[RE-wrenches] Federal Tax Credits for Nonprofits

[Matt Lafferty]

Howie & all, [CC to RE-Markets]
Adding onto Conrad's response:

As noted by Conrad, the "popular" 3rd party PPA providers aren't too
interested in 1-off systems of this size, if they are even funding projects
at all. Assuming this is a "non-profit" in the traditional sense (not a
public agency or school, etc.) here's my recommendation:

If you don't have the tax appetite to own the system yourself, you may be
able to find a benefactor within the community that does. Discuss the
"donors list" with the Exec Director (or counterpart) of the non-profit.
There may be an existing regular donor that could fund and own the system
under a PPA in lieu of future annual donations, etc. Essentially they get
the "feel good" factor by providing green energy to the N/P and they get
their tax writeoff via the ITC. Tell them to put a plaque on the meter and
take a picture... Host a ribbon-cutting and call the newspaper...

The key here is to find someone (or single organization) that is supportive
of the N/P, has an existing relationship, and is willing and able to put the
money up this year and recover the recoverables over a 5 or 6 year period.
For something of this size and nature, you really don't want to get too
involved with finding and nursing an "investors group".

Hope this is helpful,

Matt Lafferty
gilligan06 at gmail.com

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Answer From Conrad:
If you have the tax appetite, just own the system yourself for 5 years,
charging the site for production.  After five years, sell it to them for
whatever balance you need to get to make the numbers work.  As a solar
installer you can do this without many legal hoops.

Other than that you are stuck forming a small PPA LLC and finding an
investor with passive gains to offset.  10 KW is probably too small to be
worthwhile.  If it was 20 KW, that might work.
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Question From Howie:
Does anyone know of a way that a nonprofit could take advantage of the ITC
on a relatively small gridtie (10 kW)?  The only way I know of is if there
is an historical building involved, but this seems only useful for much
larger projects because of the administrative costs involved in pursuing
this angle.