Power for Good: Leveraging Impact Investing to Help Nonprofits Go Solar
Maine B Corp Installs Equipment at No Cost for Schools, Nonprofits and Municipalities
Transitioning to a solar-powered economy as quickly as possible is the mission that drives employee-owned ReVision Energy, a Certified B Corporation with locations in Maine, New Hampshire and Massachusetts. For ReVision, solar is not just about saving money or helping the environment: It’s also about the social good.
“Solar energy not only offers a less expensive, cleaner form of energy than the status quo, it offers the potential for greater social equity,” says ReVision co-founder Phil Coupe. “If we can help nonprofits, communities of all sizes and schools access solar, they can re-allocate money spent on dirty energy toward fulfilling their missions.”
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ReVision’s latest effort, Solar Impact Partners, embodies this ethos. The company just closed a $1 million round of funding that will build solar at no cost for a group of schools, nonprofits and municipalities stretching from Kittery to Bucksport, Maine.
How Solar for Nonprofits Works
Solar has exploded in the private market thanks to a 75 percent decrease in equipment prices since 2010 and federal incentives that include a 30 percent tax credit and accelerated depreciation. As of 2017, the solar industry employed more than 250,000 people and had installed enough solar to power 10.6 million homes.
While all that growth in solar is great news for the planet, it doesn’t necessarily move the needle on social equity. Because the private solar market is predicated on access to tax breaks, nonprofit entities risk being left behind by the solar revolution. This is where a little creative finance can be used for good.
Enter the Solar Power Purchase Agreement, or PPA, in which a host entity agrees not to purchase the actual solar equipment but instead to purchase the electricity generated by solar equipment paid for and installed by a third party. PPA terms vary widely by market and vendor, but in general the idea is that a PPA offers a competitive rate for electricity versus sticking with the traditional utility grid.
Nonprofits can go solar using PPAs because they allow a private, taxpaying entity to build the solar and enjoy the available tax credits. The nonprofit then benefits — at least in ReVision’s approach — from paying no upfront cost for solar, enjoying a cost for electricity that is predictable (PPA contracts are locked in and not subject to rate hikes) and having an option to buy out the solar equipment from the PPA entity at roughly half its original sticker price after seven years.
From 2010 to 2017, ReVision used the PPA structure to install more than 100 solar projects for nonprofits and municipalities in the Maine, New Hampshire and Massachusetts. For many of these projects ReVision, which primarily is a solar construction company, provided the capital and built the project.
Solar Impact Partners is a vessel that allows ReVision’s work to scale. Solar Impact Partners offers impact investors a competitive rate of return by pooling their money into a specialty fund reserved for Solar PPA projects to be built by ReVision.
It’s a quadruple win: The employee-owners at ReVision Energy get a steady pipeline of work, the nonprofits get all the benefits afforded to them by solar, the environment benefits from clean electricity and the investors are able to enjoy a modest reward for using their capital to accelerate the clean energy economy.
“We have been thrilled by the results from our solar project with ReVision. It has lowered our energy costs and increased the morale of our team.”
Solar for the Social Good
An example of how solar can help the social good is at Brunswick, Maine-based Mid Coast Hunger Prevention Program (MCHPP), which supplies more than 350,000 meals to food-insecure Mainers each year. In 2017, ReVision built a rooftop solar array on MCHPP’s new facility at no upfront cost to the nonprofit, helping to improve MCHPP’s long-term economic and environmental sustainability.
“We have been thrilled by the results from our solar project with ReVision. It has lowered our energy costs and increased the morale of our team,” says Ethan Minton, director of development at MCHPP at the time of the installation. Since then, Minton has also taken on a development role at Good Shepherd Food Bank, the largest provider of food to hungry families in the state that, at Minton’s suggestion, is exploring a similar solar project for its facilities in Auburn and Hampden, Maine.
Depending on whether MHCPP ultimately decides to exercise the buyout option offered by ReVision, the project could save the nonprofit as much as $187,000 over a 40-year lifespan.
Solar Impact Partners is an example of how capital can be used to accelerate our transition to clean energy rather than push fuels that harm the climate.
Scaling the Solar Transition
As a follow-up to the fossil fuel divestment movement, ReVision’s Solar Impact Partners is an example of how capital can be used to accelerate the transition to clean energy rather than push fuels that harm the climate. And thanks to the reliability of the sun—which has risen without fail for several million years—it proves to be a stable investment as well. Targeted rates of return for ReVision’s Solar Impact Funds are competitive with more traditional investment options.
“It’s important to put the market to work solving the incredible climate damage our species has inflicted,” Coupe says. “I’ve put quite a few of my own dollars in this basket, and I’m going to continue solar impact investing for the benefit of future generations, and more immediately, to help put my own three kids through college.”
B the Change gathers and shares the voices from within the movement of people using business as a force for good and the community of Certified B Corporations. The opinions expressed do not necessarily reflect those of the nonprofit B Lab.
