Project Snapshot

• Project Type: Nonprofit affordable housing

• Technology: Rooftop solar PV

• Location: Massachusetts

• Placed in Service: 2025

• Total Project Cost: ~$300,000

• Credit Type: Section 48E Investment Tax Credit (ITC)

• Delivery Mechanism: Direct Pay

The Challenge

A Massachusetts-based housing nonprofit installed rooftop solar to reduce long-term energy costs and reinvest savings into its mission. While the solar developer mentioned the availability of a 30% federal tax credit, the nonprofit faced a common challenge:

• As a nonprofit, it had never filed a federal tax return

• Internal staff had limited familiarity with tax credits

• There was uncertainty around bonus adders, including whether the project qualified for the low-income adder

• The organization needed confidence that any claim would be fully compliant and defensible

Without clear guidance, the nonprofit risked leaving a meaningful federal incentive unused.

Bearing Advisory’s Approach

Bearing Advisory supported the project using an engineering-driven, nonprofit-focused ITC analysis, with a strong emphasis on clarity and coordination.

Key elements included:

• Confirming ITC eligibility for rooftop solar PV equipment, including modules, inverters, and interconnection assets

• Evaluating bonus adder eligibility and clearly documenting why the low-income adder was not possible, in this case

• Coordinating closely with the nonprofit’s CPA, who had limited prior experience filing federal returns for direct pay credits

• Translating technical tax and engineering concepts into plain-language explanations so the client could move forward with confidence

Client communication was a critical part of the engagement, ensuring stakeholders understood not just the result, but why it was correct.

Results

• Eligible Basis: ~$300,000

• ITC Rate: 30% base ITC

• Total ITC Value: ~$100,000

• Form of Benefit: Direct pay refund to the nonprofit

The nonprofit successfully received the full 30% Investment Tax Credit through direct pay, providing immediate cash value without needing tax liability or tax equity financing.

Compliance & Documentation

All conclusions were supported by:

• Engineering review of the installed solar system

• Clear documentation of asset eligibility

• Coordination with the CPA to ensure proper filing

• Records prepared for use in the event of IRS questions or review

This gave the nonprofit confidence that the credit was both maximized and defensible.

Why This Matters for Nonprofits

The Inflation Reduction Act opened the door for nonprofits to benefit directly from clean energy tax incentives—but the rules can be complex, particularly for organizations without prior tax-filing experience.

This project demonstrates how engineering rigor combined with practical tax guidance can help nonprofits fully realize the value of federal clean energy programs.