Washington, D.C. — States now have a significant opportunity to boost their clean energy economies through direct pay, a policy enabling public and nonprofit organizations to access substantial discounts on self-built and owned clean energy projects.
A recent issue brief from the Center for American Progress details how direct pay—an element of the Inflation Reduction Act—permits tax-exempt entities such as states, local governments, and nonprofit organizations to benefit from federal clean energy tax credits for the first time.
The brief outlines several ways state governments can support eligible entities, including cities, Tribal nations, schools, and municipal utilities, in accessing these credits. These methods include:
- Providing bridge financing to help local and community clean energy projects manage upfront costs.
- Offering education and technical assistance regarding direct pay.
- Leading by example by developing their own clean energy projects using direct pay.
- Maximizing the uptake of clean energy tax credits through utility oversight and establishing clean energy standards.
States play a crucial role in ensuring that tax-exempt entities fully benefit from the direct pay policy. By taking the lead, states can facilitate job creation, cost reduction, and climate change mitigation through increased implementation of clean energy projects within their communities and across the nation.
For further details or to speak with an expert, please contact Sam Hananel at [email protected].
###
