Direct pay, also known as elective pay, is an unsung hero for local governments and community organizations to accelerate economic investment and job creation and achieve climate and energy goals for their residents and stakeholders. Its concept is simple, and its results are clear, but now is the time to tune in if you haven’t heard about it.
Direct pay allows local governments and other tax-exempt organizations to receive federal tax credits as direct payments for investments in clean energy projects. It especially benefits smaller communities and nonprofits that don’t have the financial resources to initiate clean energy projects in their communities.
New resource to track direct pay projects
Several partners of GPI just launched a new tool to demonstrate the success and adoption of direct pay across the country.
Developed in partnership between Atlas Public Policy, Climate Mayors, C40, and the Urban Sustainability Directors Network (USDN), the new Local Government Direct Pay Tracker has initially added 111 projects coast-to-coast.
That’s just a start, as projects are actively being collected to be added to the resource. GPI is working with our local government partners to add several projects in Minnesota that we have supported.
GPI supports communities in leveraging direct pay
Many communities continue to be interested in taking advantage of direct pay. GPI is working to help communities to understand how to leverage the opportunity.
Last year, members of the Minnesota-based Community Energy Network, a peer learning network of local government staff co-facilitated by GPI and Clean Energy Resource Teams (CERTs), expressed interest in learning more about using direct pay.
At the beginning of 2024, we created a peer learning cohort that focuses on understanding how the opportunity can help communities pay for electric vehicles, electric vehicle infrastructure, and solar and geothermal projects. The cohort meets quarterly and is a great place for the members to receive critical training and share notes, resources, and best practices with one another.
Taking action on direct pay
Direct pay has been and remains a great option for community organizations and local governments to put their clean energy goals into action and generate important community benefits.
However, it is important to note that with the uncertainty at the federal level, the future of direct pay and a suite of clean energy tax credits could be at risk. In the coming weeks, we’ll be sharing examples of the projects we’ve supported in Minnesota to showcase the effectiveness of direct pay and how communities can make the most of it while they can.
If you’re inspired by those highlights or any projects you see in the new tracker, let us know if we can assist you with your direct pay application.
