By David Tewksbury

Running a church, temple, or synagogue is not cheap. Among the largest overhead expenses can be electricity, particularly in the hot months of the year. It may surprise some to learn that the federal government is offering to help with reducing their energy costs. It is true, and the Sierra Club is helping it all come together. 

The 2022 federal Inflation Reduction Act (IRA) includes a dramatic expansion of an already popular tax credit. While prior to 2022, private individuals and companies could be eligible for a federal tax credit for installing solar panels and/or power storage systems, the 2022 IRA expanded the credit to non-taxable entities such as municipalities, schools, houses of worship, and other non-profits. The Internal Revenue Service (IRS) runs this program, calling it Direct Pay or Elective Pay. Because the newly eligible entities do not pay taxes, they can receive payment directly from the IRS for installing and activating a new clean energy system. 

Solar power can be a real boon for a large church or other house of worship. For many of them, afternoon and evening air conditioning costs can be substantial. An appropriately sized array of solar panels can dramatically reduce the cost of electricity from the utility, freeing up scarce congregation resources for other purposes. Depending on the location of the building, as well as other factors, the Direct Pay program can provide houses of worship with 30-50% of the cost of the panels and their installation. The same goes for storage-battery systems. Ultimately, a 40% subsidy through Direct Pay can bring low-cost electricity to a large swath of non-taxable organizations in Southern California. 

Late in 2023, the Angeles Chapter of the Sierra Club launched an ad hoc working group to advocate for local adoption of IRA provisions. The group settled on supporting non-taxable entities wanting to take advantage of the new Direct Pay program.  “Clean energy benefits should go to everyone, especially non-profits who run on such tight margins” says Morgan Goodwin, Angeles Chapter Director. “By helping churches and schools take advantage of the IRA, the Sierra Club is playing a crucial role in our region.” Today, we are working with a solar installer, a tax accounting company, and local religious leaders, to develop a short series of online webinars designed to introduce non-taxable organizations to the basics of Direct Pay.  The goal is to provide leaders with the information they need to decide whether to commission solar panels, with or without a battery system. Installing such a system would simultaneously lower their operating costs and reduce their organization’s carbon footprint. 

Stewardship is a multi-dimensional concept for the leaders of religious organizations. Fortunately, the Direct Pay program helps these leaders to carefully steward both the natural world and their organization’s finances. 

David Tewksbury is a retired communication professor now volunteering in the Angeles Chapter office and excited to be working to promote clean power.