You may know CollectiveSun as a solar financing company, with financing tailored specifically to nonprofits. Since 2011, we’ve funded hundreds of solar projects for nonprofit organizations, freeing up their resources to advance their missions.
What you may not know is that CollectiveSun does much more than just fund solar projects. Our funding solutions help nonprofits navigate the complex world of solar with confidence, delivering robust protections before, during, and after installation to help ensure your project is successful and risk is minimized. That includes contractor vetting, construction management, fund control, and more.
We offer two solar funding models:
- Solar Loans: The nonprofit owns the system and selects their installer. We support the nonprofit with risk mitigation tools like contractor vetting, milestone-based payments, and direct pay tax filing services.
- Solar Power Agreements (SPAs): CollectiveSun owns the solar equipment and the nonprofit owns the energy generated by the system. We manage the project from start to finish, including contractor selection, construction oversight, and performance guarantees.
Both options include our signature wraparound services, with risk mitigating best-practice strategies for insurance, warranties, payment and performance bonds, contract and milestone schedules, and many other practices that safeguard nonprofit projects.
Contractor vetting
Solar Loans
When CollectiveSun provides a loan to a nonprofit, the nonprofit selects the solar installer and we provide basic vetting of the installer.
We require that the selected installer complete our Contractor Application Form and onboarding process. As part of the application, they must provide a copy of their W9, contractor license(s), proof of insurance, Federal Employer Identification Number, financial statements, references, and commercial project history for the past year. Contractors must also provide further detailed information such as their primary markets served, number and type of installations, bonding capacity, and references.
Solar Power Agreements (SPAs)
When a nonprofit finances their solar project with a CollectiveSun SPA, we handle all the work related to vetting and selecting the solar installer. Because CollectiveSun is bearing construction risk, we require that contractors meet CollectiveSun’s rigorous full vetting requirements.
In addition to the requirements for the contractor vetting process for Solar Loans, for our SPAs we also conduct a phone interview with the installer.
Construction management
CollectiveSun provides construction oversight for every solar project we finance, but the degree of involvement differs based on the funding structure. This distinction respects the legal and financial structure of each project while delivering the level of care, diligence, and protection our nonprofit partners rely on.
CollectiveSun SPA: Full construction management
For projects funded through a Solar Power Agreement (SPA) — where CollectiveSun retains ownership of the system — we provide comprehensive construction management. Our team actively manages the full construction lifecycle, including:
- Monitoring progress and verifying that work performed is consistent with the project schedule and contract scope.
- Reviewing all construction documentation, including milestone invoices and preliminary notices.
- Preparing conditional and unconditional lien waivers for progress payments and final payments.
- Coordinating signatures, contracts, and regulatory documentation.
- Requiring and verifying builder’s risk insurance or equivalent risk mitigation strategies to protect the solar equipment when it is on site but not yet installed, in transit, and in storage. Also known as “course of construction” insurance, this is a property insurance that helps protect solar projects while they are under construction, a critical period for any project. During this period, the project is not yet covered by a property policy, leaving it especially vulnerable. Requiring builder’s risk insurance mitigates this risk.
- Managing the critical documentation for the projects we fund, including invoice review, lien releases, signatures, and contracts. To ensure that everything is in order, we review preliminary notices, which are standard parts of construction projects in many states that establish lines of communication and share information among all parties, promoting good working relationships and facilitating a successful project.
We take the lead to ensure that the system is built to high standards, on time, and in accordance with the contract — because we are the system owner.
CollectiveSun Solar Loan: Coordinated construction oversight
For projects funded through a CollectiveSun Solar Loan, the nonprofit customer owns the system from day one. In these cases, we provide a modified version of construction management focused on fund control and risk mitigation through documentation review.
We coordinate closely with the installer, customer, and all parties involved, but unlike with an SPA, we are not directing the construction — we are protecting the customer’s investment through oversight and disciplined disbursement protocols.
Fund control
An extremely important part of construction management is fund control. Simply stated fund control is construction payment oversight. During construction of a solar project, we control the funds by disbursing payments to the solar contractor according to a construction milestone schedule. Funds for each project milestone are not disbursed until each milestone is completed; ensuring that each milestone is completed before payment is disbursed prevents issues from arising later in the process.
The fund control process begins when a CollectiveSun Solar Loan or CollectiveSun Solar Power Agreement (SPA) is signed. CollectiveSun bears the responsibility for managing the disbursement of funds to all solar contractors and subcontractors/material suppliers.
First, we get a list of all project milestones and their corresponding payments due by reviewing the solar installation contract. Then, when each milestone payment is requested by the solar installer, we review the installer’s invoice and work performed on the project against the milestone provisions in the contract, and we confirm that the work has been performed. We also secure any appropriate lien waivers and releases for each milestone payment. A lien waiver states that once the payment is received by the claimant (i.e., the contractor, a subcontractor, or a supplier), they waive their right to place a mechanics lien on the property. By tying payment to verified performance, we protect nonprofits from contractor default, poor workmanship, or mismanaged funds.
In some scenarios, when we issue checks for a milestone payment, the payment is made to both the contractor and the subcontractor (or supplier). In those cases, we have one party endorse the check and the other one deposit it. These multi-party checks protect against a situation in which a contractor gets paid but doesn’t pay their subcontractor or supplier; with multi-party checks, we can be sure that both parties are paid, thereby avoiding any issues or potential misappropriation.
The fund control process ends with the receipt of the unconditional lien waiver and release on final payment.
Additional risk-mitigating features of the solar loan
In addition to project management, we also require contractors to be fully insured, provide a payment and performance bond (or equivalent), and agree to the principle of payment being issued for work performed rather than payment in advance of work performed.
We require a workmanship warranty be included, and we require the contractor to include a provision for liquidated damages and a provision allowing the customer to terminate for convenience in their installation agreement.
Once the project is installed and has an initial set of performance data available, we perform a system check to ensure it is performing as expected based on the installer’s initial proposal document.
After your system receives permission to operate we provide a PVWatts report showing your estimated annual production and a reminder to check expected savings in 60 days.
One year post permission to operate, we perform another check to evaluate the system’s first year of performance compared to the installer’s initial proposal.
Our loan also includes a Direct Pay Tax Filing Service including the preparation and submission of forms 990-T, 3800 and 3468.
Making your project successful
We want your nonprofit’s solar project to succeed and to support you in serving your community.
Nonprofits are mission-driven, but most don’t have in-house construction teams. That’s why CollectiveSun builds in protections that would typically require expensive legal and technical consultants.
From contractor screening to milestone verification and fund disbursement controls, we act as a project partner, not just a lender.
CollectiveSun is here to help you before, during, and after your solar is installed. If you have questions about our contractor vetting, construction management, or fund control, don’t hesitate to reach out to us.
