We know the public sector operates under strict procurement, budget, and performance requirements. Our team is experienced in aligning tax incentive strategies with performance contracts, capital projects, and federal funding timelines. From energy savings performance contracts (ESPCs) to capital improvements, we help you structure incentives properly—so nothing is left on the table.
At Walker Blue, we ensure your energy and infrastructure projects meet the technical and compliance requirements to secure the full benefit of these programs, while supporting your objectives and budget.
What is Direct Pay?
Direct Pay
Direct Pay (also known as Elective Pay) is a provision of the Inflation Reduction Act (IRA) that allows tax-exempt and government-owned entities to receive the full value of certain tax credits as a cash payment from the IRS, even if they have no tax liability.
This means that public agencies, nonprofits, and other exempt organizations can treat the credit as a grant, dramatically improving the financial viability of clean energy and infrastructure projects.
Eligible Organizations for Direct Pay Include:
- Nonprofit organizations (501(c)(3), etc.)
- States (including DC), counties, cities, and other political subdivisions such as school districts.
- Indian Tribal governments, political subdivision thereof, or any agency or instrumentality of a Tribal government.
- Alaska Native Corporations, the Tennessee Valley Authority, rural electric cooperatives
Why It Matters
In the past, tax-exempt entities couldn’t benefit directly from federal tax credits like the Investment Tax Credit (ITC) for solar, geothermal, or battery storage systems. That changed with the IRA. Now, if your organization installs a qualifying energy system, you can:
- Claim the ITC, just like a for-profit entity would
- Elect Direct Pay to receive the credit amount as a cash reimbursement from the IRS
- Stack additional bonuses (e.g., for domestic content or prevailing wage) to increase the total credit value—potentially up to 50% or more of project costs
We provide the following services to tax-exempt and government clients:
- §179D Deduction Allocation Support
- Section 45L Certifications for student housing and residential facilities
- Investment Tax Credit (ITC) Certifications for:
- Solar Energy
- Geothermal Systems
- Battery Storage
- EV Chargers
- Combined Heat & Power (CHP) Systems
- Other qualifying clean energy systems
- Direct Pay Eligibility Support
- Prevailing Wage & Apprenticeship (PWA) Compliance
- Domestic Content Certification for bonus credit eligibility
- Energy Audits/Assessments
- Strategic guidance on leveraging ESCO partnerships for public infrastructure improvements
Learn more about how we can help you maximize available funding, reduce long-term operating costs, and meet your energy and sustainability goals.
Let us help you turn your tax-exempt status into a strategic advantage as you embark on your energy-efficient retrofit or new construction.
Here’s what you can expect when working with us:
In-house Team
Accuracy & Efficiency
Collaborative Partnerships
Client-Centered Approach
