School districts can now access uncapped, noncompetitive and unlimited direct payment in lieu of federal tax credits to finance clean energy initiatives like solar panels, ground source heat pumps and electric buses.
These investments can result in reduced costs and air pollution and provide resilient infrastructure, said those supportive of the new initiative.
Known as the ”direct pay″ provision in the Inflation Reduction Act, the program allows tax-exempt entities like schools to receive tax-free cash payment for qualifying projects for the tax year their clean energy initiatives were put into service. This funding can be combined with other revenue sources, such as grants and utility rebates, and covers projects that began service after Jan. 1, 2023.
