Building healthier schools is within reach. Up to half the cost of a clean energy project at your school could be refunded to the district under the federal Inflation Reduction Act. Tax-exempt entities such as public schools can receive “direct pay” (also known as “elective pay”). In simple terms, direct pay lets school districts recoup a significant portion of a clean energy project’s cost as a cash payment from the U.S. Internal Revenue Service (IRS). Historically, it wasn’t possible for schools and other tax-exempt entities to take advantage of clean energy tax credits. Now, thanks to direct pay, these entities can receive the full value of the tax credit as cash payment once a project is placed in service.
Benefits of Clean Energy Projects
- Save energy and money;
- Reduce carbon emissions meeting local and national climate goals;
- Create climate resilient hubs and emergency shelters as we face more extreme weather due to climate change;
- Clean up our air, reduce asthma and save money with EV charging and clean school buses;
- Make our learning environments healthier; and
- Improve staff retention, student test scores, and educational outcomes.
Relevant Projects Eligible for Direct Pay Tax Credits
- Battery storage
- EV charging
- Clean school buses
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