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Direct Pay for & 25D Residential Energy Efficient Property Tax Credit
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Direct Pay: Opportunity for All

Join more than 300 environmental justice advocates, environmental groups, and renewable energy companies in demanding Congress offer a direct pay option for the residential energy efficiency property tax credit (Section 25D) – ensuring equitable access to residential clean energy resources.

CALL YOUR SENATORS AND REPRESENTATIVES
> Let them know you want to see a direct pay option for the residential energy efficiency property tax credit (Section 25D) <

SIGN THE LETTER TO CONGRESS
> Direct Pay for 25D Residential Energy Efficient Property Tax Credit < 

While the Investment Tax Credit (ITC) is the primary federal incentive for the deployment of renewable energy to residential and commercial customers, the credit’s current structure exacerbates existing economic, social, and health inequity between low- to moderate- income homeowners and higher earning Americans.  

Lower-income households are less likely to owe sufficient federal taxes to reap the full value of the ITC for residential clean energy purchases, deeply undermining its effectiveness.  

A direct pay option for Section 25D residential customers will enable disadvantaged communities and lower-income households – who spend a disproportionate amount of their income on energy and are the most vulnerable to the effects of climate change and environmental injustice – to access the economic and health benefits of clean energy. 

A direct pay option for Section 25D puts main street Americans on equal footing with their higher-income and corporate counterparts, while driving down U.S. greenhouse gas emissions. Now is the time for Congress to act. 

Direct pay for Section 25D homeowners will: 

  • Allow LMI families to receive their entire subsidy in a single year, freeing up the capital to purchase renewable energy systems. 
  • Increase energy independence and expand rooftop solar in an under-served and under-represented market. 
  • Guarantee lower and more reliable electric bills for families that need it the most. 
  • Create local jobs in a high-demand industry. 
  • Advance the President’s Justice40 agenda by broadening ownership of residential renewable energy systems. 
  • Mitigate catastrophic climate change impacts.

You can help make this happen in just 3 Easy Steps:

  1. Join the movement for equitable clean energy access.
  2. Click here to find and contact your elected representatives.
  3. Call your Congressman and Senators and tell them you want to see section 25D direct pay or refundability. 

Resources:

An independent report recently released by  RAND  found that inequities with the current residential tax credit could be addressed by making the residential ITC direct pay. 

Additional Resources: 

Building Back Better: A Roadmap to Expand Solar Access for All  

The National Impact of 30 Million Solar Homes: A Vision for an Equitable Economic Recovery Built on Climate Protection and Energy Democracy 

The Principles of Environmental Justice (EJ)

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“As the clean energy transition continues to build momentum, we cannot afford to leave anyone behind,” said Mustafa Santiago Ali, Vice President of Environmental Justice, Climate, and Community Revitalization for the National Wildlife Federation. “Making it easier for LMI households to access clean energy incentives will help families save on their energy bills, own their own power, build wealth, and participate in the urgent effort to decarbonize the U.S. economy.”

“The fight for environmental justice has many fronts. Making the residential clean energy tax credit refundable or direct pay is one of them,” said Denise Abdul Rahman, National NAACP, Field Organizer, Environmental and Climate Justice. “We are calling on Congress to address inequities in the federal incentive program that are preventing too many of our families from recognizing the benefits of clean energy.”

The inequities created by the ITC could be ameliorated by reverting to an expired version of the ITC, specifically the refundable solar tax credit (also called direct pay). – RAND, Incentivizing Solar

“Many families will only fall further behind without access to clean energy options that benefit their health and their homes,” said Nicole W. Sitaraman, Policy Chair and VP Strategic Engagement, Black Owners of Solar Services (BOSS). “Given the state of the climate crisis, expanding access to residential clean energy solutions through equitable tax incentives will enable the rapid deployment of solar we need to protect many of our nation’s most vulnerable communities.”

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