Elective (Direct) Pay Case Study
- Case Study
NOTE: The tax credit expires at the end of 2025.
Congress voted to repeal the 30% tax credit for solar. Contact your members of Congress and share your support for solar energy.
Harnessing the Power of Nonprofits to Deliver Low-Cost Solar to Low-Income Homeowners
Solar tax credits make solar more affordable. But too often, the families that need them the most can’t use them. This is changing. The Inflation Reduction Act (IRA) of 2022 created new ways for low-income families to go solar. It did so by enabling nonprofit organizations to use solar tax credits and pass the savings on to low-income families. In July 2025, Congress voted to repeal tax credits for solar.
While the credits for homeowners expire at the end of 2025, nonprofits and small businesses use the commercial tax credit. This has been the way benefits from these credits have been passed along to homeowners who do not have the tax burden to take the residential tax credits.. Systems using the commercial tax credits tax credit must be installed by the end of 2029 and follow certain rules about Foreign Entities of Concern requirements and when to start construction. IRS Elective Pay for nonprofits is still active. Your solar installer will be able to let you know if your system meets these requirements. Most of these requirements come into effect in 2026. If you have questions on accessing these tax credits, please contact our Solar Help Desk.
Solar United Neighbors worked with One Roof Community Housing on one such effort. The following case study describes how we used the new “Direct Pay” provisions in the IRA to overcome the challenges of financing and installing solar for low-income homeowners.
The case study is available as a PDF for download. We encourage you to share it with other organizations interested in learning from and participating in this model. We’re also sharing our templates for the following documents for others to use as well. Our goal is to create an open source guide for other nonprofits and groups interested in using these documents for their own projects.
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