Harnessing the Power of Nonprofits to Deliver Low-Cost Solar to Low-Income Homeowners in Minnesota

The case study outlines a collaboration between Solar United Neighbors (SUN) and One Roof Community Housing to provide low-income homeowners with solar energy systems using the "Direct Pay" provision of the Inflation Reduction Act (IRA). The program allows nonprofits to receive a federal tax credit refund, enabling them to install solar panels at no upfront cost to homeowners. Homeowners benefit from lower utility bills, and after five years, they will own the system with minimal maintenance responsibilities. The initiative aims to address financing challenges for low-income households while reducing carbon emissions and promoting energy equity.

SUN and One Roof will deploy solar on the rooftops of participating One Roof homeowners in northeastern Minnesota. We‘ll use an innovative lease model that enables One Roof to claim the Federal Tax Credit through “Direct Pay.” One Roof will then pass the savings onto the homeowners. “Direct Pay” is a provision of the IRA. It allows nonprofit organizations to receive the value of the tax credit as a refund from the Internal Revenue Service.