Churches go solar with tax credits
As an Anabaptist Climate Collaborative climate advocacy intern in the Mennonite Central Committee (MCC) U.S. office in Washington, D.C., I spent the summer of 2024 tracking congressional bills that support the transition from fossil fuels to renewable energy. One bill, the Inflation Reduction Act (IRA), stood out for the ways it helps churches and nonprofits to take part in this transition.
Passed in 2022, the IRA expanded tax credits in the form of direct pay to nonprofit organizations, including religious institutions, for installing solar panels and other clean energy technologies. A 2025 budget bill in Congress threatens to cut these popular clean energy tax credits to pay for expanded tax cuts and increased immigration enforcement.
A study conducted by Interfaith Power & Light found that over 2,500 congregations across the U.S. had installed solar panels by 2024. The IRA tax credits make solar installation economically feasible for many more places of worship. It is estimated that these tax credits, along with other policies, will help reduce our nation’s emissions by 44% by the year 2030.
I wanted to know if Mennonite churches in particular were benefiting from the IRA tax credit—which led me to Hesston, Kansas.
When you think of Kansas you may not think of renewable energy. In 2023, oil and gas were among the state’s top 10 economic industries. However, Kansas also ranks in the top 10 states for energy production from renewable sources. And in Hesston, Kansas, one church is leading the way with renewable energy—Hesston Mennonite Church.
The process at Hesston Mennonite began after participants at an annual goal-setting meeting decided to reduce the church’s carbon footprint.
A carbon footprint, measured in tons of CO2 (carbon dioxide), emitted over the course of one year, is an estimate of the impact of our actions on the Earth’s climate. As CO2 and other greenhouse gases accumulate in the atmosphere, they trap the sun's heat, raising the Earth’s surface temperature and contributing to global warming. This phenomenon is called the greenhouse gas effect and amplifies the effects of climate change.
There are various calculators that allow individuals and organizations to calculate their carbon footprint. Intentionally working to reduce our carbon footprint is one way we can minimize our negative environmental impact. Simple actions like unplugging unused appliances or swapping incandescent light bulbs for LEDs can make a sizeable difference.
In the case of Hesston Mennonite, working to reduce their carbon footprint became a multi-month project to install solar panels. Several church members had experience in lowering their individual carbon footprints and in solar energy generation. A committee, which included two science professors from the congregation, drafted a plan to install solar panels that projected savings on the church’s electrical bills and also detailed the social cost of generating electricity from fossil fuels.
The social cost of carbon or SC-CO2 reflects the estimated damages, in dollars, from emitting one ton of carbon. It is a way to quantify the impacts on the environment, human health, agriculture, and property. It also takes into account reduced costs for heating and increased costs for air conditioning due to rising temperatures. The committee’s analysis found the church could save more than $1.2 million dollars in electricity costs and more than $800,000 in SC-CO2 costs over the next 30 years.
When the committee presented the plan to install a solar system to the church body, it was alongside proposals to address failing air conditioning units and to pay off the church’s mortgage. The committee sought to ensure the entire congregation could engage in the decision-making process. Initially there was hesitation about whether the solar panels would significantly reduce emissions, and about the upfront cost of installing a solar system. However, the idea of combining it with other improvements and the mortgage payoff increased the plan’s attractiveness to previously hesitant members that initially did not support the project.
With an estimated cost of $320,000, the committee embarked on a fundraising campaign. In addition to congregational contributions toward the project, Hesston Mennonite received a grant from the Pam De Young Net Zero Energy Fund and a grant from another source.
The Pam De Young Net Zero Energy Fund provides grants to help finance renewable energy initiatives for Mennonite Church USA congregations. These grants range from $1,800 to $10,000. To date, 18 churches have received grants for installing solar panel systems, electric vehicle charging stations, and other renewable energy projects.
In January of 2024, Hesston Mennonite applied for an IRA direct pay refund of $95,000 to cover 30% of the project’s cost. The payment refund was delayed by the IRS and finally received in December of 2024. The refund included an additional $5,000 of IRS interest penalty for a total of $100,000 direct pay to Hesston Mennonite.
In August 2023, just 10 months after the first committee meeting, the solar project was completed! Hesston Mennonite now has a 128,400-watt system comprised of 321 solar panels. Additionally, the church fixed their air conditioning units and celebrated paying off the rest of their mortgage.
Amidst the installation of the solar panels and the accompanying celebration, the committee personally thanked congregation members for the donations that made the project possible.
The IRA is really helpful.”
Nelson Kilmar
Committee member Nelson Kilmer continues to monitor the energy output and savings from the system, compiling monthly reports for the church. In one year, from August 2023 to August 2024, Kilmer says, the church reduced its carbon emissions by 152 tons of CO2, exceeding projections by 4.4%. The church has met the initial goals of reducing the church’s carbon footprint.
Annually the energy produced from the solar system will save the church approximately $24,000 on energy costs and reduce the social costs of their carbon consumption by $25,000. In just one year, the system generated 196,418 KWH, but the church used 176,321 KWH. The church used 10% less KWH than the previous year. While the reason behind this overall reduction in KWH used is unknown, Kilmer suggested that it could be due to the solar system providing shading on the roof and thus reducing the heat load, the roof being better insulated, improved energy management, and more efficient AC systems.
With the cost savings, the church has been able to reallocate money to their outreach budget. By increasing this budget, and lowering their negative SC-CO2 impacts, the church is better able to directly and indirectly serve the local community and beyond.
When Kilmer was asked what he wants people to know about the solar panel project and the IRA direct pay initiatives, he said, “The IRA is really helpful.” It makes solar projects like this one accessible for non-profits, many of which were not able to access these funds in the past because non-profits were not eligible for tax credits.
Kilmer also noted that when local churches see other congregations implementing solar, they are inspired to do so themselves. Local congregations and retirement communities have consulted with Kilmer on their own solar projects and several have been completed. Some members of Hesston Mennonite Church were also inspired to install solar on their homes. These ripple effects from Hesston Mennonite’s solar project could help move their local community, and beyond, toward a more sustainable future for all.
MCC staff are monitoring a 2025 budget bill that would eliminate the IRA clean energy incentives. Removing the popular tax credits would impact nonprofit entities like Hesston Mennonite that want to reduce their emissions. It would also mean the loss of an estimated $300 billion in private investment in the clean energy sector and close to 100,000 jobs over the next 15 years.
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Ally Welty Peachey, a senior Biology and Environmental Science major at Eastern Mennonite University, was a summer climate advocacy intern in 2024 with Mennonite Central Committee’s National Peace & Justice Ministries in Washington, D.C., through the Anabaptist Climate Collaborative.