Energy and infrastructure projects often exceed what a single funding source can cover. Stacking resources—also referred to as braiding or blending—means combining multiple funding and financing tools to support one project.
Public agencies, private investors, and philanthropic partners often look for projects that demonstrate diversified funding. Leveraging resources refers to incorporating additional cash or in-kind contributions that strengthen a project’s overall financial structure and reduce reliance on a single funding source.
What Counts as Leveraged Resources?
Many federal grants require leveraged resources, often in the form of a cash match or cost share. In-kind resources may also count as leverage (though not always toward formal cost-share requirements) and can include staff time, technical assistance, pro bono services, equipment use, or other partner contributions.
While federal funding may sometimes be combined with other federal sources, most programs restrict using one federal award to directly match another. Always review program rules carefully.
Integrating Tax Credits and Other Incentives
In addition to grants and loans, tax credits and other incentives may strengthen your overall financing strategy. For tax-exempt entities, mechanisms such as Direct Pay can allow eligible projects to capture the value of certain federal tax credits. For example, a city applying for a battery storage planning grant may flag in its application that it intends to leverage the Clean Energy Investment Credit during project construction. Projects may also qualify for bonus credits (e.g., domestic content or energy communities), and in some cases tax credit transferability may be relevant when partnering with private entities.
Beyond federal incentives, cities should also evaluate state programs, utility incentives, green banks, low-interest loan programs, and local revenue sources when structuring project financing. Examples may include Opportunity Zones, Enterprise Zones, historic preservation tax credits, low-interest loan programs for municipal energy projects. These examples are illustrative and may vary by jurisdiction and funding cycle.
It is important to account for timing: many tax credits and reimbursable grants are received after a project is placed in service. Interim financing may be necessary to cover upfront costs.
When in Doubt, Think Expansively
Whether required by a grant or not, stacking resources strengthens the overall financial structure of your project. A diversified funding approach supports your project’s long-term financial viability and reduces reliance on any single funding source.