Sun Light & Power Offers Unique Funding Model for Solar
Churches, like other organizations, often utilize power purchase agreements (PPAs) to finance their solar PV installations. But in California, some houses of worship have employed a new financing model – crowd funding – to finance their solar energy projects with the help of Sun Light & Power.
An example of a typical funding model for a solar installation: Last week, Solis Partners announced it had installed a 125-KW ground-mounted solar array for the Church of the Resurrection in the Burlington County township of Delran, N.J. The 518-panel array, which is installed behind the parish center, will offset 80 percent of the parish’s annual electricity usage. The system will produce 165,000 KWh of electricity annually.
Solis Partners designs, constructs and operates solar power systems through its full-service PPA, which will allow the church to receive all the benefits of solar electric generation without any capital cost. Under the PPA, Solis Partners will retain ownership of the system for 15 years, during which time it will maintain and operate the system. The clean electricity generated will be sold to the Church of the Resurrection at a large discount to their current utility cost. After 15 years, the parish will have the option to assume ownership of the system and receive free electricity for the remaining life of the system, which is more than 25 years.
But in California, Berkeley’s Sun Light & Power has pioneered a new financing model for solar installations for non-profits.
One of the reasons PPAs are so popular is because they allow entities with “tax credit appetites” to utilize the federal and state tax credits from a solar project,” says Gary Gerber, president and CEO of Sun Light & Power. While non-profits don’t pay taxes and therefore can’t use the tax credits from a solar project, companies or individuals who fund a solar project through a PPA, can use those credits.
“It’s all about the money,” says Gerber. “I thought I was a solar engineer, but I’m actually a financier.”
He explains that crowd funding is essentially “a democratization of the PPA.” The owners of the PPA are the parishioners. They fund the project and then share in the tax advantages and income from selling the electricity to the church. Sun Light & Power has done several of these crowd funding solar projects for non-profits in the San Francisco Bay Area, including:
- St. Stephens Church, Orinda
- Zen Center, San Francisco
- Christ the King Lutheran Church, Fremont
- First Chinese Baptist Church, San Francisco
- St. John’s Episcopal Church, Oakland
- Greater Richmond Interfaith Program, Richmond
- NorthCreek Church, Walnut Creek
A pro of crowd funding: the parishioners don’t require as good a return on investment as a disinterested private company.
A con of crowd funding: It will require more than a cookie-cutter PPA agreement.
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