Last year’s “One Big Beautiful Bill” (OB3) and the executive order signed shortly after its passage rapidly phase out solar tax benefits and add new restrictions for nonprofits who want to go solar.
We’ve been keeping you updated on these developments with articles and webinars that chart a path forward to help your nonprofit go solar — but only if you act now. We urge nonprofits to act as quickly as possible, while the Investment Tax Credit (ITC) for solar projects is still in place.
By acting now, you can still lower your nonprofit’s electric bills with solar.
What does that mean for your nonprofit?
Power bills are going up
You’ve probably noticed your electricity bills going up for both your home and your nonprofit. There are no signs of this changing in the foreseeable future.
What has caused rising electric rates? Electricity demand has been growing after years of remaining flat, driven by large data centers as well as building and transportation electrification, which is becoming more common. In some regions, wildfire or hurricane mitigation is driving up costs. And across the nation, our aging power grid is in need of upgrades. None of these factors will go away anytime soon.
The fact that electricity rates are so high makes solar even more attractive as a cost-saving measure. That’s true at today’s rates, and it will be even more true as electricity rates keep going up. With solar, your monthly payments either remain steady or go up at a much slower rate, depending on which financing option you choose for your nonprofit solar project. That allows you to hedge against future electricity rate hikes.
Payback periods are coming down
Now, there’s another benefit to installing solar. The payback period for commercial-scale solar installations — which includes solar installations for nonprofits — is coming down. That means your solar system will pay for itself more quickly than in the past.
Research firm Wood Mackenzie recently modeled two commercial-scale solar system scenarios. The first scenario assumed the average U.S. retail rate for electricity would grow 2% between 2026 and 2050 — a very conservative assumption. The second scenario used a 6% growth rate.
While the Berkeley Lab found that average retail electricity rates increased 2.5% per year between 2014 and 2023, looking at recent years tells a different story. According to the Energy Information Administration, nominal year-over-year increases in residential electricity prices averaged 7% over the winters from 2022 to 2024. Commercial electricity prices follow the same trends, and given the factors driving rate increases, the rates are likely to continue going up.
So it’s possible that even the Scenario 2 number might be conservative.
The increase in electricity rates from Scenario 1 to Scenario 2 resulted in a huge 33% decrease in commercial solar payback periods — from 6.3 years to 4.2 years. That’s the national average. Payback periods are even shorter in states with higher electricity rates, like California, Hawaii, and New York, where your solar installation might pay for itself in just a couple of years.
The exact payback period for your solar project depends on a number of factors beyond electricity rates in your state, such as your solar installation size, local and state incentives for solar, and which financing option you pick for your nonprofit. But one thing is clear: rising electricity rates are driving down commercial-scale solar payback periods across the nation.
That means now is a good time to start your solar installation — and if you start before July 4, 2026, you may also benefit from the Investment Tax Credit.
Helping your community
Nonprofit organizations tend to have a focus on the communities they serve. So you’ll be glad to hear that installing solar can also help your community.
Distributed solar installations, like the ones for nonprofits, can help lower electric rates and save money for ratepayers.
A 2021 study found that scaling up local solar + storage in coordination with utility-scale renewables would save the U.S. $473 billion by 2050. A recent study found that expanding distributed solar and storage installations in New York could save ratepayers there $1 billion annually; another found that solar and storage could save Massachusetts ratepayers $313 million annually. But this isn’t just theoretical: in 2024, rooftop solar in California saved non-solar ratepayers $1.5 billion.
Get started now
If saving money for your nonprofit while also helping your community save sounds good to you, now is the best time to start your nonprofit solar project.
Let us help you! CollectiveSun is here to support your nonprofit before, during, and after your solar is installed. We can guide you through the process of determining whether solar makes sense for your organization, as well as which financing option is best for your specific needs.
If you’d like to explore getting solar for your nonprofit and find out how much you can save, don’t hesitate to reach out to us.
