What is Solar Faithful?
Solar Faithful envisions a world where congregations and values/faith-based nonprofits are leaders in clean energy adoption. The organization aims to increase solar access among congregations and values/faith-based nonprofits by offering multiple clean energy adoption models to equitably and faithfully lead the clean energy revolution. Striving to build a more inclusive movement for climate justice, Solar Faithful offers green job training in the trades by creating economic opportunities in communities where solar arrays are installed.
What is the goal of the Solar Faithful Program?
This is a solarizing program for congregations and values/faith-based nonprofits. We offer two options:
A reduced-price solar installation purchase option with the option for up to 100% financing
A no-up-front cost on-site solar power purchase agreement.
The outcomes are reduced energy costs while improving environmental sustainability, demonstrating stewardship, and education by installing solar energy and to address environmental justice issues, where possible.
*Henceforth, congregations and values/faith-based nonprofits will be referred to as organizations.*
How do the congregations and values/faith-based nonprofits save money?
Solar panels produce 100% clean, renewable electric power that decreases the amount of electricity the congregations and nonprofits purchase from their utility. Power generated by solar installation provides at least a 10% decrease in cost, compared to the utility rate. If there is excess power generated (more power than currently used at any moment), the power company purchases the power and credits the next electricity bill.
What if the organization requires a new roof, where the expected life of the current roof is substantially less than the 25-year PPA / contract duration?
To qualify for the Solar Faithful Program the roof needs to have sufficient life and structural strength to support solar for the life of the PPA.
If the roof life is insufficient, Solar Faithful will work with the organization to determine replacement options.
What happens if my organization, whether to install a new roof, HVAC system, or otherwise, needs to move the solar panels?
We have included one removal and replacement of the panels in the 25-year PPA. This means if the organization needs the solar equipment moved for remodeling, HVAC, re-roofing or other reasons, this will be done at no cost to the organization.
Does Solar Faithful offer ownership options?
There are two options offered, Direct purchase and Power Purchase Agreement (PPA).
Direct purchase allows organizations to own the system right away and take all the benefits of owning the system but also the risks of ownership. [we are offering a financed direct Purchase option]
PPAs have no upfront cost, operation, maintenance or insurance during the 25 year contract and enable organizations to purchase 100% clean, renewable power starting at 10% discount.
Direct Purchase Option
Is there an opportunity for a congregation to invest in their solar array up front?
The Direct Purchase uses the new Inflation Reduction Act “Direct Pay option” allows the organization to convert the tax credit to a rebate, thus making the economics very similar to that of large residential projects. Direct purchase of the solar array will require donations and/or borrowing to cover the entire project cost and the rebate is refunded after the project is completed. If the organization does not have a bank lending relationship, we can offer Michigan Saves program financing to fully fund the project and repayment comes through the rebate and energy saving produced.
Power Purchase Agreement
The Power Purchase Agreement requires no fundraising, borrowing, operations, maintenance or insurance. Organizations simply pay less for the power produced and own the system free and clear after the 25-year PPA agreement period. If desired, the system can be purchased early (see below).
How does a Power Purchase Agreement work?
The organization agrees to purchase power from the rooftop, carport or ground-mounted solar array. Power generated is sold to the organization at a discounted price. That same energy reduces the amount of power required to be purchased from the utility. Note that there will be two power bills, the one associated with the PPA (at the 10% reduced kWh rate) and the utility bill (at the utility’s kWh rate but with reduced consumption due to onsite solar).
Can a congregation buy back the installation? When? At what cost?
Yes. The Congregation can terminate the contract anytime by paying the termination fee or can buy out the solar system at fair market value in year 10, 15 and 20. The termination fee is also prescribed in the PPA agreement for each year of the agreement. The fair market value is based on the value of the power production over time and starts close to the project cost (less incentives), and tapers down as the contract period runs out.
Financial Savings Questions
What savings should organizations expect?
The organization owns the system, thus all of the power savings are realized by the organization but also has a mortgage payment until the system is paid off or raises capital to pay for the system outright. This option often has better total savings. In short, the organization borrows money, the cost of paying back that loan is roughly 90% of their utility savings, and after the loan is paid off, all the savings are realized by the organization.
The finance company funds and owns the solar system installed on the organization. The power generated by the solar will offset the organization’s utility bill. The organization will pay the PPA rate for solar power produced and reduced electric bill from the utility. Resulting in net savings. Each organization’s savings will be calculated using actual electric cost (based on the current utility’s rates), system size and other factors. Our goal is to provide 10% initial savings.
The savings is guaranteed by Solar Faithful. The organization will never pay more than the utility bill without solar.
What is a payback period?
A payback period is the amount of time it takes to earn back your initial investment. Solar panels can help you save enough money on energy bills over time to offset the upfront costs. How much you save per month depends on the size of your solar system, your home’s energy consumption and other factors. Calculating the payback period will be unique to your circumstances due to the variability of the upfront costs, as well as the difference in energy costs based on your location.
Can the price of the PPA exceed the savings from the utility?
It is possible for the utility to change rules and reduce the savings produced by the solar system. To cover this possibility, Solar Faithful provides a “no loss” guarantee. If the price of the PPA exceeds saving, Solar Faithful will pay the difference to the participating organization.
Who carries insurance and what kind?
The organization carries insurance on the building. We recommend adding a rider in case the property damages the array, should, for example, a tree or limb on the property fall and damage any part of the solar installation. The finance group carries insurance on the solar equipment. This coverage protects the building against damage from the solar array.
Liability insurance is necessary if any person goes to the organization for installation or maintenance. The construction and maintenance companies provide liability, unemployment and workers compensation insurance. Thus coverage from damage caused by the installation of the solar array and for the workers installing solar panels.
The organization needs to include the rider to cover the additional equipment on their roof.
The PPA finance group carries insurance to cover the solar equipment.
What liabilities, if any, are the organization exposed to should there be any damage to the building from the solar array?
Before Solar Faithful creates the PPA, it will inspect the roof and roof structure to ensure that the roof is in good enough condition to support the solar array for the 25-year life of the agreement.
Normally, we ask the host facility to add the solar project to the building insurance and the additional expense is covered by the finance group. This both insures continuous coverage at the lowest cost as well as produces the best savings for the organization. If this is not possible, the finance company will add the project to their umbrella policy but this might reduce the savings for the congregation.
If there is any damage to the building or property during installation, who is financially responsible? An example of damage might be harm to paved areas caused by a heavy truck.
Solar Faithful contractors carry insurance to cover the employees, sub-contractors, and professional liability, including unemployment and workers compensation. Chart House Energy will provide roof and site inspection prior to construction and a roof and site inspection post-construction to ensure that no damage has occurred and that the site is cleaned up after construction.
What is required to operate the solar equipment?
Staff at the organization will be shown how to turn on and off the solar system. This is usually not required as the system will automatically shut down if there is insufficient sunlight or lack of power from the utility and automatically when there is enough light and power.
The solar installation is highly automated and includes a high level of built-in monitoring. The monitoring system is web-based and can be monitored remotely. Also alarms can be set up to email people assigned to monitor the system, if any of the equipment falls out of acceptable performance and persists. The person monitoring the system will arrange for a service call to address the underperforming or failed equipment.
For the direct purchase option, operations and maintenance contracts can be provided by the approved maintenance contractor (often the same as the installation contractor).
In the case of a PPA, operations and maintenance is the responsibility of the finance company. The warranties for all the equipment are assigned to the finance company until they are transferred to the congregation when the PPA ends, either through early purchase or the end of the agreement.
What is the warranty on the solar system?
Warranties provided for the organizations.
25 year Solar Panels
25 year Racking
12 year Inverters
5 year installation workmanship
O&M services can be contracted by the organizations, including from Solar Faithful contractors.
All product, mechanical and other warranties are included in the Operations and Maintenance (O&M) covered by Solar Faithful and its investors.
If a component of the solar array needs to be replaced, who pays for the labor and equipment?
Most equipment suppliers provide some service compensation that will cover most if not all of the removal and replacement cost.
Can a new roof be included in the solar project?
Some investors read the incentives to include the new roof as part of the solar projects and some do not.
Is there an opportunity to buy out the PPA contract before 25 years?
The PPA provides fair market value buyout options in years 10, 15 and 20 which may or may not be less than the termination fee stated in the PPA agreement allowing an annual option to purchase the system.
How is excess generated energy from the solar installation compensated?
It will show up as a credit on the next month’s bill from the electric utility.
Why does the organization need to provide financial information?
In the case of a PPA, the Equipment is actually owned by an impact investment group with whom Solar Faithful has partnered. The require evidence that the congregation or nonprofit show evidence of financial stability:
1. Organization has been in existence for at least 10 years.
2. Organization has stable financial status shown by 2 years of returns or P&L and balance sheet.
Our organization is considering solar, but we’re curious: should we first try to improve energy efficiency?
We believe both can be pursued, but, yes, energy efficiency upgrades are ‘low-hanging fruit’ that your organization can take advantage of to reduce your utility bills and energy usage. Check out the Department of Energy for more information about energy efficiency upgrades.
Can I contact other organizations who have committed to this investment about their decision? Do you have other references that have started this project that I could contact for further questions and referral information?
As more organizations participate in the Solar Faithful program, there are a growing number of references. Additionally, references can be provided for each installation contractor.
Will I be able to monitor the amount of solar electricity generated with an app?
Yes. The organization can access both the monitoring and operations to the solar system and also kiosk ready web pages thus allowing the organization to add the system performance to public displays or organization websites.
How much of my organization’s annual electricity needs will be covered by solar?
The best economics are realized when you use the solar power onsite. When you produce more energy than you use, excess energy is sold to the utility at a lower rate which reduces the total savings. [you can do 100%, but the congregation would need to do a lower savings level]
Typically, 70-80% of consumption is covered based on sizing of system, etc etc
Is a data connection required for the solar installation?
Ideally, yes, but it’s not required. It is preferred as most organizations have internet access and allows the system to be monitored without cell conductivity and related expenses.
Renewable Energy Credits (RECs) currently have no value in Michigan. However, if in the future they gain some value, who owns the RECs?
The congregation owns the RECs.