What is direct pay?
With a mix of federal funding and tax credits, the Inflation Reduction Act includes a new mechanism called direct pay for tax-exempt entities — local governments, tribal nations, nonprofits, faith communities, and cooperative and municipal utilities — to take advantage of many of the new clean energy tax incentives included in the law.
What is eligible for direct pay?
There are two ways direct pay will be most helpful for tax-exempt entities: electric vehicles and renewable energy systems.