Non-Profit Organization Financing Options

Non-Profit Organizations in New York now have many financial options when 'Going Solar'. Your selection of a financing option may affect who receives the incentives.

Cash

Non-Profits purchase a solar PV system with cash. In this option, the non-profit would receive 100% of all available federal, state, utility, or other incentives.

Lease

A solar lease is a financing structure whereby a third-party developer or financier develops, purchases, owns, and operates a solar PV system for an end user who pays a set monthly rate for the use of the solar system. Typically, the monthly rate for a solar lease is the same every month regardless of how much electricity is produced by the solar PV system, unless there is a lease escalator whereby the end user’s lease payments increase by a marginal percentage each year. The end user does not have to provide any upfront capital for the solar PV system. However, the third-party developer or financier takes a portion of the available federal tax incentives because they require a higher return on investment.  The remaining majority of incentives are then built into the monthly lease price. Solar lease terms typically last between 10 and 25 years. Many solar installers provide their customers with a solar lease option.

Power Purchase Agreements (PPAs)

A Power Purchase Agreement, or PPA, is a financing structure whereby a third party developer or financier develops, purchases, owns, and operates a solar PV system for an end user who pays a set price per kilowatt hour (kwh) for the electricity produced by the PV system. The end user typically does not have to provide any upfront capital for the solar PV system. However, the third party developer or financier takes a portion of the available federal tax incentives because they require a higher return on investment. The remaining majority of incentives are then built into the PPA price. PPA terms typically last between 10 and 25 years. Many solar installers provide their customers with a PPA option.

Loans

Currently, the below two options are available for non-profits to purchase a PV system with a loan.