Financing Solar Panels Just Became Much Easier. Thank the Climate Bill.

This case study describes how the Inflation Reduction Act (IRA) enables a new third-party financing model for solar energy, specifically benefiting low-income households and nonprofits. It highlights the installation of a 12kW solar array at the Watts-Willowbrook Church of Christ in Compton, California, as a primary example of this model in action.

• The Inflation Reduction Act (IRA) introduced 'Direct Pay' (or elective pay), which allows tax-exempt entities like nonprofits and cities to receive cash back on clean energy project down payments, ranging from 30 percent to potentially 70 percent.
• A new third-party financing model allows non-taxable financial entities (such as green banks, CDFIs, or nonprofits) to own the solar system and pay upfront costs, while the recipient pays a monthly fee. This fee is lower than previous electricity costs because the owner can negotiate bulk rates and utilize tax credits. After five years, recipients have the option to purchase the system, and any payback exceeding project costs is reinvested into other solar projects.
• The Watts-Willowbrook Church of Christ (The Brook) in Compton, California, installed a 12kW solar project with no upfront costs using this model. The project is expected to save the church over $180,000 in electricity costs over the next 20 years and reduce climate pollution equivalent to the sequestration of 350 acres of trees annually. The church plans to add battery storage to serve as a resiliency hub for emergency services like air conditioning during heatwaves.
• The IRA's Greenhouse Gas Reduction Fund (GGRF) provides $27 billion to scale this financing model through upfront capital, low-interest loans, and risk mitigation tools. RMI's RISE Cohort further supports this by providing technical assistance and legal insights to local governments and tax-exempt financial institutions.
• This financing model offers higher potential savings for households compared to traditional solar loans. In Nevada, RMI's Green Upgrade Calculator estimates a household could save between $12,600–$17,800 (with higher estimates of $16,300–$20,400) over twenty years, compared to $10,000 via a traditional loan.

APA

RMI (2024). Financing Solar Panels Just Became Much Easier. Thank the Climate Bill. https://rmi.org/resources/financing-solar-panels-just-became-way-easier-thank-the-climate-bill/

Chicago

RMI. Financing Solar Panels Just Became Much Easier. Thank the Climate Bill. 2024. https://rmi.org/resources/financing-solar-panels-just-became-way-easier-thank-the-climate-bill/.

Wikipedia

{{cite report |author=RMI |title=Financing Solar Panels Just Became Much Easier. Thank the Climate Bill. |date=11 September 2024 |url=https://rmi.org/resources/financing-solar-panels-just-became-way-easier-thank-the-climate-bill/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2024financing, author = {{RMI}}, title = {{Financing Solar Panels Just Became Much Easier. Thank the Climate Bill.}}, institution = {RMI}, year = {2024}, month = sep, url = {https://rmi.org/resources/financing-solar-panels-just-became-way-easier-thank-the-climate-bill/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }