Why the Funding Position Changed
For years the federal solar credit was worthless to a school district, because a district owes no federal tax and a credit only offsets tax owed. Districts either went without or used a power purchase agreement and let a third party take the incentive.
Elective pay, commonly called direct pay, changed that. Eligible tax-exempt and governmental entities can now claim the Section 48E credit and receive its value as a payment from the IRS rather than as an offset.
For a district weighing a capital project, that is roughly a third of the cost returning — and it makes district ownership competitive with a PPA for the first time.
The 30% rate requires meeting federal prevailing-wage and apprenticeship rules, but facilities under 1 MW are exempt and receive it automatically. Every school array we have installed is well below that threshold. Federal tax rules changed in 2025 and 2026 and this page reflects the position as at August 2026. Nothing here is tax advice — we design and install the system and work alongside your accountant on how the credit applies to you.

