The Inflation Reduction Act includes Direct Pay tax credits that has the potential to bring nearly unlimited funding for clean energy projects into the communities who need them most. Direct Pay tax credits will radically expand publicly-owned energy, support communities transitioning away from polluting energy sources, generate affordable—and potentially free—electricity, and create good jobs for local communities.

This guide is designed to help state lawmakers seize this historic opportunity for their communities through:

  1. Community education and outreach: State legislators are trusted messengers who can spread the word about this opportunity to local governments, community organizations, and other eligible entities within their state.
  2. Implementation: State legislators can ensure that the state government enthusiastically implements the IRA and secures Direct Pay funding for their state by implementing eligible projects across all levels of state government.
  3. Funding and policy making: State legislators can help other eligible entities like local governments and nonprofits implement Direct Pay projects by providing matching funds, creating revolving funds or low/ no-interest loans, creating technical assistance programs, and building in policy incentives to increase equity and protect workers within Direct Pay programs in the state.