Federal Funding for Energy Work at Houses of Worship
The Inflation Reduction Act (IRA) that was signed into law in August 2022 included the greatest investment in climate care provisions in history.
The climate investments in the IRA are historic and are imperative in addressing the urgent moral issue of climate justice. The new law puts the nation on the path to cut greenhouse gas emissions up to 44% by 2030, while saving thousands of lives, creating millions of good-paying clean energy jobs, investing in environmental justice, and reducing energy bills for working families across the country.
Included in the IRA, are clean energy tax credits for wind and solar, EVs, efficiency upgrades, heat pumps, and much more for nonprofits.
With the passage of the IRA, nonprofits and houses of worship now have easier access to clean energy funds and tax credits through a program called “direct pay.” Before the IRA, only homeowners and commercial entities with some tax liability could claim tax credits when installing solar panels, wind turbines, or other eligible technologies on an eligible property. Now, the “direct pay” option means non-taxable entities can also benefit from these credits.
The bipartisan Infrastructure Investment and Jobs Act (IIJA) signed into law in November 2021 also provided some investments to reduce greenhouse gas emissions and increase resilience to climate impacts.
The IIJA provides the Department of Energy with $50 million over five years for a new program, the Renew America’s Nonprofits program. This program will provide grants of up to $200,000 to nonprofits to improve the energy efficiency of their facilities.
As people of faith and conscience, this is our opportunity to help bring about a just transition to a clean energy economy based on the values we all share: caring for one another and for our Sacred Earth.
Faith communities can leverage these new or expanded federal programs for energy and resiliency improvements.
Are you Applying for These Federal Programs?
Tell us about it! Submit your story here. We’ll use your story to help inspire other houses of worship to follow your lead and to report back to Congress about the importance of these programs. You don’t need to have a completed project to share your story, we want to know what you’re planning and have in the process.
Information About Federal Energy Grant and Tax Credits Opportunities
Federal agencies are still in the process of developing the guidance and programs created or expanded by the IRA and IIJA. Here are a few resources that may be useful:
- This faith community resource spreadsheet can help you identify federal grant and tax credit opportunities that are available and will be kept up to date as new program guidance becomes available.
- Environmental and Energy Study Institute Energy Efficiency for Nonprofits page
- Check IPL’s new Congregational Solar Resource page to learn about financing, finding an installer and more.
- Federal solar tax credits for nonprofits from the Federal Office of Energy Efficiency & Renewables, updated April 2023
- Direct Pay guidance from the White House
- IPL FAQ on Direct Pay – IPL created this FAQ based on questions houses of worship asked DOE. We asked DOE to answer them.
- FAQs on Direct Pay and Transferability from the IRS
- More on Direct Pay from a law firm. Please contact tax experts in your own state for the best information.
- Center for Public Enterprise new walkthrough of the IRS Elective Pay / Transferability pre-registration portal
- Environmental Protection Network technical assistance
- Interfaith resource website for houses of worship
Preparing to Apply for Federal Grants and Tax Credits
Federal program details and tax guidance are still being developed. Until then, there are a few things you can do to help prepare.
- Benchmark your buildings – line up 12 months of utility bills, find out the construction date of your building, track occupancy rates, and use IPL’s Cool Congregations Calculator to learn more about your congregation’s carbon footprint.
- Learn what other sources of funding you can leverage to go along with the federal funding – state, local, and utility. Research your own denomination’s sources for funding for building improvements, for instance, the United Church of Christ Cornerstone Fund serves all congregations even if they are not UCC.
So plan ahead to take advantage of “direct pay” and be part of creating thriving, healthy, and sustainable communities.
IPL and our partners are hosting briefings that provide updates on these federal programs, how congregations can use them, and how to apply. Make sure you’re on our email list to receive the event notifications or check back on our events page. Here are recordings of the previous webinars:
Renew America’s Nonprofits Grant
Thank you to everyone who submitted a survey response for this funding opportunity. IPL was not selected as a prime recipient for the Department of Energy’s (DOE) Renew America’s Nonprofits grant, but we encourage you to contact awardees in your geographical region in regards to participating as a sub-recipient under their funding.
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