How nonprofits can finance solar and storage

A recent webinar from the Clean Energy Group unpacks how nonprofits can take advantage of the Inflation Reduction Act’s Direct Pay Provision.

May 15, 2025 Phoebe Skok

The Lawrence Family Jewish Community Center in La Jolla, California worked with CollectiveSun to add a 463.8 kW rooftop and carport solar system

Image: Lawrence Family Jewish Community Center

Nonprofits around the country are increasingly exploring solar and battery storage to power their operations and reinforce their role as community support hubs. Despite the clear resilience benefits, the upfront cost remains a significant barrier.

A recent webinar hosted by the Clean Energy Group (CEG) unpacked some ways nonprofits can finance clean energy projects.

CEG moderator Anna Adamsson was joined by Andreas Karelas, the founder and executive director of RE-volv, and Nicole Withrow, the director of sales at CollectiveSun. Both organizations help mission-driven groups overcome financial and technical obstacles to solar and storage adoption.

Adamsson explained that the Inflation Reduction Act’s (IRA)direct pay provision is a “gamechanger” for tax-exempt organizations, as nonprofits can now take advantage of the federal Investment Tax Credit and receive reimbursement for 30% to 70% of a clean energy project’s cost.

Still, though the reimbursement comes as a check from the IRS, it can take over a year to arrive after installation. Many nonprofits still need upfront capital.

That’s where financing organizations like RE-volv and CollectiveSun come in, as they offer pathways like loans and third-party ownership models to help bridge the gap.

Solar loans lets the nonprofit own their system and receive the full benefit of the tax credit. RE-volv, for instance, supports organizations through this process and helps them apply for direct pay.

Alternatively, a power purchase agreement or solar power agreement, which are structured like a lease, lets a third party (like CollectiveSun) own the system and pass along some of the savings while taking on the tax filing, construction and long-term maintenance responsibilities.

“We always ask: do you have the construction management expertise, and are you comfortable bearing construction risk and long-term ownership risk?” said Withrow. “What option you go with will depend on your organization’s internal culture and decision-makers.”

Karelas explained that installing clean energy systems can help nonprofit organizations save on electricity bills, leaving more money for programming.

“Particularly as state and federal programs are being unfunded or cut, people will be turning to the nonprofits in their community even more than before,” he said, also noting solar’s ripple effect.

“When one person installs solar, they’ll influence their neighbor to go solar as well. When a nonprofit or house of worship goes solar, you’ll see on average 80 solar residential installations in the next five years,” Karelas added, highlighting a previous RE-volv project at a church in Compton, California that inspired five neighboring houses of worship to begin their own solar journeys.

Both speakers stressed the importance of “right-sizing” systems to ensure cash-flow-positive outcomes from day one, particularly when battery storage is included. While storage enhances resilience, Karelas said it can impact short-term savings, so careful project design and financial modeling are essential.

Getting started can be tricky. Withrow explained that a lot of times, “contractors are at a real loss for solar nonprofit financing” and that they might be “Google searching and asking ChatGPT how to finance a solar project.”

There are resources available, she added, and assembling a dedicated team early on within the organization can make it easier to navigate the technical and financial details.

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