Incentives

IRS Direct Pay

Tax-exempt entities can now receive the ITC as a direct cash payment from the IRS.

IRS Direct Pay (Elective Pay)

The IRA introduced Direct Pay (Section 6417), allowing tax-exempt entities — nonprofits, municipalities, schools, churches, and tribal governments — to receive the Investment Tax Credit as a direct cash payment from the IRS. For the first time, organizations without tax liability can fully benefit from solar incentives.

🏛️ Eligible Entities

501(c)(3) nonprofits, state and local governments, public schools, tribal nations, rural electric cooperatives, and other tax-exempt organizations.

💵 Cash Payment

Receive the full 30% commercial ITC as a direct payment from the IRS — no tax liability needed, no tax equity partner required. Direct Pay is available through December 31, 2027, but projects must begin construction by July 4, 2026 to qualify for the full credit.

📋 Pre-Registration

Entities must pre-register with the IRS through the Clean Energy Credits portal before placing their system in service.

📅 File with Return

Claim Direct Pay on your annual tax return (990, 990-T, or applicable form). Payment is issued as a refund after filing.

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