The Inflation Reduction Act (IRA) and Bipartisan Infrastructure Law (BIL) include the largest federal climate investments in U.S. history. This represents an unprecedented clean energy opportunity for U.S. local governments and their communities.

Alongside numerous grant opportunities, many of the IRA’s climate incentives operate as tax credits. Importantly, public and nonprofit organizations can directly access these credits through a new IRA mechanism called elective pay (or direct pay). For the first time ever, they can tap into a dozen different tax credits for solar, wind, electric vehicles (EVs) and more.

This will make clean energy and vehicle projects more cost-effective for communities. However, the organizations at the forefront of this transition may lack the capacity, resources and expertise to navigate new and complex financing structures. They may face challenges accessing and combining different grants, tax credits and other vehicles for accessing capital, such as the Greenhouse Gas Reduction Fund.

Through our research, partnerships, extensive network and technical expertise, WRI helps local governments, school districts, regional organizations, community-based organizations and other local leaders successfully access new funding and incentives under BIL and IRA. We create tools and resources to expand equitable access to federal funding. We also provide education on available opportunities and the economic case for investing in local clean energy and clean vehicle projects.

Ensuring the successful use of elective pay is an area of particular focus for our team. We are providing direct assistance to “early adopter” local governments and school districts as they file for elective pay. This includes walking them through the opportunities, process and documentation needed to successfully maximize incentives and claim elective pay tax credits for their clean energy projects.

WRI also amplifies tax credit wins and learnings to a wider network to help show the benefits of using IRA and BIL incentives. We host webinars, attend conferences, and run trainings and peer-learning cohorts to help local governments learn from leading peers. We also communicate lessons from our projects on the ground back to federal agencies, policymakers and academia to help identify barriers, improve processes and track progress.

Cover image by Jeroen van de Water / Unsplash