Churches are going solar and saving big thanks to the climate law

Linda Cleveland knew that getting solar panels on the roof of the Watts-Willowbrook Church of Christ was more than just a way for her congregation to save on electric bills. It would further its broader community mission too.

The 12-kilowatt solar array on the roof of ​“The Brook,” as her church is known to neighbors in the predominantly Black and Hispanic city of Compton in Los Angeles County, will help the congregation cut its bills roughly in half. Those savings will go toward buying and covering the energy costs of more refrigerators and electric stoves for its monthly ​“community food ministry” events that feed hundreds of people, Cleveland, secretary of the church, said.

The panels will also charge a backup battery system the church plans to install next year to keep refrigerators, air conditioners, and air purifiers running during power outages — an increasingly common threat in California — and during air-quality emergencies like those caused by the fires that have broken out at nearby industrial sites over the years.

The Brook’s shiny new solar panels were made possible in large part by the Inflation Reduction Act. The law contains clean energy grant and loan programs that churches can access and also allows houses of worship to access generous tax credits for solar installations even though they don’t pay taxes.

Cleveland, who is also a facilitator with community organization Watts Clean Air and Energy Committee, would like to see more churches tap into solar. ​“With Covid-19 coming in, there are a lot of community churches that are closing, because attendance is down. That means the funding for programs and ministries are also down,” she said. ​“Installing solar panels gives them an opportunity for funding to use in other areas of ministries.”

That’s why Cleveland is encouraging other congregations to also meet with RE-volv and California Interfaith Power & Light, the nonprofits that put together the tax credits and financing that made her church’s solar installation possible. Those groups are part of an initiative with the nonprofit Green the Church and the National Renewable Energy Laboratory’s Solar Energy Innovation Network aimed at bringing more solar to houses of worship in communities of color across the country.

By building relationships with local solar installers and job training organizations like Grid Alternatives and the Los Angeles Cleantech Incubator, Cleveland also hopes to help underserved communities get a head start on meeting California building electrification policies. ​“Everything is being electrified,” she said. ​“We need to make sure that we’re not left behind, which is a systemic occurrence in our community.”

How the Inflation Reduction Act put solar within reach of more houses of worship

More and more houses of worship are going solar, according to a 2023 report from the U.S. Department of Energy’s Lawrence Berkeley National Laboratory. But historically, those projects have been concentrated in ​“relatively wealthy, White, and educated census tracts,” the report noted, largely due to the significant up-front cost of solar installations.

So far, RE-volv has done 70 solar projects in 18 states. But ​“nonprofits have had a really hard time getting projects financed,” said Andreas Karelas, executive director of RE-volv, which specializes in financing solar and battery storage for nonprofit organizations.

Many churches have relatively tight budgets, with little capital available to purchase their own systems and without high credit ratings to secure loans. Others have older buildings that are harder to retrofit for solar. And much of their work relies on volunteers who are likely to have little expertise in energy.

Several key programs created by 2022’s Inflation Reduction Act are starting to make solar more broadly accessible, however, Karelas said.

The law has brought tens of billions of dollars in grant funding for community solar and lending authority for solar and energy retrofits that can now flow to underserved communities, including houses of worship, he said.

And vitally, the ​“direct pay” provisions of the law now allow nonprofit groups, religious institutions, and other entities that don’t pay taxes to receive the value of federal tax credits for solar, batteries, and electrification projects, he said.

Tax credits are the primary form of federal incentives for clean energy and can cover from 30 to 50 percent of the cost of a project. With direct pay in place, the nonprofits and houses of worship that have been considered poor targets for the solar industry should now be considered ​“a top segment of the market for every installer,” he said.

Direct pay was key to financing The Brook’s solar project, said Jacquelyn Badejo, chair of the Los Angeles Climate Emergency Mobilization Commission, a group formed in 2022 to advise the city on equitable climate policy.

“Five years ago, we actually tried to go solar, but it didn’t happen,” said Badejo, who is Cleveland’s daughter and grew up in The Brook congregation. ​“Now that we have RE-Volv, and things in the industry have evolved, and we have direct pay, we were open to the idea of it.”

Lee Barken, chief community officer at CollectiveSun, a solar financing company that’s done about 200 solar projects for nonprofits in 25 states, agreed that direct pay is opening new opportunities. ​“We’re seeing parts of the country that previously were not cash-flow positive before that are now lighting up,” he said.

Using direct-pay tax credits isn’t necessarily simple, Barken cautioned. The payments from the IRS come up to a year after the projects are completed and the funds are applied for, which means that financing must be structured to cover that gap. And charitable donations raised for solar projects, which have already earned tax deductions for their donors, must be subtracted from the total cost of the solar project for the purposes of claiming direct-pay credits, he noted.

But if structured properly into solar project financing, direct-pay benefits can help bridge the gaps that many houses of worship face, he said. CollectiveSun raised a $4 million credit facility for houses of worship last year, backed by capital and loan guarantees from nonprofit foundations, to solve ​“specific needs we were hearing from communities of faith, which have some unique challenges getting things financed,” he said.

Even wealthier congregations may have trouble getting loans because ​“traditional lenders don’t want to accept churches or synagogues or mosques as collateral,” he said. ​“If they default on a payment, nobody wants to foreclose on a house of worship.”

On the other hand, ​“when times get tough … people step up to make sure their church or synagogue or mosque doesn’t go under,” he said. 

Churches also often provide refuge to members of their community outside their congregation.

CollectiveSun’s San Diego offices are in the basement of the solar-equipped Christ United Methodist Ministry Center, an interdenominational institution that provides food, clothing, and shelter to more than 100 unhoused people. Together New Orleans, a coalition of faith and community groups, has collected nearly $14 million in public and private-sector funding to build solar and battery microgrids at churches, clinics, and community centers to provide power during hurricanes and floods.

These features make solar and battery investments worth more to their broader communities, Barken proposed. ​“We view these as community assets rather than as liabilities.”

The community ​“solar seeding” effect 

The proliferation of solar panels on churches, schools, and other community landmarks can also create what’s known as a ​“seeding effect” for increasing solar installations in the community at large.

A paper published last year analyzed this effect, and the results are ​“very consistent,” said Eric O’Shaughnessy, a renewable energy research analyst at Clean Kilowatts and an affiliate at Lawrence Berkeley National Laboratory who coauthored the report.

“There’s this whole body of literature that shows that houses of worship have huge influence on their surrounding communities,” he said. If they install solar, ​“would that not influence the members of those houses of worship to install solar” at their own homes?

This intuition is borne out by data collected from across the country, per O’Shaughnessy’s report. Every nonresidential solar installation in a zip code ​“will accelerate adoption rates by something like 0.4 adoptions per quarter,” he said, or about 1.2 additional solar systems per year.

That data doesn’t show why the effect happens, he cautioned. ​“There are all sorts of ways that solar contagion can work. We don’t know how it happens — we just know that it does happen.”

But experiences from the field can fill in some of those gaps, said Tierney Sheehan, RE-volv’s communications manager. In Dayton, Ohio, the solar system installed by Mission of Mary Cooperative, a faith-based urban farm, inspired East End Community Services, a family and youth services center down the street, to go solar, she said.

Cleveland offered her take: ​“My hunch is that once people are educated on the benefits, then they are more willing to participate in something like this. Until they can actually see the results, they’re skeptical. So many times the community is given information, and it doesn’t follow through and pan out to what was initially given.”

That’s particularly true in disadvantaged communities that have been disproportionately targeted by door-to-door salespeople offering deceptive or outright fraudulent solar deals. ​“People tend to listen to information that’s given to them by pastors or ministers, because they assume they won’t steer them to someone who will take advantage of them.”

The Brook, for its part, has already seeded at least one other Compton church’s solar plans.

“After witnessing The Brook go solar, reduce electricity costs, and champion sustainability, our congregation was inspired to consider this option for our own building,” Jonathan Seals, associate pastor of Calvary Resurrectional Baptist Church in Compton, said in an email. The 7-kilowatt solar array and 12.5-kilowatt-hour battery system now in the final stages of financing with RE-volv ​“will allow us to increase ministry and further serve the Compton community.”