Renewable energy has become a mainstay of power generation across the nation and is continuing to grow rapidly, as states, municipalities, and organizations set ever more ambitious carbon reduction goals. Hurricane Ian has provided yet another example of why the swift move to cleaner energy is so critical. And when you add in today’s skyrocketing energy costs—with no relief in sight—the case for renewables becomes even stronger.

The Inflation Reduction Act is bringing increased incentives and new options for tax-exempt entities to benefit from tax credits more directly, especially for solar. And by including storage with your project, you can shave peak usage to further reduce electricity costs. Read on to learn how nonprofits and municipalities can benefit from taking advantage of everything solar has to offer. The time is now.

1. Solar Power Saves You Even More When Energy Prices are High

Energy costs are already one of the top three budget centers for many organizations. And with current electricity prices higher by as much as 50% or more for this winter and beyond, budget pain is that much greater. Solar power is generally cheaper than grid-delivered electricity. As energy prices rise, so too does the price spread between traditional and solar power, increasing the amount you save. Moreover, depending on the structure of your agreement—for example, PowerOptions’ solar program typically utilizes a PPA (Power Purchase Agreement) structure—you can lock in your low price for 20 years or more, hedging against the continuing rise in energy prices. This means more funds—and less pain—in your budget.

2. The Inflation Reduction Act Brings Generous New Incentives and a “Direct-Pay” Option for Nonprofits to Benefit from Tax Credits

The Inflation Reduction Act (IRA) provides for several grants and other incentives geared toward making solar more economical. Most notable is the Investment Tax Credit (ITC), which has increased from 24% to 30%, with a total potential credit of 60% depending on which criteria are met. The IRA also reinstates the Production Tax Credit (PTC), which can be taken instead of the ITC and is based on the amount of kilowatt-hours produced. And for the first time, these tax credits are available to tax-exempt entities through a new “direct-pay” option, effectively allowing nonprofits and municipalities to trade credits for cash. 

Additionally, there are grants and other incentives made available by the Federal Infrastructure Law, which was passed in the fall of 2021. The new law authorized billions of dollars in grants for solar improvements for nonprofit and municipal buildings, including funding for solar panels, storage, research and development, and recycling.

3. If You Cannot Host an Array, Remote Solar Can Provide Savings

Participating in a remote solar project allows your organization to promote and save from solar, without the need to build or host an array. When a remotely located solar project produces electricity and feeds it into the grid, the project accrues credits which can be applied to reduce electricity bills. You can buy these credits at a discount to reduce your electricity bills.

4. Solar Plus Storage Brings Added Benefits

There are additional state and federal incentives for solar plus storage—and for stand-alone storage to an extent. Storage opens possibilities for demand reduction including peak shaving, where battery power is utilized during times of peak prices; and demand response, where customers are compensated for reducing electricity usage during certain hours.

Solar power is becoming increasingly more popular, and with historic economic benefits and incentives, now may be the perfect time to undertake a project. In addition to putting more money back in your pocket, adding a solar system to your building is a great way to do your part in fighting climate change — solar power is a clean and renewable energy source that doesn’t pollute our air or produce harmful greenhouse gasses. Powered via the sun’s energy, solar panels decrease your need to purchase carbon-emitting electricity from the grid, and therefore reduce your CO2 emissions and carbon footprint. After all, a single solar panel can offset more carbon emissions than 10 mature trees. In addition, going solar can demonstrate your commitment to sustainability and aid in meeting state and federal climate goals.

PowerOptions Makes Solar Accessible for Nonprofits and Public Entities

Established in 2011, PowerOptions solar program has become one of the largest in the region. Partnering with more than 90 organizations, our project portfolio is 80 MWs and growing. By partnering with PowerOptions on your solar project, organizations benefit from:

• No capital or upfront costs
• No operation or maintenance responsibilities
• 20-year fixed price
• Opportunity to own the solar array
• Options for remote solar

And PowerOptions stays with you throughout the entire process, providing guidance and support on all your energy needs, like we did for Salem State University.