Prepaid Solar Project: 5-Year Path to Ownership

Solar Faithful finances and applies for the federal incentives (Elective Pay rebate). Solar Faithful retains 15% of the project cost, which covers our bridge financing costs for the incentives and allows us to continue to run our organization. Once the incentives are received, the bridge loan for the incentives is repaid and Solar Faithful continues ownership until the 5-year incentive recapture period is over.

This financing option falls somewhere between a Direct Purchase and an ESSA in terms of the path to ownership. This financing option works for organizations who have the upfront capital but who do not want to file for the federal incentives.

Example project:

1. Your organization has a proposed $100,000 project cost.
2. You pay either 85% ($85,000) up-front, or 75% ($75,000) up-front if the project qualifies for the additional Domestic Content incentive.
3. Solar Faithful finances a bridge loan to cover the remaining project cost before the Elective pay rebate is received.
4. Solar Faithful applies for and receives the federal incentives/rebate (30-40%).
5. Solar Faithful owns the solar array for 5 years.
6. After the 5-year period, your organization has full ownership of the array.

Frequently Asked Questions:

Q. Would my organization be responsible for raising 100% of the project costs, or only the portion not covered by the tax credits?

A. You would only be responsible for paying the project cost minus the tax credit (75–85% of the project cost). It is important to note that any funds raised for the project must be raised as general donations for your organization, not as solar project-specific donations. This is required because of specific IRS guidance.

Q. I already have a proposal from a solar installer and would like to use them as the installer. Does this work?

A. Yes. As long as we can review the proposal and ensure the pricing and proposed system design meet our requirements, that is perfectly acceptable.

Q. Why did Solar Faithful suggest that we pay 100% of the project cost up front?

A. Solar Faithful recommends that, if you are a Jewish organization, you apply for a 0% interest loan from Adamah to cover the entire project cost. This eliminates financing costs associated with the bridge loan that is typically needed until the federal incentives are received.

Q. Will Operations and Maintenance be covered during the 5 years that Solar Faithful owns the array?

A. O&M services will follow the installing contractor’s terms.