Direct Pay

Direct Pay is a federal incentive that allows eligible tax exempt organizations to receive a cash refund from the IRS for the value of federal clean energy tax credits, including the Investment Tax Credit for solar and battery projects. Instead of applying the credit against tax liability, the organization receives a payment equal to the credit amount after the project is placed in service and the required documentation is submitted.Entities such as school districts, cities, counties, water authorities, nonprofits, tribal governments, and other tax exempt groups can use Direct Pay to reduce the cost of solar without needing a tax appetite or entering into complex financing structures.For many public and nonprofit organizations in Texas, Direct Pay is the most accessible way to capture the full financial benefit of commercial solar and storage projects.