One of the signature achievements of the Biden administration was the Inflation Reduction Act (IRA), which was signed into law in August 2022, and is estimated to include nearly $280 billion in clean energy tax incentives. The IRA made history as the largest-ever U.S. investment in climate action. The Direct Pay tax credit provisions of the IRA pose a historic opportunity for nearly unlimited federal funding for community-owned clean energy projects nationwide. 

The Congressional Progressive Caucus Center (CPC Center) is an independent 501c3 nonprofit that identifies and builds solidarity around policies that foster a more just, equitable, and resilient nation. We demystify government so that every community is empowered to fight for change that will allow all of us to thrive. The CPC Center and a network of national partners, elected champions, unions, and state and local organizers have spent the last two years working to implement the IRA, with a special focus on the Direct Pay clean energy tax credits. We work to ensure that these tax credits - and all the clean energy programs in the IRA - are implemented in a way that maximizes economic, racial, and environmental justice. We provide the analysis, training, resources, and tools that local champions and community organizers need to benefit from Direct Pay and the clean energy transition.

What began as educating our partners about Direct Pay has grown to a community of hundreds of eligible entities, elected champions, and advocates. Beyond public education, the CPC Center published practical tools to help eligible entities and advocates leverage Direct Pay and provided direct technical assistance to over 100 eligible entities and grassroots advocates. 

In September 2024, the CPC Center partnered with BuildUS and Organized Power in Numbers to host an in-person national convening, “Powering Local Communities,” in Phoenix, Arizona. Organized Power in Numbers is a multiracial and multigenerational movement dedicated to creating an economy and society that respects all working people, their families, and their communities which is organizing worker-focused campaigns around IRA implementation across the South and Southwest. The convening’s goal was to gather insights and best practices from the first ground-breaking projects leveraging Direct Pay to provide a roadmap for implementation that maximizes justice and equity. We brought together the leading organizations, elected champions, policymakers, funders, and organizers fighting to ensure that IRA implementation is just and equitable. 

Together, we are working to seize this opportunity to radically expand publicly owned clean energy generation, invest in communities affected by pollution, lower energy costs, and create good jobs for local communities. 

These cutting-edge projects have lessons to share with all of the projects that will follow in their footsteps:

• Invest in Organizing: Investing in community organizing and building a strong base of engaged grassroots leaders is critical for project success.  Simply sharing information about federal incentives is not enough to ensure that projects are built. It takes organized people pushing for the solutions their communities need. 

• Center Worker Power and Racial Justice: Achieving worker power and racial justice requires communities that bear the greatest burden of environmental injustice, including workers, to be centered throughout the process. Workers must be consulted, and not just on narrow workplace issues, but also on where and how to build renewable energy projects in a way that addresses wider community needs. 

• Tell Your Story: Telling the story of our successes is critical to inspiring future projects, maximizing their impact, and protecting these tools. 

• Invest in Long-Term Technical Assistance: Eligible entities need comprehensive, long-term support to succeed, not quick interventions. These projects are complex and can be slow moving and eligible entities face many barriers to success. Our support must be similarly comprehensive if we are going to succeed. This includes long-term technical assistance for planning, financing, and filing. Early stage pre-development and working capital is needed for these projects to take advantage of federal incentives and access the scale of capital needed.

• We Need to Bundle Projects Together: Bundling projects together will be critical for our success. It is easier to finance bundles of projects and easier to provide the deep technical assistance needed if smaller projects are grouped together. 

• Local and State-Elected Champions Matter: When local leaders lean in, a world of possibilities opens up. This includes cities and states building their own eligible projects as well as creating essential supports like spreading the word about this opportunity, funding technical assistance, providing up-front financing with green banks and revolving loan funds, and more. 

In the two years since the passage of the IRA, we’ve seen the enormous potential of the Direct Pay tax credits. Now more than ever, we need to apply these critical lessons and seize this opportunity. Together, we must:

• Lift up the project models that maximize equity and justice;

• Continue to invest in organizing and technical assistance;

• Build out a pipeline to bundle projects together;

• Build worker and community power; and

• Elevate grassroots storytellers.

We hope this report will help guide the next wave of transformative renewable energy projects by sharing key lessons and insights from the first groundbreaking projects made possible by the Inflation Reduction Act. This report reflects insights gathered from our work and from the organizations on the leading edge of the fight for cleaner air, better jobs, lower energy bills, and an equitable clean energy future that will help ensure our communities not only survive the climate crisis but ultimately thrive. 

Now is the time to redouble our efforts to facilitate the effective, equitable deployment of Direct Pay energy projects. Accelerating the implementation of Direct Pay projects is critical for demonstrating the importance and impact of these tax credits and helping to preserve them. We must also maximize Direct Pay's potential to expand clean energy and build community-owned and controlled assets. If we can meet the uncertainty of this moment armed with success stories and undeniable evidence of community benefits, we can show the benefits of federal investments and tax credits and the full power of an equitable clean energy transition. If we can meet the challenge of this moment armed with success stories and undeniable evidence of community benefits, we can show that community-owned clean energy and good green jobs are here to stay.

This report emerged from the discussions and insights shared at the “Powering Local Communities convening in Phoenix, Arizona co-hosted by the Congressional Progressive Caucus Center and Organized Power in Numbers. This convening was a true partnership. Thank you to our co-hosts, partners, and speakers for being a part of this convening:

• José Javier Rodriguez, Assistant Secretary, U.S. Department of Labor

• Laurel Blatchford, Chief Implementation Officer, U.S. Department of the Treasury

• Raquel Teran, Former Minority Leader, Arizona State Senate

• Mandela Barnes, Former Lieutenant Governor of Wisconsin

• Jivan Sobrinho-Wheeler, Councilmember, City of Cambridge

• Neidi Dominguez Zamorano and Rosemarie Molina, Organized Power in Numbers

• Jillian Blanchard, Kelly McRae, Nestor Perez, and AC Meyer, Lawyers for Good Government

• Kaniela Ing, Green New Deal Network

• Sophia Cheng, People’s Action

• Joseph McNeil Jr., SAGE Development Authority

• Esther Baldwin, Bastion Firm

• Jose Flores, Comite Civico del Valle

• Tara Houska, Giniw Collective

• Ana Fuentes, Amanecer People’s Project

• Dr. J. Phillip Thompson, Emerald Cities

• Collaborative and MIT Department of Urban Studies and Planning

• Joseph Madden, J.C. Madden, LLC and Harris County

• Teto Huezo, Jobs to Move America

• Yong Jung Cho, Building Power Resource Center

• Amy Vruno, Invest in Our Future

• Gary Kiser, Emmanuel Lutheran Church

• Adrian Keller, Solar United Neighbors

• Carrie Santoro, Pennsylvania Stands Up

• Peter Hasegawa, MLK Labor Council

• Emma Bouton, Resource Rural

• Sarah Bernal, ReVolv

• Chirag Lala, Center for Public Enterprise

• Melanie Reyes, Ironbound Community Corporation

• Jonathan Klein, Undaunted K-12

• Jessica LaBarbera, Nonprofit Finance Fund

• Nenha Young, Coalition for Green Capital

• Christina Hollenback, Justice Capital

We want to share a special thank you to our local partners who drive this work every day and without whom, this convening would not have been possible: CHISPA Arizona; Living United for Change in Arizona (LUCHA); Rural Arizona Engagement (RAZE); and Local First Arizona.

Executive Summary

Introduction

1. What is Direct Pay?

2. Turning Legislation into Real Change for Communities

3. Powering Local Communities: A National Convening on Direct Pay

Lessons Learned

1. Investing in Community Organizing is Critical

2. Worker Power and Racial Justice Must Be At the Center

• Prioritization of and Leadership from Communities Who Bear the Greatest Burdens

• Community and Worker Involvement at Every Stage

• Benefits Meet Wider Community Needs

• Community Ownership

3. We Must Tell Stories of Direct Pay’s Successes

4. Eligible Entities Need Comprehensive, Long-Term Support to Overcome Obstacles

5. Bundling Projects Amplifies Power

• How do I know if bundling is right for my project?

• The Benefits of Bundling

6. Local and State Champions Matter

The Path Forward: Recommendations and Next Steps

1. Five Most Important Next Steps

Appendices

1. Building Justice into Clean Energy Policy: A Checklist for Policy Makers, Organizers, and Advocates

2. A Roadmap for Direct Pay Project Success

3. IRA and Direct Pay Resource List

4. I Have More Questions, Who Can I Call?