Solar for churches, schools, and nonprofits in Kentucky, explained for the board

Solar for churches, schools, and nonprofits in Kentucky after the 2025 law

Solar for churches, schools, and nonprofits in Kentucky still has a federal path. Under current law, tax-exempt organizations, state and local governments, and other applicable entities can elect to receive certain clean energy credits as a direct payment from the IRS. That’s called elective pay, or direct pay. The 2025 budget law left the mechanism in place but tightened the credits underneath it, especially for solar.

The short answer for most boards: the route still exists, the calendar is tight, and the details decide whether the payment arrives. We’re fee-only and independent. We don’t sell panels, install them, or give tax advice. We help your board see the whole route before anyone signs.

How elective pay works

1. Register first. The IRS requires pre-filing registration for the project before you can make the election.
2. Place the system in service. The credit belongs to the tax year in which the system starts operating.
3. File a return. Organizations that don’t normally file one, including many churches and local governments, generally use Form 990-T to make the election.
4. Receive the payment. The money arrives only after the return is processed, which can be more than a year after you paid the installer. Plan reserves or bridge financing.

Three dates and one number

• July 4, 2026 has passed. Solar that hadn’t begun construction by then generally must be placed in service by the next date.
• December 31, 2027. Solar placed in service after that date generally can’t earn the 48E or 45Y credit.
• After 2025, projects that begin construction face restrictions on material assistance from prohibited foreign entities.
• 1 MW AC is the number to watch. Below it, the full credit doesn’t require prevailing wage and apprenticeship compliance, and elective pay isn’t cut for domestic content. At or above it, both rules apply, and elective pay for a project starting construction after 2025 can drop to zero without domestic content compliance or a Treasury exception.

Most church and school roofs land well under 1 MW. Large campuses, county facilities, and ground arrays may not. Whether to size or phase a project around the line is a question for your tax professional, and we’ll prepare the numbers they need.

Owning versus a PPA

Some organizations sign a power purchase agreement instead. The third-party owner claims the credit and sells you the power at a set price. That avoids the elective pay paperwork but usually adds an escalator and a 20- or 25-year contract. We compare both paths on cash flow, risk, and what happens if you sell or close the building.

Reports a board can read

Boards and councils change members. Every report includes an assumptions page, a one-page summary, and a recorded walkthrough, so the next treasurer understands the decision. For dioceses, districts, and agencies with many buildings, we rank sites before procurement and track them afterward with Portfolio Performance Reporting.

Where to start

Begin with a Commercial Feasibility Study. When you’re ready for bids, Installer RFP & Bid Leveling gives your board comparable proposals, and Equipment Sourcing & Documentation assembles the component records your tax adviser will ask for.