Expanding Clean Power with IRA Direct Pay Program

The Impact of IRA Direct Pay Program on Clean Power Expansion

Introduction

In 2022, the U.S. Inflation Reduction Act (IRA) introduced a new program aimed at promoting clean power initiatives. This program allows non-taxable entities like municipalities, schools, churches, and non-profit organizations to receive direct federal funding for up to 70% of the cost of new solar power installations.

Expanding clean energy

Since the launch of the Direct Pay program in 2024 by the Department of Treasury, several communities in Southern California, including South Pasadena and the City of Orange, have witnessed an expansion in clean power generation.

Eligibility Expansion

Prior to the IRA, federal support for clean power was limited to tax credits for individuals and businesses. The Direct Pay program broadens this support to include a wider range of non-taxable entities, opening up new opportunities for clean energy projects.

Impact on Schools and Municipalities

Municipalities and schools, such as the South Pasadena Unified School District, are taking advantage of Direct Pay to install solar power systems, with the program covering a significant portion of the installation costs. This initiative is expected to provide clean energy for a large percentage of the school buildings’ power needs.

Support for Non-Profit Organizations

Non-profit organizations like the Congregation B’nai Israel in Tustin are also benefiting from the Direct Pay program. By utilizing this funding opportunity, they have successfully installed solar arrays, reducing their reliance on traditional energy sources.

Benefits for Affordable Housing Communities

In affordable housing communities like The Knolls in the City of Orange, clean power initiatives funded through the IRA are making a difference. The Foundation for Affordable Housing has installed solar panels, leading to significant electricity savings for households in the area.

Future Prospects

The Direct Pay program established by the IRA is paving the way for increased greenhouse gas reductions and energy savings across various non-taxable entities. With more organizations expected to take advantage of this program in the coming months and years, the future of clean power expansion looks promising.

David Tewksbury is an Angeles Chapter office volunteer and a leader with the Sierra Club’s Inflation Reduction Act community advocacy

Read More of this Story at angeles.sierraclub.org – 2024-03-29 19:10:00

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