Solar for Nonprofits: The Untapped Market
by Tracy Fosterling on Jun 22, 2018
The U.S. solar market has grown spectacularly over the last decade. In 2017 the U.S. installed 10.6 gigawatts (GW) of solar PV capacity, to reach 53.3 GW overall, enough to power 10.1 million American homes, according to the U.S. Solar Market Insight Report 2017 Year-in-Review from GTM Research and the Solar Energy Industries Association (SEIA). The solar industry has seen strong growth across all major market segments, including residential, commercial & industrial (C&I), and utility-scale, as a result of rapidly declining equipment and installation prices, increasing electric rates, and strong policy support in the form of tax incentives and net energy metering programs. But one downstream customer segment that has lagged behind during this period of strong growth is been the nonprofit sector, which is made up of over 1.5 million organizations across America.
CollectiveSun is a solar financing company that was created to exclusively help nonprofits and tax-exempt organization fund solar projects nationwide. In this Q&A style interview, I talked with Todd Bluechel, Vice President of Marketing, Sales & Business Development at CollectiveSun. We talked about the opportunities and challenges of solar for nonprofits: the untapped market.
Tell us about CollectiveSun?
CollectiveSun was founded in 2011 on the principle that all nonprofits and tax-exempt organizations should have access to clean, renewable energy. We’re proud to be the only company in America that exclusively helps nonprofits (tax-exempt organizations) fund solar projects nationwide. We believe that our team of experts understands the financing challenges nonprofits and tax-exempt organizations face better than anyone else. Our proprietary funding model applies tax credits that reduce the cost of a nonprofits solar project by 15%.
What are the big reason(s) that solar installers have shied away from nonprofit solar projects?
That’s easy… nonprofits can’t use tax credits, because they are tax-exempt organizations. This is a huge missed opportunity, it’s literally like leaving money on the table. In both the commercial and residential sectors, the 30% Federal Investment Tax Credit (ITC) is an incredibility important part of the project. The ITC is what enables a project to make financial sense.
Talk about the benefits for solar installers who want to get involved in nonprofit solar projects (financial, social, economic etc.)
The nonprofit market is a huge, relatively untapped market. There are over 1.5 million nonprofit organizations in America. This represents a new market segment opportunity for many installers, in addition to the commercial and residential market. Furthermore, there’s obviously a lot of goodwill associated with non-profits, like local churches, social and recreation clubs, etc. Not many solar companies are focusing on marketing resources on this segment today, which is a missed opportunity.
What would be your advice for solar installers/developers looking to branch into the nonprofit solar market?
Let me answer this question with a question. Who do you think the residential homeowners are going to call when they want solar? Answer: the same company that put solar on their church, the school their children go to, the animal shelter they support, etc. Also, think of all the positive PR installers can create and generate by helping nonprofits get solar. It’s a huge marketing opportunity that many solar installers haven’t yet tapped.
Talk about the financing opportunities that CollectiveSun provides to installers for nonprofit solar projects?
CollectiveSun can reduce any solar installers bid by 15%. When nonprofits get the 3 bids needed to satisfy their board’s completive bidding process, any installer working with CollectiveSun will have a bid 15% less expensive than any competing bids, not working with CollectiveSun. CollectiveSun’s 15% reduction significantly improves a nonprofit’s solar projects' ability to pencil.
What was your motive behind getting involved in CollectiveSun?
LOVE…. I wanted to do something I loved. I care about the environment, I care about nonprofits. I’ve been in the renewable sector for over 16 years trying to repair the damage we’ve done and continue to do to our planet. Energy is one of the major contributors to pollution. I want to be part of the solution. Solar can reduce any nonprofit’s operating expenses allowing them to do more “good” with all the money saved. Also, I wanted my job, my lifestyle and my philanthropic activities to align with my desire to do “something” for the greater good.
Energy Toolbase and Collective Sun co-hosted a webinar on May 1, 2018 entitled “Solar for Nonprofits: The Untapped Market”. You can view the recording here:
Modeling Opportunities for Nonprofits within Energy Toolbase
Energy Toolbase gives users the ability to model and analyze any type of financing transaction. That could be a cash purchase, loan, lease, Power Purchase Agreement (PPA) or any type of hybrid transaction. This enables users to run an apples-to-apples comparison of different financing transactions for the same project. Many end customers, whether they’re a non-profit or for-profit, want to see the different options available to them. What’s going to give them the best ROI? What enables them to most fully utilize all the rebates and tax incentives, based on their specific situation?
If you’re an Energy Toolbase user and want to model non-profit projects using the CollectiveSun SPA or Loan, simply contact your account manager and they will copy those financing transaction templates into your account.