As a values-driven organization, installing solar panels on your building is a great decision. Solar can lower your operational costs, allowing you to dedicate more resources to your core mission. And an on-site installation makes a statement to the the community that you care for our planet and its future.
Unfortunately, tax incentives are crucial to making solar economical. To take advantage of these incentives, you must partner with a “tax equity” finance partner: a bank or private equity firm that invests in projects for the tax benefits.
U.S. Clean Energy Fund makes this possible.
The USCEF Non-Profit Coalition
U.S. Clean Energy Fund is assembling a coalition of non-profit organizations and places of worship that plan to install on-site solar. By joining together, we can greatly lower the cost of tax equity financing. A diversified portfolio of projects is more attractive for investors, and fixed-cost legal overhead can be spread across many customers.
Our goal is to combine 1,000 kW of solar projects for financing by April 2017.
How it Works
When you join the coalition, you will enter into a Power Purchase Agreement (PPA) with USCEF. This means that:
- We will install the solar equipment on your property at no cost to you.
- Each month, your utility will credit you for the electricity generated by the solar.
- Each month, USCEF will bill you for this electricity.
- At any time, you can “buy out” your PPA so you fully own your system.
The energy price under the PPA starts at 11¢/kWh, and increases by 3% each year. In many cases, this will be cheaper than the corresponding utility credit — so you will come out ahead. However, electric utilities have complicated pricing models, and every situation is a bit different.
Contact us today and we can help you analyze your potential savings with a solar PPA.
Buying out your PPA
A big advantage of a PPA is the potential to buy out your system anytime after the tax benefits have been used up (after Year 5). After the 5th year, the projected buyout price is 65% of the installation price. From there, it decreases each year over the lifetime of the system.
Unfortunately, IRS rules prevent USCEF from guaranteeing a buyout price ahead of time. Instead, we set an annual schedule for minimum buyout price, and each year the actual buyout price is set as whichever is greater between this minimum and the “fair market value” (FMV). As solar installation prices continue to fall, we anticipate that FMV will be low enough that it will not affect the buyout price.
PPA Term Length
A USCEF PPA has a 7-year minimum committment. After this time, you can choose to either extend the PPA (with an updated energy price), purchase the system from USCEF, or have the solar panels removed from your property. If you would prefer to lock in an energy price for a longer term up front, we can do that too!
True Environmental Benefit
As the solar on your property generates energy, it will also generate Renewable Energy Credits (RECs) — certificates which represent the “cleanliness” of the power. Most PPA providers and Community Solar Garden operators will sell these RECs to a 3rd party (which will use them to offset coal-generated power). When this happens, you are effectively no longer using solar energy at your facility!
When you choose a USCEF PPA, we will retire the (RECs) on your behalf whenever possible*. This prevents them from being used by a corporation to offset dirty energy. And it means that you can truly claim to be using clean solar energy.
If you have already chosen an installer, that’s great! We will work directly with them to finance the installation. If you have not chosen an installer yet, we will take care of it — we partner with several different companies in the Minneapolis/St. Paul area.
Contact Us Today
If you’re interested in learning more, fill out the form below to get more information. We’ll be in touch as soon as possible.
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* Note that with Xcel Solar Rewards, the RECs are purchased by Xcel during the 10-year rewards period. USCEF compensates for this by purchasing our own RECs in the free market (at up to 2¢/kWh) and retiring them.