This food bank saved big with solar. GOP cuts could crush similar efforts.

Yahoo

3 days ago

When the team at Second Harvest Food Bank of Northwest North Carolina first started planning construction of a new headquarters in Winston-Salem in 2019, they seriously considered solar panels.
'Food banking at its core has always been about sustainability,' said Beth Bealle, Second Harvest's director of philanthropy, stewardship, and engagement. The organization rescues food that would have ended up in landfills to feed those in need, and Bealle and her colleagues wanted to push the sustainability concept 'in other aspects of our work — like our facility.'
But at the time, they were advised that a rooftop array would be too expensive. Second Harvest shelved the idea and moved into its gleaming new 140,000-square-foot building in a former R.J. Reynolds Tobacco industrial park.
'Fast forward to the Piedmont Environmental Alliance Earth Day Fair of April 2023,' Bealle said. That's where she met the alliance's new green jobs program manager, Will Eley, who asked, 'Did y'all know about the Inflation Reduction Act?'
Eley and Bealle 'hit it off fabulously,' she said. Together, they took the food bank's solar plan off the shelf and worked through the details of complying with the federal law's clean energy incentives. Two years later, on Earth Day 2025, Second Harvest and the alliance flipped the switch on a 1-megawatt array, one of the largest rooftop solar projects in the state.
Assuming promised refunds from the federal government materialize, the project is expected to save Second Harvest $143,000 each year, funds the group says will be reinvested directly into programs that provide food, nutrition education, and workforce development across 18 counties of Northwest North Carolina.
But with the tax rebates now on the chopping block in Congress, other organizations considering new facilities may not have the chance to follow Second Harvest's footsteps.
'We've already talked to several food banks who are in that process about our project, because they're interested in putting solar on the rooftops of their new buildings,' Bealle said. 'And that's not going to be within reach for some people if these tax credits aren't available.'
The federal government has long offered tax credits to incentivize renewable energy projects, from solar farms to rooftop arrays. But before the Inflation Reduction Act, those enticements were of little use to food banks and other entities that don't pay an income tax.
The 2022 landmark climate law allowed organizations like Second Harvest to access the 30% tax credit on their solar investment by essentially transforming it to a rebate.
'The process by which they were able to fully monetize the tax credits was quite the game changer,' Eley said.
In North Carolina, the provision known as 'direct pay' serves as a vital sequel to an expired rebate program from utility Duke Energy, which helped dozens of houses of worship and other nonprofits go solar during its five years of existence.
'Duke Energy had the nonprofit solar rebate, and that was a tremendous tool that was very helpful,' said Laura Combs, a one-time solar salesperson who worked with tax-exempt groups around the state to access the cash back from the utility. 'When the direct payment came into play,' she said, 'that took up that slack.'
The federal climate law also offers other inducements. It provides a 10% bonus to tax credits for projects deployed in government-defined 'energy communities,' including those on former industrial sites or brownfields. At least another 10% is available for clean-electricity projects that are located in or benefit low-income communities.
As an organization that serves food-insecure households and that is headquartered in a poor census tract on a brownfield, Second Harvest qualified for both of these extra incentives.
'We really maximized the clean-energy layer cake,' Eley said.
Altogether, the tax credits cut the $1.5 million price tag for the solar rooftop installation in half, Eley said. While the food bank had to pay the full amount up front and won't recoup those savings until it files its tax return for the year, the extra incentives mean the 1,702 solar panels will pay for themselves more quickly in the form of lower energy bills.
Second Harvest and Piedmont Environmental Alliance hoped the project would serve as a beacon to other nonprofits looking to go solar. And in and around Winston-Salem, that's starting to come true, Eley says.
'It's opened up several doors there,' he said, mentioning that a local credit union and groups like Goodwill have expressed interest in installing panels. 'We're presently working with six faith communities that are navigating [direct pay] and going through their feasibility and contracting processes for solar specifically.'
That tracks with a nationwide trend of houses of worship going solar thanks to the Inflation Reduction Act.
There's also been an uptick in nonprofit installations statewide, according to data compiled by the North Carolina Sustainable Energy Association.
The association doesn't monitor whether institutions access the direct-pay feature, and some recent arrays may be holdovers from the Duke rebate program, which ended in 2022. But the numbers are striking nonetheless: Since 2011, almost 150 houses of worship, local governments, and other entities that don't pay taxes have erected solar arrays, nearly all on rooftops. Sixty-three, or 42%, did so in 2023 and 2024.
Now, Eley said, the groups he's working with are especially motivated to act quickly.
'The idea of going solar has been something they have tossed around for a number of years,' he said. 'We're certainly reiterating to them if you're going to make that investment, do so now.'
That's because the massive budget bill passed last month by the House — dubbed the One Big Beautiful Bill Act in an homage to President Donald Trump — would make tax credits for solar and other renewable energy projects nearly unusable. The Senate is now considering whether to pass the measure as is or to make changes.
As the legislation stands now, projects would have to begin construction within 60 days of the bill's passage to access the 30% tax credit. That's an easier feat for a rooftop installation than a larger, ground-mounted affair, but still incredibly difficult for nonprofits, religious institutions, or local governments that tend to have lengthy decision-making processes and aren't already planning to go solar.
Even more unworkable is a provision that requires documentation that no component of a project, no matter how small, is linked to a ​'foreign entity of concern' such as China.
While House lawmakers voted to make the underlying 30% tax credit virtually useless, they didn't explicitly target the three related adjustments that helped enable the Second Harvest project: direct pay, the low-income community benefit, and the brownfield benefit.
'These cross-cutting provisions are part of the tax credit structure, but they are their own mechanisms,' said Rachel McCleery, the former senior adviser at the U.S. Department of the Treasury who led stakeholder engagement for the climate law's implementation.
The survival of direct pay in the House measure stands in contrast to the elimination of its twin in the private sector, transferability, which allows smaller energy companies better access to incentives.
But direct pay means little if the baseline 30% tax credit is still hamstrung by the 60-day start-work requirement and the foreign-entity provision.
'This is backdoor repeal of the IRA,' said McCleery, who now advises clients on defending clean energy tax credits, 'and it's backdoor repeal of direct pay — because you can't use direct pay if you don't have an underlying tax credit.'
The same applies to the bonus incentives for low-income and brownfield communities. 'These cross-cutting mechanisms can still be used,' McCleery said, 'but if the underlying credit is moot, that essentially repeals the mechanisms.'
On the flipside, if the Senate restores the viability of the underlying 30% tax credit in its version of the bill, the mechanisms that aid nonprofits like food banks and houses of worship will also be accessible.
But advocates say that remains a big 'if.' And there are other challenges: Slashes to the Internal Revenue Service workforce could delay payments to Second Harvest and others. And the group is bracing for the impact of the other budget cuts in the House bill as written, such as to food assistance and Medicaid.
'It's just going to put pressure on people who are already under-resourced,' Bealle said. 'And that has a ripple effect to every organization that supports under-resourced people, including us.'
Combs, the former solar sales professional who also volunteers with climate advocacy group North Carolina Interfaith Power and Light, called it a 'tragic snowball.' She then brought up U.S. Sen. Thom Tillis, the North Carolina Republican who has consistently voiced disapproval of a full-scale repeal of the tax credits.
'Thank goodness Sen. Tillis has spoken out and been a leader on the importance of the Inflation Reduction Act incentives,' Combs said. 'I am anxious to see how this plays out in the Senate.'