Financial Models
Financial information and access to Life Cycle Analysis spreadsheets are provided on this page.
“Ball Park Estimating techniques are available for organization just starting out –
Other financial information can be found here as well:
“Externalities” aka ignored social costs that are considered “subsidies”
Fossil Fuel Subsidies
United States Spend Ten Times More On Fossil Fuel Subsidies Than Education
Information on three financing ‘paths’ is provided below. Your circumstances will determine what path works best for you.
Path A: Just Do It. Use internal financial resources consisting of a combination of member donations and member low interest loans. Avoided commercial / Wall Street capital. Any financial gain stays within the church community. Minimal public ‘subsidies’ are involved. Simple – the LLC model was reduced to a Partnership. Our church Board was not friendly and required a ‘Revenue Neutral’ funding approach, i.e., No increase in church operating cost. This is the Path First Universalist Denver ended up on. The name of our Partnership was Seventh Principle Partnership – the legal agreement (without member names) is enclosed.
Path B: Form Member ‘For Profit’ LLC. Leverage tax credit benefits available to ‘for profit’ organizations by forming a friendly ‘for-profit’ third party investor. Take advantage of the Federal 26% Investment Tax Credit and IRS 5-year Equipment Depreciation write off. Church negotiates a Power Purchase Agreement with the friendly third party. After 6 years, church buys equipment from LLC at a reduced cost – there is a significant bump in church expenses that buy-back year. Works for projects involving solar PV – when we added in the cost numbers for installing and operating a heat pump system, this model didn’t work for First Universalist Denver. This funding model was developed by a Lutheran Church and later used by an Episcopal church in our local Boulder area.
Please see Case Studies @ https://coloradointerfaithgreenbuilding.org/case-studies-2/ Scroll down to St. John’s Episcopal Boulder for their project timeline and download some of their legal documents:
10. Solar LLC Participation Information
10.1 Operating Agreement for St Johns Church Solar LLC
10.2 SJ Solar Cash Flow Projection
12. Power Purchase Agreement (between LLC and St John’s)
Path C: Find Friendly ‘For Profit’ LLC. Same as Path B, but open to all investors. Will likely cost church more than Path B in the long term because Path C investors may be ‘socially responsible investors’ but still expect more ROI than church members – the financial gain of the outside investors tends to be a financial loss to church members (and/or taxpayers as subsidies or grants).
Please see a good discussion of third party financing (for-profit LLCs and government grants) from a 2021 webinar – see links below: Except for the comments from John Bringenberg who mentioned Geothermal at the end of the Q&A session, the information focused on adding solar PV only.
Creative Solar Funding Strategies For Non-Profit Organizations Webinar – YouTube
https://www.youtube.com/watch?v=SKLloGA39Uc
Boulder County Partners for a Clean Environment (PACE) hosted a webinar exploring strategies that non-profit organizations could implement to fund solar projects.
Webinar Speakers:
Ambra Sutherlin – Moderator PACE
Jeff Kodish – Har Hashem Temple 2:00
Nick Perugini- Solaris Energy 12:47
Heath Mackay – McKinstry 24:30
Tom Hardie – Partners for a Clean Environment (PACE), Boulder, CO 36:05
Thomas Polich – TAP Synergy Works 45:10
Q&A – 59:35
John Bringenberg – First Universalist Denver 1:09:20
First Universalist tried to use Path B & C but when we include the cost/pay back of heat pumps into the project, Path B didn’t work because we didn’t have enough member investors with sufficient passive income. We were unable to find any Path C investors willing to finance a project other than solar (i.e., one with solar & heat pumps).
Hopefully things have changed and you will have better luck.