The main benefit CollectiveSun offers nonprofits and tax-exempt organizations is our ability to reduce any solar installers bid by 12% nationwide for all projects over 50kW. Another benefit we offer is our ability to help nonprofits fund the remaining 88% using one or a combination of the following 5 options:
- PACE solar loan
- Traditional bank loans, Wall Street investors, Program Related Investments (PRIs), Nonprofit Specialty Lenders.
- CollectiveSun’s Proprietary CrowdLending Campaign – a direct loan from supporters of the nonprofit or tax-exempt organization with principal and interest repaid annually using the savings from the solar project. Because it’s a direct loan between the nonprofit or the tax-exempt organization and its supporters (investors), the interest rate can be set at the discretion of the nonprofit or tax-exempt organization (0% – 8%).
Yes, we are unique in what we do.
We believe in nonprofits and we believe in community service. We serve on nonprofit boards, we’ve founded nonprofits ourselves, and our parents have founded nonprofits. We also believe that “nonprofit” is a tax designation, not a business plan. Nonprofits can make a profit, they simply are exempt from paying taxes on that profit because of their charitable mission. Robust and effective organizations that can lock in a low cost of energy for 20 years are more fiscally responsible and less likely to become insolvent. We believe nonprofits are the backbone of any community and strong nonprofits create strong, vibrant and resilient communities.
We can serve nonprofits and tax-exempt organizations in all states and utility service territories where 3rd party ownership is permitted.
CollectiveSun works with all faith-based organizations and communities of faith, such as churches, synagogues and mosques, as well as other tax-exempt organizations such as private/charter schools, transitional/supportive housing, HOAs, hospitals, arts & culture organizations, library’s, youth organizations, veterans organizations, animal shelters, food banks, municipalities, and other community service organizations. We can also help golf clubs, public pools, marinas, and other tax-exempt associations.
A Solar Power Agreement is a prepaid service agreement. This means that the nonprofit is prepaying a 20-year service agreement with CollectiveSun, but instead of making a fixed annual service payment the amount of the service is deducted from the deposit. The nonprofit makes a prepayment, referred to as a deposit in the SPA, which is equal to 88% of the EPC cost. CollectiveSun records the 88% deposit as a loan from the nonprofit.
Each year, instead of receiving a separate service agreement payment from the nonprofit, CollectiveSun reduces the loan balance by the amount of that year’s service agreement payment.
Over time, the balance of the loan is slowly diminished by the corresponding service agreement payments.
A PPA is an agreement to purchase power as a service. A SPA is a prepaid services agreement that does not result in the sale of energy.
No. An escalator is an increase in the annual PPA rate. Escalators can often be found in installer bids as a way to make their project costs look less expensive in the short term but in the long term, bids with escalators are much more expensive to the nonprofit. CollectiveSun does not use escalators.
No. We work with leading industry installers. These installers are closely scrutinized and vetted to ensure quality workmanship and corporate longevity.
Yes! CollectiveSun was honored by a “Cool Congregations” award from Interfaith Power and Light. In addition, we were honored by the Rocky Mountain Institute for our work to build the solar array at their RMI Innovation Center. We are particularly proud of the RMI project because the RMI is a world leader with regards to sustainability. Eyes from all around the world watched to see what they did with their new building and they chose CollectiveSun to help fund their solar project.
This is a great question that can only be answered after reviewing the energy consumption patterns and solar conditions for a specific project. Please contact us so we can learn more about your nonprofit’s solar objectives.
No. If the nonprofit is in a longer-term lease, it is often possible to go solar under a Solar Power Agreement (SPA).
Yes. Solar Support Structures (often referred to as “carports”) can generally be included in tax basis and eligible for the 12% discount but will be reviewed on a case by case basis. Solar canopy structures add incremental cost to a solar project but may be cost justified in some scenarios. Please contact us for more details as each project is unique.
We invite you to visit our partner EnergySage and fill out all questions. They will let you know if your building is a good candidate for solar or not.
Yes, projects can be “bundled” together if they are on the on the same or adjacent parcels.
Yes, as long as each individual project is over 50kW.
Yes. All tax-exempt entities are eligible.
Contact us and share your story. We’d like to learn about your nonprofit and its renewable energy goals so we can share with you the ways CollectiveSun can apply tax credits to reduce the cost of your solar project by 12%.
The way things typically happen is the nonprofit will contact CollectiveSun and discuss their needs.
If the nonprofit already has an installer they want to work with the nonprofit will ask that installer to contact CollectiveSun and answer some basic questions which will be used to create a Solar Power Agreement.
If the nonprofit does not have an installer, and would like help finding an installer, CollectiveSun has partnered with EnergySage who has a nationwide database of quality installers. If you’d like EnergySage to offer you free installer bids, go to this link and answer all questions: https://www.energysage.com/p/collectivesun-llc/
Likewise, once the nonprofit selects what installer they want to use, that installer will contact CollectiveSun and answer questions which will be used to create the Solar Power Agreement.
Funding the Solar Power Agreement (SPA) is very flexible. CollectiveSun can facilitate any one or a combination of these options: Donations, Reserves, PACE solar loan, Traditional bank loans, Wall Street investors, Program Related Investments (PRIs), Nonprofit Specialty Lenders. CollectiveSun’s Proprietary CrowdLending Campaign – a direct loan from supporters of the nonprofit or tax-exempt organization with principal and interest repaid annually using the savings from the solar project. Because it’s a direct loan between the nonprofit or the tax-exempt organization and its supporters (investors), the interest rate can be set at the discretion of the nonprofit or tax-exempt organization (0% – 8%).
The cost of a solar system is based on many factors including system size and onsite energy needs. Since CollectiveSun utilizes a Solar Power Agreement (SPA), our cost will always be a 12% discount to the cost charged by the solar installer. Please contact us to learn more!
In general, these two terms and their subsequent efforts require an ask from the supporters of the nonprofit, but the main difference is that a crowdfunding campaign asks for donations while CollectiveSun’s CrowdLending campaigns ask for a loan. This loan is an investment that is paid back with interest.
A solar fund dedicated to CollectiveSun projects will be the initial owner of the solar system. At the end of year 6 when all the tax benefits are fully consumed, the system is transferred to the nonprofit. There is no additional cost to the nonprofit to take ownership. All warranties are transferred to the nonprofit including the 10-year installer warranty, the 20-year inverter warranty and 25-year solar panel warranty.
Absolutely not. If a nonprofit is the original purchaser, (i.e. if it buys a solar system directly from the installer), it loses all of the tax benefits. If the nonprofit works with CollectiveSun and becomes the second owner, it can access these benefits and save a lot of money.
Yes. During the period that it owns the system, the solar fund has a reserve in place and is responsible for all services. This reserve covers the cost of operations and maintenance.
During the period that it owns the system, our solar fund is responsible for everything including all operations, monitoring and maintenance. Once the nonprofit becomes the owner, all warranties are transferred to the nonprofit as well as the responsibilities of ownership.
CollectiveSun can work as fast as your nonprofit will let us work. We typically can provide you with a free and detailed proposal within 24-48 hours after reviewing your installer’s bid.
The Nonprofit or tax-exempt organization retains the right to make the final decision on which solar installer is selected.
CollectiveSun has partnered with EnergySage the leading online comparison-shopping marketplace for rooftop solar, community solar, and financing. If your nonprofit needs help finding reputable installers in your area, go to this link and fill out all the information: https://www.energysage.com/p/collectivesun-llc/
Great – Please choose which installer you want to work with and then contact us to learn how we can reduce that installers bid by at least 12%.
Nothing. The Solar Power Agreement (SPA) is with a dedicated and isolated solar fund. If a nonprofit engaged CollectiveSun to perform a CrowdLending campaign, we would be responsible for loan accounting and payment processing functions. Since the loan is between the nonprofit and the community investors, an insolvency of CollectiveSun does not affect the status of the loans. CollectiveSun does have a backup loan servicing provider in place in the unlikely event that CollectiveSun was unable to provide this service.
The roofing cost (or a portion thereof) can be included in tax basis and eligible for the 12% discount as long as:
- The roof work being performed is under or in close proximity to the energy equipment.
- The included cost does not exceed 10% of the overall project cost.
A Storage system (when combined with solar) will be eligible for a 12% discount to the extent that it is ITC eligible. To be considered ITC eligible, the storage system must be charged by renewable sources a minimum of 75% of the time.
If the storage system is charged 75% of the time by renewable energy, it will qualify for 75% of the 12% discount (9% discount).
If the storage system is charged 100% of the time by renewable sources, it will qualify for the full 12% discount. Any amount between 75%-100% will qualify for the appropriate pro-rata percentage of the 12% discount.
CollectiveSun has a team of experts that take all the worry out of a project by working with the installer to help identify the best equipment for the nonprofit. However, the nonprofit retains the right to make the final decision on which equipment is selected.
CollectiveSun has worked with several panel manufacturers. Each project is unique and will be evaluated on a case by case basis, however, we require “Tier 1” panels with “bankable” panel manufacturers.
CollectiveSun has worked with several inverter manufacturers. Each project is unique and will be evaluated on a case by case basis, however, we require “Tier 1” inverters with “bankable” inverter manufacturers.
By reading this FAQ, we can tell that you are already a solar champion. Please contact us to learn more about how we can work together!
Investing & Taxes
Most commercial and residential renewable energy projects enjoy significant tax benefits. Tax credits are similar to “gift cards” with the IRS. If a for-profit company has a $100 tax obligation and it possesses a $100 “gift card”, it can use that tax credit to meet its tax obligation and owe nothing. Nonprofits, by definition, are tax-exempt entities which never have an obligation to the IRS. Hence, these “gift cards” are useless to nonprofits.
Yes. CollectiveSun is able to utilize tax credits and benefits that are otherwise unavailable to nonprofit organizations if they were to try to fund the project themselves. Nonprofits, by definition, have no tax appetite so it is not possible for them to utilize tax credits. However, CollectiveSun’s proprietary funding model allows us to utilize tax credits and pass the savings through to the nonprofit in the form of a 12% reduction off the cost of the entire solar system.
The minimum investment amount is $250. There is no maximum amount. Due to the risks involved with this type of investing, you are limited in how much you can invest during any 12-month period in these transactions. The limitation on how much you can invest depends on your net worth and annual income.
If either your annual income or your net worth is less than $100,000, then during any 12-month period, you can invest up to the greater of either $2,000 or 5% of the lesser of your annual income or net worth. If both your annual income and your net worth are equal to or more than $100,000, then during any 12-month period, you can invest up to 10% of annual income or net worth, whichever is less, but not to exceed $100,000 for all crowdfunding offerings in any 12-month period.
No. Investments are not tax deductible. However, if you choose to donate proceeds from your investment, you may be able claim tax deductions. Please contact your tax adviser for details on your personal tax situation.
No. The investments are not FDIC insured and may lose their value.
Yes. The IRS requires the reporting of interest income. In order to receive interest payments, an annual 1099 filing is provided to the IRS including your social security number. You will receive a copy of this form. For security purposes, your social security number is not included in the copy you receive.
If the funding goal is not reached, the funds will be returned. During the campaign, the funds are kept in escrow for this purpose.
The loans are made directly to the nonprofit (but held in a 3rd party escrow) and are paid back to the investors utilizing the CollectiveSun platform which provides all the loan accounting and payment processing services.
Payments will be made via ACH and deposited into the account that originated the investment. Investors have the opportunity to change their ACH details if they’d like the payment made to a different account at some future date.
Yes. Once the project is fully funded, the campaign is over. This means the project could be funded by one person or a large number of people.
No. However, if a portion of the investment repayment is donated back to the nonprofit, it can be considered tax deductible. Please check with your tax advisor for additional details.
Yes, including escrow and ACH Payment processing / Investor management / Background checks for anti-money laundering and PATRIOT act compliance.
Interest rates vary per project in a range from 0% – 8%, but are typically in the 4% – 5% range. The lower the interest rate, the more savings are achieved by the nonprofit, but the more difficult it is to attract community participation.
The Nonprofit has the final word on which interest rate is selected, however, we prefer to see lower interest rates since this generates the most savings for the Nonprofit.
Yes. CollectiveSun provides a full suite of payment processing and loan accounting tools including background checks on each lender in accordance with applicable laws and regulations.
Simply put – the sooner you get solar, the sooner your nonprofit will start to enjoy its benefits! If you wait for some unproven technology down the road, you will have missed the opportunity to enjoy lower energy costs today.
Since each project is different, it is difficult to answer this question without first reviewing the prior 12 months of energy usage data and developing projections for future energy cost savings. Your selected solar installer will perform a full engineering and financial analysis and provide these answers in their proposal.
If you need help finding a reputable installer in your area please contact us, we can use our nationwide contacts to help.
Yes. Many customers feel the pride and peace of mind of solar that ‘pays for itself’ as soon as the system powers on. From a financial point of view, solar is immediately cash-flow positive if financed. With multi-billion dollar grid improvement projects already in place, one thing for certain is that energy rates will continue to increase. Meanwhile, with solar in place, your nonprofit will be able to enjoy a significant reduction in the amount of money spent on energy.
A watt is a unit of measure that represents electricity in a circuit. A kilowatt is 1,000 watts. Let’s say, for example, that there were 100 LED lights and each one was rated at 10 watts. They would total 1,000 watts. If all 100 lights were left on for one hour, they would consume 1 kilowatt-hour (kWh).
Solar production is seasonal. More power is generated during the summer months, less power is generated during the winter months. Hence, production is typically evaluated on an annual basis.
Although federal tax credits are not available to nonprofits (unless they work with CollectiveSun) there may be other state or local incentives that are applicable to your project. You can find more information on the DSIRE website: http://www.dsireusa.org. Any benefits like SREC go to the benefit of the nonprofit.
LCOE is an industry standard method for measuring the cost of energy. Simply stated, it is the total dollars going out divided by the total kWh coming in. That ratio produces a simple cost per kilowatt hour. If that cost is lower than the current utility cost, a project makes economic sense. If not, the project is not economical.
The LCOE represents the cost of power which is a known and dependable number. This contrasts greatly with savings numbers which are based on estimates and wildly unreliable. By focusing on LCOE, a nonprofit can deal with known values and make sound economic decisions. LCOE is particularly important if the nonprofit is comparing a traditional PPA and CollectiveSun’s Solar Power Agreement.
To get an LCOE value for a traditional PPA you have to add up all the monthly payments for the entire PPA term (usually 20 years), including any escalator price increases, and any balloon payment amount at the end of the term (a price the nonprofit must pay to purchase the system) and divide by number of kW hours expected in the 25 year warranty life.
To get an LCOE value for CollectiveSun’s Solar Power Agreement (SPA) you simply take the SPA amount (88% of the installer cost) and divide by the number of kW hours expected in the 25 year warranty life. After determining the LCOE for both options you’ll understand why so many nonprofit organizations praise CollectiveSun for having the lowest possible cost.
Some utility rates increase the cost per kilowatt hour as more kilowatt hours are consumed. This structure is designed to encourage conservation as the more you use, the more expensive the incremental kilowatt hours become.
An escalator is an annual increase in PPA rate. Installers often use this as a way to lower the year 1 PPA rate and hide the true cost of the PPA. Even a small escalator can result in PPA rates that are 200% more expensive by the end of the PPA term. CollectiveSun does not use PPA escalators.
Yes. Roofs must be in good condition. Contact us for more information about the specifics of your project.
No. The ideal roof orientation is 196 degrees on the compass (known as ‘solar south’), but an installation of +/- 50 degrees (155 – 245) is also fine. Within this range, power output stays within seven or eight percent of the maximum. Even more easterly and westerly roof installations are viable, especially on shallower roofs.
For example, a 7/12 roof that is due east or due west still achieves 77% of a system’s potential performance. More important than angle, generally, is shading. We don’t want to see any shading on a solar roof from 9 am to 4pm, year-round. Technological improvements such as micro-inverters can compensate for shading issues to some extent. The best way to know for certain if your roof is viable for solar is to contact us for a free solar evaluation.
No. Solar panels are typically mounted on a purpose-built aluminum rail system that is fastened about every four feet by penetrations into roof rafters.
On a standing seam metal roof, these attachments are made directly to the standing seams, with no roof penetrations. On asphalt roofs, each mount is sealed with 50-year Tripolymer sealant to prevent any leaks. Roof work is guaranteed by the installer to be free from leaks.
As for the weight of the array, it is less than 5 pounds per square foot, so a typical framed roof is more than adequate to carry the weight.
Every kilowatt of solar array takes about 75 square feet.
Shading adversely affects solar generation. Hence, it is best to minimize the impact of any shading.
No. Snow and ice are a reality of installing solar arrays in the Northeast and we design our systems to withstand the toughest weather we get. The reality is, after a snowstorm, your solar panels will be covered in snow. Don’t panic! Usually they ‘self-clear’ quite well on the next sunny day. On an annual basis, the amount of energy production loss due to snow is fairly minor.
The nonprofit is contractually obligated to not to permit any interference to sunlight for the solar system and may not create structures that could cause interference.
Yes. Solar does work in foggy locations. An initial proposal will evaluate the weather conditions in your area including the impact of fog.
While the idea of cutting ties with the electric company may seem romantic, in reality, it is anything but practical except for very specific cases (generally when utility power is not available and prohibitively expensive to install).
No. All solar projects that are grid interconnected are required to shut down in the event of a power failure. This is for the protection of utility employees who could be in danger if solar power is allowed to back feed onto the grid in a power outage scenario.
Solar panels are warrantied for 25 years but will likely last beyond 25 years, albeit with some performance degradation.
CollectiveSun will assess and identify panels with the right mix of optimal efficiency/cost. It’s possible to get slightly higher power panels (i.e. SunPower), but the increased production may or may not be cost justified based on the facts and circumstances of the particular installation.
The most current list of approved panels and inverters can be found on our agreement generator page. If you don’t have access to the agreement generator, please contact us.
Yes, within the Solar Power Agreement (SPA), CollectiveSun lists an approved 0.5% degradation regardless of solar panels / modules manufacturer.
Net metering is an energy policy that allows solar generators to feed excess power into the grid (effectively spinning the meter backwards) and get a credit for energy consumed at a future date.