For the first time, tax-exempt organizations and government entities in Illinois and Missouri can receive a 30% cash refund through the federal tax credit for going solar. Through Direct Pay (Elective Pay), the IRS treats the solar tax credit as an overpayment and refunds it directly to the organization. When combined with regional programs like Illinois Shines (SRECs) and utility rebates, tax-exempt entities could see up to 50–70% of their project costs covered, delivering an average payback period of 6 to 8 years.
Find out how much government and nonprofit solar incentives can save for your organization.
Choosing solar is a significant financial decision that requires a partner with deep local roots. Since 2006, StraightUp Solar has installed more than 3,200 projects across Illinois and Missouri. As a Certified B Corp guided by our CLEARE Values, our local team provides the expertise needed to navigate policy shifts and maximize incentives while building long-term energy resilience for our community.
Discover how solar incentives and financing can help bring your solar vision to light.
Safe harbor regulations—which involve meeting specific financial or physical work thresholds—can be used to protect your project’s eligibility and lengthen the allowable timeframe for completion. Start your assessment to discuss your safe harbor strategy with a project developer today.
Public and nonprofit sectors can gain a powerful ROI by participating in the Illinois Shines program. Your organization can recover 30-35% of the original solar system cost with cash payments distributed on schedules based on your system size. Your SREC value is calculated based on the first 15 years of your PV system’s expected production. Please note that SRECs are not available for organizations utilizing a power purchase agreement (PPA).
Net metering ensures your organization receives credit on your utility bill for the excess solar energy you send back to the grid. In Illinois, new projects receive credits for the supply portion of their electric bill, which carry forward month-to-month. In Missouri, many utilities continue to offer 1:1 retail credits for systems up to 100 kW, providing an immediate reduction in monthly operating expenses.
Organizations located in Ameren Illinois or ComEd territories can unlock cash rebates that further lower the net investment.
We provide a multi-layered security net to ensure your system fulfills its mission for its 25+ year lifespan, protecting your organization’s budget and long-term resilience.
We help you choose a path that fits your organization’s balance sheet.
Financing through Clean Energy Credit Union is available for projects between $50,000 and $1.5 million. These loans typically carry 10, 12, or 15-year terms, though smaller requests may be reviewed on an individual basis.
Third party investors have a strong interest in solar. With the available federal tax incentives and SRECs, a third party investment partner will pay to install and own the solar system on your property. Through the PPA you buy only the kilowatt hours the system produces.
Third party for-profit investors are often interested in arrangements other than a PPA, to take advantage of the federal tax incentives that tax-exempt entities can not. There are numerous legal and regulatory securities and utility tariff hurdles associated with this model. (As a result, PPA’s are not available in Missouri.)
However, there is a unique rarely utilized arrangement which involves creation of a benevolent for-profit LLC partnership. This method, complex & time-consuming, is as-of-yet untested in Missouri or Illinois. But the possible benefits to the community and the benevolent process itself, make it worth further investigation.
North Carolina Interfaith Power and Light is an organization of faith-based congregations working on climate change. They have put together an excellent guide that describes 2 congregations that successfully used the benevolent LLC approach.
If you decide to dive into the really technical aspects of the benevolent LLC model, A Guide To Community Solar: Utility, Private, and Non-profit Development, was a seminal document sponsored by the National Renewable Energy Lab and originally published in 2011. While its focus is on Shared Arrays and for-profit investors, the discussion of Special Purpose Entities (starting on page 12) provides a bit more insight about how an LLC can work.
Financing through Clean Energy Credit Union is available for projects between $50,000 and $1.5 million. These loans typically carry 10, 12, or 15-year terms, though smaller requests may be reviewed on an individual basis.
Through this State Treasurer’s program, participating banks and credit unions offer 2-3% interest loans to both individuals and businesses. This program has been infrequently used for solar electric projects due to certain limitations. However, the program is well-funded and worth looking into.
Goal: Support a residential program for adults with developmental disabilities by reducing utility overhead.
Strategy: Utilized a competitive bidding process to secure a high-efficiency 65.12 kW rooftop array.
Impact: This 148-panel system is expected to produce over 2,350 MWh of energy over its lifespan.
Bottom Line: By offsetting the equivalent of 1.8 million pounds of coal, the savings from this system allow St. Louis Life to focus more resources directly on their residents.
*All scenarios are unique, your experience may differ.
Goal: Offset energy demand from a new building renovation and stabilize rising utility rates.
Strategy: Layered the 30% Direct Pay refund and Illinois Shines (SRECs) to build a compelling financial case.
Impact: Estimated savings of $11,000 in Year 1 and projected 25-year savings are $471,000 with a 7.8-year payback period.
Bottom Line: These savings are redirected toward ministry priorities, proving that solar is a faithful investment in the future.
*All scenarios are unique, your experience may differ.
They are the same thing. “Elective Pay” is the official IRS term, while “Direct Pay” is the common name used by the solar industry. Both refer to the mechanism that allows tax-exempt organizations to receive a 30% cash refund (Federal Investment Tax Credit) for solar and battery storage projects.
The process involves a few specific steps:
Pre-Filing Registration: After your system is placed in service, you must register with the IRS through their online portal to receive a unique registration number.
Tax Filing: Even if your organization doesn’t normally file taxes, you will file a Form 990-T (for nonprofits) or the appropriate government tax form, including Form 3800, to claim the refund.
Payment: The IRS processes the return and issues the refund as a direct payment to your organization.
Yes. Nonprofits and local governments can stack Direct Pay with other state incentives and federal grants. However, it is important to note that the total amount of all tax-exempt financing and grants cannot exceed the total cost of the project. StraightUp Solar’s experienced solar project developers help you model these “stacked” scenarios to ensure you maximize your return without exceeding federal limits.
*Disclaimer: We are not tax professionals, we are solar experts. Please consult with your tax advisor to see how the Federal Investment Tax Credit can work best for you.
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