How Churches Are Saving 30% on Their Electricity Bills

In today’s world, where energy costs are on the rise, churches and other nonprofits are finding new ways to stretch their budgets to continue serving their communities. One powerful, yet often overlooked, strategy is going solar. Thanks to recent federal programs, like the Inflation Reduction Act (IRA) and the Modified Accelerated Cost Recovery System (MACRS), the financial benefits of solar have become more accessible for churches and religious organizations. Here’s how these programs can help your church cut costs and make a positive impact on the environment.

1. Inflation Reduction Act (IRA) Incentives for Nonprofits

The IRA, signed into law in 2022, has opened up new opportunities for nonprofits, including churches, to adopt solar energy through tax incentives. Here’s how it works:

• Direct Pay Option: Traditionally, tax-exempt organizations couldn’t benefit from tax credits. However, under the IRA, churches can now receive a direct payment from the government in place of a tax credit. This effectively means that churches can benefit from up to 30% of their solar installation costs being reimbursed.
• Additional Bonuses: Churches that install solar in underserved or low-income communities may qualify for extra bonuses on top of the 30%, making it even more affordable. For organizations dedicated to serving low-income communities, this can be a game-changer.

2. The Power of MACRS for Churches with Supporting Foundations

The Modified Accelerated Cost Recovery System (MACRS) is another tax incentive that allows businesses to recover solar installation costs through depreciation deductions. While churches don’t typically qualify as tax-paying entities, churches with a supporting organization or foundation that does pay taxes may be able to take advantage of MACRS.

• Bonus Depreciation: Under the current tax law, organizations eligible for MACRS can take advantage of “bonus depreciation,” allowing them to deduct up to 80% of the cost of the system in the first year. This helps offset the upfront investment and makes solar even more financially appealing.
• Combining with IRA Credits: If your church’s supporting foundation is eligible, it could use both the IRA tax credits and MACRS depreciation deductions, dramatically reducing the net cost of solar installation.

3. Immediate and Long-Term Savings

Switching to solar doesn’t just cut costs during installation—it offers long-term savings on energy bills, which can be reinvested into programs, facilities, and services that support your congregation. Here are some ways solar saves money over time:

• Reduced Utility Bills: Solar energy provides a steady, predictable source of power. By generating your own electricity, you reduce dependency on increasingly costly utility-provided power, leading to substantial savings.
• Energy Independence: Solar panels can protect your church from fluctuating energy prices. With inflation on the rise, this stability in energy costs can be a significant advantage for long-term planning.

4. Environmental Impact and Community Support

Embracing solar also demonstrates a commitment to environmental stewardship. Many congregations are deeply motivated by the desire to care for God’s creation, and going solar is one of the most impactful ways to do so. By cutting down on greenhouse gas emissions, churches contribute to a healthier, cleaner environment—a powerful statement that aligns with the mission of many religious communities.

Additionally, your church can serve as a role model, inspiring members and neighboring organizations to consider solar energy. This not only amplifies the positive environmental impact but also strengthens your church’s bond with the community.

5. Next Steps: How to Get Started with Solar for Your Church

If you’re interested in exploring solar energy for your church, here are some simple steps to take:

1. Assess Your Church’s Energy Needs: Look at your current energy usage to determine the size of the system you’ll need.
2. Research Solar Installers: Seek out local installers who have experience with nonprofit organizations or churches. Many companies offer free consultations to help you assess costs, savings, and incentives.
3. Explore Financing Options: Some churches can pay for solar installations outright, but many nonprofits also explore financing options like power purchase agreements (PPAs), which allow you to pay for solar over time with little to no upfront cost.
4. Take Advantage of Available Incentives: Make sure to work with your installer to take full advantage of the IRA, MACRS, and any local incentives available to reduce costs as much as possible.

With new incentives under the Inflation Reduction Act and MACRS, going solar is now more accessible and beneficial than ever for churches. By cutting energy costs and committing to sustainability, your church can free up resources for vital programs and services, all while setting an example of stewardship for the congregation and community. Ready to take the next step? Connect with a trusted solar provider to learn more about how your church can make the transition to clean energy.