Direct Pay in the IRA: Lowering Energy Costs with Clean Energy for Tax Exempt Entities & Governments
On Thursday, July 11, Maryland League of Conservation Voters Education Fund joined U.S. Congressman, Steny Hoyer, and U.S. Department of Treasury on a webinar to provide information to local governments, non-profits, and others about clean energy tax incentives made possible through the through a provision in the Inflation Reduction Act (IRA). The IRA, passed under Democratic leadership in the 117th Congress and President Biden in 2022. Among its many provisions, the IRA included a suite of financial incentives, including tax credits to spur deployment of clean energy and zero emissions vehicles and infrastructure. The webinar focused on a key provision in IRA that allows eligible entities the opportunity to lower their long-term energy costs by implementing clean energy technology at a subsidized rate through Direct Pay provisions established in the Inflation Reduction Act.
Two years after helping to pass the most sweeping climate legislation ever to come out of the Federal government, Congressman Hoyer is committed to implementing the law and ensuring Marylanders know how to share in the environmental benefits and cost savings the law offers. “I helped lead Democrats in passing transformational tax incentives last Congress so that community partners in Maryland’s Fifth District can lower their everyday costs while protecting our planet,” said Congressman Hoyer.
Here’s a recording of the webinar if you missed it:
Established through the Inflation Reduction Act in 2022, Direct Pay policies empower the U.S. Department of Treasury and the Internal Revenue Service (IRS) to provide a range of organizations previously unable to access clean energy tax credits access to the innovative tool.
How it works: Tax-exempt and governmental entities can receive a direct payment of a tax incentive when installing a clean energy project in their properties. For example, a library can file an annual tax return with the IRS to claim elective pay for the full value of the investment tax credit or the production value of the tax credit, which can be anywhere from 30% – 70% of the total project cost depending on if the project meets certain bonus criteria.
This week Department of Energy (DOE) issued a funding notice to develop elective pay blueprints for communities. More info can be found here and here. DOE is hosting office hours and a Q&A session on July 25, 2024 from 3:00-4:00 PM ET. Folks can register here: July 25, 2024 Office of Policy Office Hours (wufoo.com)
Here are the slides that were shared during the presentation as well.



