Photo courtesy of St. Philip's Episcopal Church (Beulah, MI)

St. Philip’s Episcopal Church’s Creation Care Committee wanted to go solar and to take advantage of the new incentives available through the Direct Pay (Elective Pay) provision in the Inflation Reduction Act (IRA; this is the federal legislation that incentivizes clean energy, passed in 2022).

Our July electricity bill was $250, and the following month when the solar was up and running, we spent $3.42.

The IRA allows nonprofits-- such as faith-based organizations--for the first time, to qualify for the Investment Tax Credit (ITC) for purchases of renewable energy technologies, including solar, geothermal, and battery storage. These incentives enable faith communities to receive 30-60% back on the cost of their project (30% base credit, and the potential for bonus credits for being located in a low-income community (10%) or in a designated energy community (10%) or using domestic content (10%). 

The church applied for and received a "bridge loan" from Michigan Saves, the state’s nonprofit green bank.

"The Michigan Saves bridge loan was a way to get a lower interest rate than what we would have paid for from our endowment," says Wendy Heeden, the Vestry Warden. "The project was $59,000, and we are looking at getting 30-40% back through the tax credits. Given that, it wasn’t a hard decision. Our vestry was really supportive." 

The bridge loan enables congregations to receive the tax benefits at the outset of the project without having to wait for a potentially lengthy process of receiving the tax credits from the IRS.

Wendy says that Michigan Saves made the process of applying for a loan very easy. The financing will be paid back when the credit is received from the IRS. With the bridge loan and seed money from donors, St. Philip's installed 5 solar-powered tracking devices. "Our July electricity bill was $250, and the following month when the solar was up and running, we spent $3.42." 

St. Philip's initiative, being the first organization in Michigan to take advantage of this financing, hopefully paves the way for other congregations to access these federal dollars for their clean energy projects.