Food bank’s solar savings may be hit by GOP cuts
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The content covers the impact of legislative changes on solar installations and tax credits, particularly for non-profits and faith communities. Interest in solar installations has grown, with nearly 150 entities that don’t pay taxes, including houses of worship and local governments, installing solar arrays, largely on rooftops, since 2011. However, a recent budget bill could make tax credits for such installations virtually unusable, putting pressure on non-profits, religious institutions, and local governments with lengthy decision-making processes, and placing the future of such initiatives in uncertainty.
The Rise of Solar Installations in North Carolina
Local interest in solar panel installations has grown, with groups like Goodwill and local credit unions showing interest. Currently, six faith communities are exploring the feasibility of solar adoption.
Uptick in Nonprofit Installations
Data from the North Carolina Sustainable Energy Association shows a significant increase in nonprofit solar installations. Since 2011, nearly 150 tax-exempt entities, including houses of worship and local governments, have built solar arrays. A notable 42% of these installations occurred in 2023 and 2024.
Threat to Clean Energy Tax Credits
The recent budget bill, known as the One Big Beautiful Bill Act, makes tax credits for solar and other renewable energy projects nearly unusable. If passed as is, projects would need to start within 60 days of the bill’s passage to access the 30% tax credit, posing a challenge for organizations with lengthy decision-making processes.
Impact on Direct Pay Mechanism
Direct pay, a critical mechanism for the success of projects like the Second Harvest, remains untouched in the House measure. However, its effectiveness relies on the baseline 30% tax credit, which faces constraints due to the 60-day start-work requirement and the foreign-entity provision in the bill. If the tax credit is hamstrung, direct pay is practically useless.
Future of Tax Credit Mechanisms
The future of the tax credit and associated mechanisms depends on the Senate’s action. If the Senate restores the effectiveness of the 30% tax credit, these mechanisms will also be available to nonprofits like food banks and houses of worship. However, challenges such as cuts to the Internal Revenue Service workforce could cause payment delays.
The Impact on Under-Resourced Communities
Proposed budget cuts in the bill could further strain under-resourced communities and the organizations that support them. Combs, former solar sales professional and climate advocate, considers this a ‘tragic snowball’ effect. Meanwhile, Sen. Thom Tillis, who has consistently opposed full-scale repeal of the tax credits, remains a glimmer of hope for solar advocates.
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