“It’s opened up several doors there,” he said, mentioning that a local credit union and groups like Goodwill have expressed interest in installing panels. “We’re presently working with six faith communities that are navigating [direct pay] and going through their feasibility and contracting processes for solar specifically.”
There’s also been an uptick in nonprofit installations statewide, according to data compiled by the North Carolina Sustainable Energy Association.
The association doesn’t monitor whether institutions access the direct-pay feature, and some recent arrays may be holdovers from the Duke rebate program, which ended in 2022. But the numbers are striking nonetheless: Since 2011, almost 150 houses of worship, local governments, and other entities that don’t pay taxes have erected solar arrays, nearly all on rooftops. Sixty-three, or 42%, did so in 2023 and 2024.
A ticking time bomb for clean energy tax credits
Now, Eley said, the groups he’s working with are especially motivated to act quickly.
“The idea of going solar has been something they have tossed around for a number of years,” he said. “We’re certainly reiterating to them if you’re going to make that investment, do so now.”
That’s because the massive budget bill passed last month by the House — dubbed the One Big Beautiful Bill Act in an homage to President Donald Trump — would make tax credits for solar and other renewable energy projects nearly unusable. The Senate is now considering whether to pass the measure as is or to make changes.
As the legislation stands now, projects would have to begin construction within 60 days of the bill’s passage to access the 30% tax credit. That’s an easier feat for a rooftop installation than a larger, ground-mounted affair, but still incredibly difficult for nonprofits, religious institutions, or local governments that tend to have lengthy decision-making processes and aren’t already planning to go solar.
While House lawmakers voted to make the underlying 30% tax credit virtually useless, they didn’t explicitly target the three related adjustments that helped enable the Second Harvest project: direct pay, the low-income community benefit, and the brownfield benefit.
“These cross-cutting provisions are part of the tax credit structure, but they are their own mechanisms,” said Rachel McCleery, the former senior adviser at the U.S. Department of the Treasury who led stakeholder engagement for the climate law’s implementation.
The survival of direct pay in the House measure stands in contrast to the elimination of its twin in the private sector, transferability, which allows smaller energy companies better access to incentives.
But direct pay means little if the baseline 30% tax credit is still hamstrung by the 60-day start-work requirement and the foreign-entity provision.
“This is backdoor repeal of the IRA,” said McCleery, who now advises clients on defending clean energy tax credits, “and it’s backdoor repeal of direct pay — because you can’t use direct pay if you don’t have an underlying tax credit.”
The same applies to the bonus incentives for low-income and brownfield communities. “These cross-cutting mechanisms can still be used,” McCleery said, “but if the underlying credit is moot, that essentially repeals the mechanisms.”
On the flipside, if the Senate restores the viability of the underlying 30% tax credit in its version of the bill, the mechanisms that aid nonprofits like food banks and houses of worship will also be accessible.
But advocates say that remains a big “if.” And there are other challenges: Slashes to the Internal Revenue Service workforce could delay payments to Second Harvest and others. And the group is bracing for the impact of the other budget cuts in the House bill as written, such as to food assistance and Medicaid.
“It’s just going to put pressure on people who are already under-resourced,” Bealle said. “And that has a ripple effect to every organization that supports under-resourced people, including us.”
Combs, the former solar sales professional who also volunteers with climate advocacy group North Carolina Interfaith Power and Light, called it a “tragic snowball.” She then brought up U.S. Sen. Thom Tillis, the North Carolina Republican who has consistently voiced disapproval of a full-scale repeal of the tax credits.
“Thank goodness Sen. Tillis has spoken out and been a leader on the importance of the Inflation Reduction Act incentives,” Combs said. “I am anxious to see how this plays out in the Senate.”
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