 45W)
Credit for Alternative Fuel Vehicle Refueling/ Recharging Property (Section 30C)

What are the project requirements for Direct Pay?

To be eligible for Direct Pay, the project in question must meet certain requirements outlined by the government. These requirements are nuanced and can be complicated; ReVision Energy can help navigate the details of the project in question to meet the specific requirements:

The entity generally must own the underlying eligible credit property
In addition to being an entity eligible for Direct Pay, the entity must also meet the underlying requirements of the tax credit
A project over 1 MW AC needs to meet certain domestic content requirements in order for the owning entity to receive the full amount of the relevant tax credit(s).

The direct pay is an alternative to the PPA, which is a tool to finance a system. When an entity elects to go with a PPA they don't own the system, the investor owns the system, and the investor receives the tax credit. If the entity choses to purchase their system directly, that's when they would take the direct pay option.

For nonprofits and schools that cannot purchase their project outright and access the benefits of Direct Pay, a solar Power Purchase Agreement (PPA) is an innovative financial tool which eliminates the primary barrier to going solar: access to upfront capital.

Instead of requiring a capital investment, ReVision Energy pairs the interested party with local mission-motivated solar investors who can take advantage of federal tax incentives not available to nonprofits and schools. The investor partner owns and operates the array at the municipality's location and sells the solar power to the host at below-market rates with $0 upfront cost.

Innovative Financing Tool

PPA financing offers solutions to the challenges standing between non-taxed organizations that cannot choose the Direct Pay option and their potential solar savings:

Investor owns/operates solar at no cost to the host (school or nonprofit)
Nonprofit buys discounted solar power and has option to buy array after 5 years
Nonprofit locks in energy savings for decades to come

Long-Term Ownership

ReVision Energy PPAs offer a 6-20 year term, with a flexible discounted early buyout option after 5 years. Long-term ownership ensures the lowest long-term levelized cost of electricity from any source at 50%-75% below existing or projected utility costs while cutting carbon pollution.

Learn more about Power Purchase Agreements →

With the transition to more affordable solar through PPAs, schools and nonprofits can protect themselves from rising utility costs and enjoy significant savings. Switching to local solar energy can also mean more room in a budget to invest in jobs, community support, or other projects.

For New England schools and nonprofits, solar presents an especially strong set of benefits that can be extended to our communities all year round. New England’s solar resource is strong, thanks to bright, cold winters and long summer days. Annually, a solar array in Maine or New Hampshire will produce a comparable amount of power to the same system installed in Houston, Texas. And since electricity is relatively expensive in the Northeast, the value of the New England system is higher than that of the system in Texas.

Solar is the clear environmental winner, with no moving parts, long-lasting equipment, and no emissions in the generation of power. In short, going solar is good for your budget, good for your community, and good for the planet!