Frequently Asked Questions

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What is Village Power Finance?
Village Power Finance (“Village Power”) provides a platform that helps community organizations manage and finance solar energy projects by aggregating investments from individuals within the local community and, when needed, raising funds from socially responsible investors.  Village Power provides the management and operational expertise and tools, including a web-based platform, to facilitate a safe, transparent and efficient process to “crowd-fund” a solar facility and any related clean power investments.

How Does Village Power Work?

Village Power collaborates with the leadership of the community organization to provide community members the opportunity to invest in, and profit from, the solar system. Village Power is your partner through the entire system life cycle, which we break into three phases:

Phase I: Educate & Organize
We begin by educating community leaders about the benefits of solar energy and how community organizations can finance a solar project with locally sourced “community capital,” creating a “win” for all parties. We equip community organizations with the tools, to identify, educate, and recruit potential investors from the community through in-person meetings and web-based tools and presentations.

Phase II: Fund & Construct
When enough money to pay for the facility has been pledged, we set up a new company to hold the solar asset (“Solar Project Company”), then work with a qualified solar contractor to install the system. We also create and manage all of the contracts that govern the financing of the Project, using our web-based account management system. In this way, investors can do everything from funding their investments, to e-signing documents, to checking system performance and account status.

Phase III: Asset Manage
Once the Project is constructed, Village Power is there to manage the system and monitor performance. We ensure the solar asset is properly insured, the panels are cleaned, and warrantee claims are handled. Our platform enables community organizations to perform all billing and accounting functions on behalf of investors. The process is completely transparent, and investors can monitor both the system’s performance and their investment through our website. 

Who Pays for the Solar System?
Individual members or stakeholders of the community. In some instances, socially responsible investors from outside the community will also invest. 

Why Doesn’t Our Community Organization Just Buy the System?
Many Community Organizations do not have the budget and/or the desire to make an outright purchase of a multi-hundred thousand-dollar asset.  Further, most Community Organizations are non-taxable entities, and they cannot take advantage of the valuable Federal tax credits available to owners of a solar system. Investors using the Village Power Platform, however, can claim these valuable tax credits. Finally, the Village Power solution provides Community Members the opportunity to invest in a socially responsible business, to keep all the economic benefits of the Project within the community, and to strengthen their bonds with the Community Organization.

Why Can’t Our Community Organization Just Get a Loan from a Bank?
Many Community Organizations cannot meet the strict credit requirements typically demanded by a bank or other financing institutions.  

Why Not Enter Into a Lease Agreement With a Solar Company?
Most solar lease agreements are based upon high interest payments, as the financing institutions generally view non-profits as risky borrowers. Moreover, these institutions are often not local, so the profits from the projects flow out of the community. 

What Happens Once the Project is Installed?
From the moment the ribbon is cut on the new solar system, a Community Organization will start saving money. Village Power manages the Solar Project Company, bills the Community Organization monthly for the electricity produced, collects payment, monitors system performance and coordinates routine maintenance. Once a year, the Solar Project Company distributes income and issues tax forms (K-1’s) to investors. 

Is There a Minimum Investment Amount?
We do not prescribe a minimum investment amount, however solar systems are expensive, typically costing hundreds of thousands of dollars. While it is important to encourage broad participation in the project, we are limited by Securities and Exchange Commission (SEC) rules which pertain to investments of this type and which limit the numbers and dictate the types of investors that can participate in a project. We also strive to keep the number of Village Power Investors at a manageable number so we can maintain a high standard of customer service.

If I Invest, How Do I Get Paid Back?
The Community Organization receives power from the Solar Project Company and pays it a monthly electric bill. This revenue stream is used to pay the system’s operating expenses, and the rest is used to repay the investors.

What’s the Typical Return on Investment?
Investors typically earn between 2% - 7% (IRR), depending on an individual investor’s ability to utilize the tax and depreciation benefits of the solar asset. Similar to buying a bond or a CD, investors will know their projected returns at the outset.

How Much Can Our Organization Save?
A 10% - 20% reduction in energy bills is common for most of our projects, and there is the important social benefit of having switched from fossil fuel to renewably generated electricity. Village Power can also help implement lighting retrofits, upgraded building controls, and other energy efficiency upgrades to produce even greater savings. 

Can We Finance Lighting and Efficiency Projects?
Yes. In fact, because lighting and efficiency projects often yield better returns than solar projects, combining these projects can improve overall returns for investors.

This Whole Process Sounds Complicated.
That’s what we’re here for. Village Power has created a simple, convenient, and transparent process for investors and customers. Using the Village Power Platform, investors can fund their investment securely online, monitor the performance of the solar asset, track distributions, and download all documents needed for tax filing.

Our Organization is Planning a Capital Campaign. Won’t This Project “Compete” for Donations?
It’s important to keep in mind that investing in a renewable energy project on the Village Power platform is exactly that: an investment – not a donation. Assuming the community organization continues to pay its electricity bills, this investment should earn a steady, predictable return for the member over time. Funds invested into a project on the Village Power Platform typically come from an investor’s core capital or asset base such as a retirement savings account, and not from the discretionary funds that are the usual source of donations to a capital campaign.  The Project also has the benefit of maintaining and strengthening bonds investors already have with their community organization, as they will receive an annual dividend check from the Solar Project Company.  

Is There a Precedent for Community-Funded Solar Projects?

Yes. The organizations below have completed solar projects with capital sourced from within their community. These are not Village Power projects; for a list of ongoing Village Power projects, please contact one of our representatives. 

Churches & Schools

  • Christ Church, Portola Valley, CA
  • St. Stephens Church, Orinda, CA
  • Zen Center, San Francisco, CA
  • Christ the King Lutheran Church, Fremont, CA
  • First Chinese Baptist Church, San Francisco, CA
  • St. John’s Episcopal Church, Oakland, CA
  • Greater Richmond Interfaith Program, Richmond, CA
  • North Creek Church, Walnut Creek, CA
  • Berkshire School, Sheffield, MA