1. IMAGE: FLICKR/MICHAEL MULLER
Maximizing Clean Energy
Opportunities in the
Inflation Reduction Act:
A Roadmap for Local Governments
September 19, 2023

2. AGENDA
• Introductory remarks
• Overview of IRA Roadmap
• Q+A with Roadmap authors
• Local government panel

3. PROJECT OVERVIEW
• WRI has developed a forthcoming IRA Roadmap for local governments, intended as a
handbook to help local governments capitalize on IRA clean energy tax credit provisions,
including elective pay, as well as other loan and grant opportunities.
• The IRA Roadmap outlines strategies for local governments to leverage IRA opportunities for
clean energy deployment that advance decarbonization and equity goals.
• WRI expects to publish the IRA Roadmap in late September.
The project team would like to thank Bloomberg Philanthropies and the Local Infrastructure Hub
for their generous support to make the IRA Roadmap possible.

4. SPEAKERS
Ryan Whalen
Senior Advisor, Government
Innovation
Bloomberg Philanthropies
Michael Forrester
Assistant Director of Partnerships
DOE Office of State and
Community Energy Programs
Alex Dane
Senior Manager, Clean Energy
Innovation & Partnerships
WRI
Katrina McLaughlin
Clean Energy Associate
WRI
Ian Goldsmith
U.S. Energy
Research Analyst
WRI
Jared Policicchio
Deputy Chief
Sustainability Officer
City of Chicago, IL
Kate Johnson
Head of US
Federal Affairs
C40 Cities
Jenny Hernandez
Sustainability Specialist
City of Las Cruces, NM

5. INTRODUCTORY
REMARKS

6. OVERVIEW OF
IRA ROADMAP

7. DISCLAIMER
This material has been prepared for informational purposes only and is not intended to
provide and should not be relied on for tax, accounting, or legal advice.
Although every effort has been made to provide complete and accurate information, the Local
Infrastructure Hub and World Resources Institute make no warranties, express or implied, as to
the accuracy of this summary and assume no liability for its use. This material summarizes
proposed federal guidance on specific statutory provisions and may be superseded by the
release of final guidance or subsequent legal interpretation. The views and opinions expressed
herein do not necessarily state or reflect those of the Internal Revenue Service or the U.S.
government. Interested parties should consult a qualified tax adviser about the potential
application of tax provisions to their specific circumstances.

8. IRA ROADMAP – KEY ELEMENTS
Fundamentals of IRA
tax credits
Key takeaways for
local governments
Case Study: 100 kW
solar on multifamily
affordable housing in
Milwaukee, WI
Roles and strategies
for local
governments

9. FUNDAMENTALS OF
IRA TAX CREDITS

10. THE IRA INVESTS $400 BILLION IN CLIMATE AND
CLEAN ENERGY SPENDING
Source: Congressional Budget Office. 2022. Summary Estimated Budgetary Effects of
H.R. 5376, the Inflation Reduction Act of 2022.

11. 12 TAX CREDITS ELIGIBLE FOR ELECTIVE PAY
Source: IRS Publication 5817-G (June 2023) Clean Energy Tax Incentives: Elective Pay
Eligible Tax Credits
Clean Energy Generation
• Investment Tax Credit (ITC)
(§48) (through 2024)
• Clean Electricity ITC (§48E)
(beginning 2025)
• Production Tax Credit
(PTC) (§45) (through 2024)
• Clean Electricity PTC
(§45Y) (beginning 2025)
• Zero-Emission Nuclear
Power Production Tax Credit
(§45U)
Vehicles and Fuels
• Alternative Fuel Vehicle
Refueling Property Credit
(§30C)
• Credit for Qualified
Commercial Clean
Vehicles (§45W)
• Clean Fuel Production Credit
(§45Z)(beginning 2025)
• Clean Hydrogen Production
Tax Credit (§45V)*
Industrial
• Credit for Carbon Oxide
Sequestration (§45Q)*
• Advanced Manufacturing
Production Credit (§45X)*
• Advanced Energy Project
Credit (§48C)

12. THE ITC AND PTC ARE THE MOST RELEVANT TAX
CREDITS FOR CLEAN ENERGY
The ITC and PTC are longstanding tax credits that incentivize clean energy development.
The IRA made significant changes expanding technology eligibility (technology-neutral credits
beginning in 2025) and extending lifetime of these credits.
Investment Tax Credit (ITC)
• Introduced in 1978
• Based on a percentage of eligible
cost for a project
• Claimed and received once when a
project is placed in service
• As of 2023, equal to 30% of the total
eligible costs of a project if certain
labor requirements are met
• Covers energy storage as of 2023
Production Tax Credit (PTC)
• Introduced in 1992
• Based on the amount of energy
produced and sold by a system in a
year
• Can be claimed every year for the
first ten years of a system's life
• As of 2023, equal to 2.75 cents per
kilowatt-hour (kWh)
• Does not cover energy storage

13. ITC AND PTC USE BASE + BONUS STRUCTURE
Prevailing wage and apprenticeship
• Labor standards based on prevailing wages in area
• Projects less than 1 MW-ac automatically receive
Domestic content
• Domestic production requirements for steel, iron, and manufactured products
• Phaseout for elective pay eligible entities – in 2026, receive 0% of credit if not met
• Projects less than 1 MW-ac exempted, and Treasury developing exception process
Energy communities
• Three categories of qualifying communities – brownfields, statistical areas based on
historical fossil fuel activity and unemployment, coal mine or power plant closures
Low-income communities
• Capped program that requires application
• Four categories of eligible communities and specific project requirements

14. BONUS CREDITS CAN ADD SIGNIFICANT VALUE

15. NEW CREDIT MONETIZATION MEASURES EXPAND
ACCESS TO TAX CREDITS
Source: IR-2023-116, IRS releases guidance on elective payments and transfers of certain credits under the
Inflation Reduction Act (June 14, 2023)
Elective pay
• Available to select tax-exempt and governmental entities
• Receive direct payment from Treasury rather than reduction of federal tax liability
Transferability
• Allows other entities to sell their credit to a third-party buyer
• Elective pay entities cannot directly engage in transferability

16. KEY TAKEAWAYS FOR
LOCAL GOVERNMENTS

17. TAKEAWAY 1: ELECTIVE PAY HAS SIGNIFICANT IMPACTS
ON ENERGY DEVELOPMENT
Elective pay expands access to a
suite of tax credits covering
energy generation, electric vehicles
and charging, and manufacturing
and industry.
Elective pay allows for direct ownership of
eligible infrastructure and offers new clean
energy financing methods.
Elective pay gives local government actors greater
project development options and leverage in
procurement.

18. TAKEAWAY 2: ITC HAS KEY BENEFITS OVER PTC
Administrative advantages since
ITC is received as one-time
payment, does not require annual
filings with IRS.
Based on project costs rather than annual
generation, making it easier to account for in
budgeting processes.
May offer better value proposition for the types of
projects that local governments are more likely to
pursue. ITC may offer greater value for smaller projects and
projects which use bonus credits. And ITC covers energy
storage.
**Project-dependent, should not be interpreted as strict rule or tax advice**

19. TAKEAWAY 3: BONUS CREDITS CAN ENHANCE EQUITY AND
SAVINGS BUT REQUIRE PLANNING
• Bonus credits can align well with other
local government objectives and
authorities
• Specific planning and documentation
requirements
– Energy communitiy maps will be updated annually
– Low-income communities bonus credit program
operates differently – capped, requires application
• Smaller projects (<1 MW-ac) automatically
qualify for prevailing wage and
apprenticeship bonus and domestic
content requirements
Image: IRA Bonus Mapper (Beta)

20. TAKEAWAY 4: STACKING CAN IMPROVE PROJECT ECONOMICS
AND STRETCH EXISTING FUNDS FURTHER
• Tax-exempt grants and forgivable loans do not reduce the basis for tax credit
• Tax-exempt bonds do reduce the basis for tax credit (up to 15%)
City A is pursuing a $100,000
solar installation on a municipal
rooftop building
• Receive $60,000 loan from state
revolving loan fund
• 30% ITC is based on full $100,000
cost of project
=> Receive $30k tax credit
• $10,000 final cost to city
Note: Grant and loan programs may have own stacking restrictions; check program guidance.

21. TAKEAWAY 5: LOCAL GOVERNMENTS NEED TO PLAN FOR
FILING PROCESS AND PAYMENT TIMELINE
• Tax credits are not grants
– (+) not applying to capped program – if meet
requirements, will receive payment
– (-) logistical challenges and coordination
across legal and finance departments
• Payment will come after project has been
completed - need to plan for initial funding
and financing
• Tax filing date based on accounting year
– FY Jan. 1 – Dec. 31 => May 15
– FY Jul. 1 – Jun. 30 => Nov. 15
– FY Oct. 1 – Sep. 30 => Feb. 15
Spring 2024
Place project into
service
Summer 2024
Pre-filing
registration with
IRS
Fall 2024
Receive
registration number
from IRS
April 2025
File tax return and
required
documents (e.g.
Form 990-T) using
registration
number
June 2025
Receive direct
payment
Note: Illustrative timeline for an entity with a calendar year accounting period.

22. CASE STUDY:
100 KW OF SOLAR IN
WISCONSIN

23. CASE STUDY: 100 KW IN MILWAUKEE, WISCONSIN
• In 2024, a non-profit housing developer in
Milwaukee, Wisconsin decides to add a 100-kW
solar array to an affordable housing project. It is
interested in explore whether to own the project
directly and use elective pay or attempt to enter
a third-party solar PPA.
• The housing developer is also exploring pairing
the 100- kW solar installation with lithium-ion
battery storage to provide demand charge
savings and resilience benefits.
• To evaluate the economic potential of both solar
and solar plus storage options, the
housing developer calculates the total costs,
tax credit values, and lifetime value for each
option.
Image: Milwaukee Habitat for Humanity, “Habitat Goes Solar.” https://milwaukeehabitat.org/habitat-goes-solar/

24. CASE STUDY: PROJECT COSTS AND BONUS CREDITS
*Solar costs estimated based on Lawrence Berkeley National Laboratory's 2022 Tracking the Sun Report, at cost of $2.14/W forsmall non-residential solar installations.
Storage costs estimated based on National Renewable Energy Laboratory's 2023 Annual Technology Baseline for commercial storage projects.
Description
Tax Credit
Adjustments
Received? 100 kW Solar
100 kW Solar + 113
kWh/ 20 kW Li-Ion
Battery Storage
Initial Project Costs $214,000* $246,895*
Bonus Credits and
Tax Credit
Adjustments
Prevailing wage and
apprenticeship
requirements
Yes $64,200 $74,060
Domestic content bonus
credit
Exempt $0 $0
Energy community bonus
credit
No $0 $0
Low-income community
bonus credit
Yes $42,800 $49,373

25. CASE STUDY: PROJECT TAX CREDITS AND VALUE
**Net Present Value calculated using projected energy consumption data for a midrise apartment building in Milwaukee, WI from NREL's Commercial and Residential Hourly Load Profiles
for all TMY3 Locations in the United States database.
Description
Tax Credit
Adjustments
Received? 100 kW Solar
100 kW Solar + 113
kWh/ 20 kW Li-Ion
Battery Storage
Total value of credit $107,000 $123,447.50
Net cost of project
including credit
$107,000 $123,447.50
Net Present Value
for Modeled Midrise
Apartment Building*
$75,463 $31,814

26. CASE STUDY: PPA VS. ELECTIVE PAY
• While considering the resilience benefits of
the storage system, the housing developer
decides to evaluate the economic potential for
the solar-only option due to the higher net
present value.
• To determine which option to go with, the
housing developer calculates its indifference
point, or the point at which both direct and
third-party ownership are equally
economically valuable.
The housing developer receives an offer from a
local solar company for a third-party PPA price of
$0.074/kWh with a 1% year-over-year escalation
rate. Based on its calculated indifference point of
$0.068/kWh, the housing developer decides to
reject the PPA offer and pursue direct ownership
of the system using elective pay.
PPA Escalator
Rate
First Year PPA Indifference Point
($/kWh)
0% $0.07179
1% $0.06813
3% $0.06117

27. CASE STUDY: TAKEAWAYS
Elective pay can create greater
lifetime economic value for
projects compared to third-party
ownership structures, even for
smaller commercial projects.
Bonus credits can support
projects that directly benefit
community members and
intersect with other sectors,
such as affordable housing.
Elective pay and bonus credits
can facilitate project expansion.

28. ROLES AND
STRATEGIES FOR
LOCAL GOVERNMENTS

29. ROLES
FOR LOCAL
GOVERNMENT
Procurement
Lead: Advance
municipal clean
energy, workforce,
and equity goals
Project Host:
Leverage public
assets for
community-wide
benefit
Deal Facilitator:
Accelerate
community deals
and remove
deployment barriers
Strategist:
Develop a plan
for IRA
implementation
Place-Based
Expert: Engage
communities and
conduct data
analysis
Educator: Help
community
understand and
access IRA
funding
Communicator:
Track and share
community
benefits and
positive impacts

30. STRATEGIES FOR MAXIMIZING THE IRA FOR
MUNICIPAL OPERATIONS
Zero in on viable projects
• Economics, site viability, and access to funding
will make or break a project.
• Local governments can work to prioritize more
doable projects and take on a lower-risk portfolio.
Update project solicitation
processes
• Local governments can use their RFP and other
solicitation processes to make sure elective pay
and bonus credits are considered.
Determine project timelines to
leverage IRA opportunities
• Local governments will have to work grant, loan,
and tax credit timelines into their schedule
• For elective pay, timing when the tax credit is
received will be critical.

31. STRATEGIES FOR MAXIMIZING THE IRA FOR
MUNICIPAL OPERATIONS
Assess municipal energy consumption
• Local governments can collect energy consumption data
for their municipal operations to create an “energy
baseline” for their facilities.
• An energy baseline helps identify the municipal facilities
with the largest energy loads and prioritize projects.
Identify and pre-screen opportunities for
on-site clean energy at public facilities
• Creating a list of priority facilities will support
development of a broader clean energy project and
procurement strategy.
• Local governments also have an opportunity to consider
project goals, such as decreasing operating costs or
maximizing co-benefits.
Evaluate project economics using IRA
bonus credit opportunities
• Using mapping tools can help identify facilities qualifying
for various grant and tax credit benefits.
• Elective pay can lead to significant cost savings, and
should be evaluated early on in the scope of a project.
Identify project financing options
• Local governments should identify what project models
and financing sources are available.
• Both third-party and direct ownership are now viable
models, and require consideration.
• Emerging financing resources include the GGRF, Climate
Pollution Reduction Grants, CDFIs, and state Green
Banks.

32. STRATEGIES FOR MAXIMIZING THE IRA FOR
COMMUNITYWIDE CLEAN ENERGY
Provide real estate for clean energy
development
Local governments can leverage their
ownership of access to public assets to provide
necessary real estate for publicly and privately
owned projects.
Explore new approaches for purchasing
clean energy for the community
The IRA opens possibilities for new, innovative
third-party and direct ownership models that
benefit communities.
Accelerate community deals
Local governments can use their connections
and expertise to help elective pay eligible
entities in their community navigate new tax
credit rules. Additionally, they can bring
together transferability deal by connecting local
businesses together.
Remove deployment barriers
Removing unintentional barriers found in
zoning or permitting processes can be a key
strategy to encourage residents and
businesses to adopt clean energy.

33. STRATEGIES FOR MAXIMIZING THE IRA FOR
COMMUNITYWIDE CLEAN ENERGY
Identify opportunities to target projects within
the community
As place-based experts, local governments can
work to bring qualitative and quantitative data on
opportunities. They can also bring key
stakeholders and community partners to the table
during important prioritization discussions.
Help community members understand and
access IRA funding
Local governments can create and gather
resources to help their community understand
what IRA funding available to them, as well as
other information they need to a project happen.
Communicate the benefits and potential
savings to the community and peers
Advertising the benefits of new tax credits, grants,
and loans helps raise awareness and encourage
the use of these funding sources. It can also help
other communities learn from each other.

34. SUMMARY: THE SCALE OF THE IRA OPPORTUNITY
FOR LOCAL GOVERNMENTS IS MASSIVE
IRA can help local
governments accelerate
municipal and community-
wide adoption of clean energy
technologies.
IRA expanded the scope,
timeline, and potential value of
clean energy tax credits,
including the existing ITC and
PTC.
IRA uses a “base-and-bonus”
structure that can bring
tangible benefits to low-income
and historically disadvantaged
communities.
Elective pay is an entirely new
pathway for local governments
to directly realize the value of
12 clean energy tax credits as
cash payments.
Elective pay gives local
government actors greater
leverage in energy
procurement and changes
project economics.
Elective pay paves the way for
more local governments to
own clean energy assets.
Local governments can “stack”
federal grants and financing
programs with elective pay to
achieve significant cost
reductions and access
upfront capital for clean energy
projects.
Local governments can take
various roles including:
strategist, place-based expert,
educator, procurement lead,
project host, deal facilitator,
and communicator.

35. RESOURCES
• Catalyzing Local Clean Energy: A Roadmap for Maximizing IRA Opportunities and Community Benefits Guidebook (to be published this
month)
• IRA Bonus Mapper: A WRI open-access mapping tool that local governments can use to check eligibility for geographically bound IRA tax
credit opportunities as well as Justice 40 programs.
• Recent WRI Webinar Recordings:
How Cities Can Maximize Inflation Reduction Act Opportunities as Clean Energy Customers, Conveners & Catalysts: On July 25, 2023,
WRI conducted a webinar exploring how cities can take advantage of the IRA’s new economic landscape for clean energy, featuring
municipal panelists from leading cities.
Exploring New Guidance on IRA Tax Incentives for Clean Energy: On July 6, 2023, WRI hosted a webinar featuring experts in finance, law
and project development that discussed proposed federal guidance on elective pay and transferability, as well as IRA bonus tax credit
incentives.
• Federal Funding Opportunities for Local Decarbonization (FFOLD) Tool: An American Cities Climate Challenge Renewables Accelerator tool
developed by RMI and WRI to enable local governments to prioritize and leverage federal funding to advance system-wide energy transition
goals—from block grants and technical assistance to competitive grants and loans.
• Local Infrastructure Hub: A national program designed to connect cities and towns with the resources and expert advice they need to access
federal infrastructure funding to drive local progress and improve communities.
To assist communities in identifying and preparing competitive applications for federal infrastructure funding, the National League of Cities
(NLC) and the Local Infrastructure Hub are running a bootcamp series this fall. To learn more and register your city, visit the Bootcamp
Application.
• Report: Maximizing the Impact of Federal Climate Investments-The Unique Role of Cities: Climate Mayors, C40, and Urban Sustainability
Directors Network recently released a paper detailing how cities are key to meeting climate targets and the additional support needed to
optimize new federal funding opportunities.

36. AUDIENCE POLL

37. CITY PANEL

38. PANELISTS
Jared Policicchio
Deputy Chief Sustainability Officer
City of Chicago, IL
Kate Johnson
Head of US Federal Affairs
C40 Cities
Jenny Hernandez
Sustainability Specialist
City of Las Cruces, NM