Solar panels at Pearlstone Center, Reisterstown Maryland
Going Solar in Your Congregation
We are committed to serving as a meeting point for the good folks in our area who are undertaking congregational solar projects, and to ensuring that each project benefits from the experience of and lessons learned by all of those that came before.
We’re learning everything we can about our region’s successful congregational solar projects and are tracking them on our map. Click each pin on the map to learn about each congregation’s solar project, along with news coverage, photo and video, and contact information.
Know of any solar congregations that aren’t on our map or have corrections? Email solar @ ipldmv.org.
Curious about going solar at home? Learn more.
Could my congregation go solar?
Maybe! Let’s talk …
We’re learning everything we can about our region’s successful congregational solar projects.
Interested in going solar at your congregation? The most important thing to understand is that most congregations in our region with solar panels on their roofs:
- Do not own the panels
- Did not pay the cost of having the panels purchased or installed
Rev. Dr. Earl Trent, Jr., Florida Ave Baptist Church, credit: Jocelyn Augustino/Urban News Service
- These congregations found a private company to put up solar panels on their property at the company’s expense.
- The company owns the solar panels and the electricity they produce.
- The company then sells the congregation the power produced by the solar panels at a price lower than the congregation was paying for that power from the grid before.
Many congregations go solar through Power Purchase Agreements.
A Power Purchase Agreement, or PPA, governs the terms under which the congregation purchases solar energy from the private company that placed solar panels on their facility or grounds.
These financing arrangements emerged at a time when the federal tax credit for solar panels was completely unavailable to nonprofits. Though the Inflation Reduction Act promises to make the federal credit somehow “monetizable” by organizations that don’t pay taxes starting in 2023, PPA financing arrangements continue to be compelling for many congregations anyway:
- Solar arrays are still more profitable for a private company than for a congregation, due to tax-based benefits like depreciation.
- PPA financing allows congregations to go solar at no out-of-pocket cost, even at a slight savings.
- PPAs shift many of the risks, responsibilities, and hassles of putting up solar away from the congregation and onto the owner of the panels.
Who does what in a PPA solar project?
- Pays nothing for the solar panels and installation
- Receives a “turn-key” solar project
- Uses solar energy generated by the panels at a discounted rate.
- Pays for solar panels and installation
- Hires an installer
- Arranges for permitting
- Insures their asset
- Takes responsibility for most maintenance and repairs
- Owns the solar panels for the term of the agreement
Wait, companies are putting up solar projects on congregations for free? How is that possible?!
Over a hundred local congregations getting their energy from the sun are here to tell you: PPA financing is real, it’s kosher, and it’s not too good to be true!
It’s important to understand why companies are willing to provide congregations with no-money-down solar financing, so you can evaluate proposals confidently, with real understanding of what makes these projects profitable for the other party.
Companies can make good money on some congregational solar projects.
On the back end, companies that offer PPAs to congregations make their money back several ways, most of them having nothing to do with your congregation at all, including:
Federal Tax Credit
30% of the cost and labor of the entire project
In the past, PPA financing became popular when congregations had absolutely no access to the federal solar tax credit.
Now, the Inflation Reduction Act (IRA) has promised to make the 30% federal solar tax credit available — “monetizable” — by nonprofits starting in 2023. That said, we expect many congregations will still choose to go solar through PPA financing.
- Companies can still make money on depreciation that congregations that don’t pay taxes cannot. Some of the state incentives may be tax-based, too.
- Even if the federal tax credit provides a 30% rebate in a form nonprofits can use, that still leaves 70% of expensive solar panels to be paid for upfront.
- And PPA providers take care of everything (serving up”turn-key” projects). They hire an installer, arrange for permits, take responsibility for most maintenance and repairs, sell SRECs generated by the system, etc. For volunteer-run nonprofits, especially those without a building manager, the efficiencies of someone else being responsible for and owning your solar panels can be worth a lot.
When property — like a solar array — loses value, one can deduct the loss from one’s taxable income. Solar panels lose their real value very slowly, generating energy even after two or three decades.
But, for tax purposes, these companies can act as if — on paper — solar panels lose all their value in the first five years.
(By contrast, for the congregation itself, which owes no taxes, depreciation is of no value at all.)
Solar Renewable Energy Credit (SREC) sales
Clean energy advocates have fought for and won state clean energy laws (Renewable Portfolio Standards) that require utilities to purchase credits from local solar projects.
For every 1,000 kilowatt hours generated by panels, companies can sell one SREC to the utility at a price set by laws in DC, Maryland, and Virginia. SRECs are only a sure bet in the short term, since their value is dependent on state laws that could change.
Some company that own solar panels will sell all of the SRECs the project will ever generate to an SREC aggregator who buys them up front at a discount, absorbing the risk and delay.
SREC prices, which are determined by the strength of state solar laws, are the major reason that the solar markets in DC, Maryland, and Northern Virginia are so different.
DC has the strongest SREC market, followed by Maryland, with Virginia third.
For example, compare SREC prices in Spring 2023:
- DC – $420
- MD – $58
- VA – $50
Look up the current SREC market for each state here.
PPA payments from the congregation
PPA’s set the terms on which congregations will pay the company that owns their solar panels for the power generated by those panels, and the percentage by which this rate will escalate each year. PPA providers will aim to set their per-kWh energy costs just at or slightly below the congregation’s current grid energy prices – which is why providing 12 months of energy bills is often the first step of seeking a PPA proposal.
Remember, though: these companies are making money on the solar project through tax credits, depreciation, and SREC sales, so the payments made by the congregation itself represent only a sliver of the money they’re making on the project.
Particularly in DC, some developers are making so much selling SRECS in DC’s market that they are even offering “zero PPAs” giving the solar energy to the congregations for free, because they don’t need any payments from the congregation at all to turn a profit from the panels they put up on the congregation.
- The reason these companies are prepared to offer congregations such favorable terms – solar panels at no upfront cost – is because the most significant ways companies make money on these deals don’t involve the congregations at all (federal and state incentives, depreciation, and SREC sales).
- The terms of the PPA may be 20 years, but the companies are making most of their money in the first few years:
- Federal and state incentives accrue in the first year.
- If they aggregate SRECs for sale, all of that money comes in the first year.
- Depreciation can be taken in the first 5 years.
So, even if you sign a PPA that specifies energy payments annually for 20 years, understand that the company has made most of their money on your solar project after the first 5-7 years, and may be willing to talk about shifting ownership of the panels back to the congregation after that time.
The hardest part of going solar at a congregation?
It’s the people, not the panels.
The rector who oversaw one of the first congregational solar projects in our region recalled that everyone in the church who had input on the solar project needed to be told how PPA financing worked fourteen or fifteen times … each.
This is slow, patient community-organizing work.
Take it from those who’ve learned the hard way: if you rush to get solar proposals without doing the people work first, decision-makers may raise unexpected objections that derail even very favorable solar proposals.
Once a developer has spent time preparing a proposal for your property, it may be too late to go back and start helping your congregation’s decision-makers to understand PPA financing for the first time if they’ve never gotten their minds around it before.
If you want to go solar at your congregation:
1. Make sure you understand the basics of PPA financing (start from the top and read this page again!)
2. Then make sure every decision-maker in your congregation who will need to bless this project understands PPA financing too.
A note: Run towards the skeptics and curmudgeons – talk to them first! Hear them out. Learn from their questions and spend time addressing their concerns (such as, “Can our congregation’s roof even handle solar panels?“). Doing this organizing work in advance will make all the difference.
When your congregation is ready to explore going solar, get in touch: email@example.com. You can expect to be asked for 12 months of energy bills, and for what material the roof is made of and how many years it has left.
Frequently Asked Questions
In faith communities, we feel tremendously protective of our often-historic and always beloved sanctuaries. In congregational conversations about solar projects, we’ve seen this protectiveness express itself in lots of “roof anxiety.” If folks in your congregation raise concerns about the suitability or weight capacity of your roof, you can empathize with their feelings, while also reassuring them that there are many safeguards to prevent a solar project from going up on an inappropriate roof:
- If your roof needs replacement soon, developers will encourage you to replace the roof before going solar.
- Developers can usually arrange for their solar projects not to void your roof warranty; and insure their labor against damage to your facility like any other contractor.
- No solar developer will want to or be willing to put panels on a roof that can’t handle it or will need to be replaced soon. Incentives are aligned.
- Our municipalities will not issue permits for panels on roofs that an engineer hasn’t personally signed off on for the proposed project.
In short: take heart! No harm will come to your building from looking into a solar project. There will be many opportunities to confirm if your congregation’s roof is suitable for solar panels throughout the process, long before any work is being done on your building.
In some cases, solar panels on your congregation’s roof or grounds would be visible to passers by — raising questions and feelings about making changes to the appearance of a beloved prayer facility. Solar panels are a more and more familiar sight, and you can help your community envision what a proposed solar project on your building or property might look like by visiting some solar congregations nearby, or by clicking through the photos on our solar map.
While what looks “nice” to each of us is ultimately in the eye of the beholder, more than one faith community has come to see their solar panels being publicly visible as a perk, not a bug. Our congregations strive to show moral leadership, and solar panels proclaim a community’s commitment to climate protection publicly.
The Rt. Rev Scott Benhase, who was at St. Alban’s Parish in DC when the church’s parsonage went solar in 2009, described their solar panels as “our newest stained-glass windows,” which like their traditional stained glass helped tell their story to all.
“Visitors to Ocean City who come worship at St. Peter’s often inquire how they might replicate our efforts in their home congregation,” wrote Rev. Greg Knepp in Delmarva Now. The Lutheran church he led embraced their new identity as “the church on Coastal Highway with the solar panels.” “We’re only one of hundreds of congregations across Maryland who are proud of our commitment to creation care, and are striving to serve as beacons to the larger community,” he wrote in 2017. “The Gospel of Matthew teaches this: ‘Neither do people light a candle and hide it under a bushel, but rather raise it on a candlestick, so it gives light to all.’”
In this video, our Director Joelle presents the same information above, but please note that, since recording, the Inflation Reduction Act has raised the federal tax credit to 30%, and made that credit “monetizable” by tax-exempt organizations.