Rebates tied to home energy efficiency, created by the Inflation Reduction Act, are set to begin flowing to consumers soon. The federal government has allocated $8.8 billion for Home Energy Rebates programs through states, territories, and tribes. The first application from New York was approved for an initial $158 million, with California, Texas, and Florida having the largest total funding allocations. The rebates, which can be worth up to $14,000 or more per household, aim to offset costs for efficiency upgrades such as electric heat pumps, insulation, and Energy Star-rated appliances.
The DOE expects the programs to save households $1 billion annually in energy costs due to increased efficiency. Eleven other states, including Arizona, Colorado, and Washington, have also applied for funding, with many more in the process. States must notify the Energy Department of their intent to participate by August 16, 2024, and applications are due by January 31, 2025. The funding is part of the IRA, which earmarked $369 billion for climate change policies, making it the largest climate legislation in U.S. history.
The IRA divided the rebate funding between two programs: the Home Efficiency Rebates program and the Home Electrification and Appliance Rebates program. Only four states have applied for both programs, with New York receiving approval for the latter. The Home Electrification and Appliance Rebates pay consumers for buying specific technologies and services, with a maximum amount available for each item. The program is aimed at reducing household energy use and emissions.
The Home Efficiency Rebates program is technology-neutral and rewards households based on the amount of energy saved through efficiency upgrades. Rebates are available to all households, regardless of income, although low-income earners can qualify for larger amounts. Consumers can potentially access both programs through existing state and local utility programs, and rebates are intended to be delivered at the point of sale.
Consumers cannot double dip with rebates, meaning they generally cannot apply the energy savings from one upgrade to qualify for rebates on another. However, they may be able to combine the rebates with other Inflation Reduction Act funding, such as tax breaks for home efficiency. The rebates are expected to help offset costs for homeowners and landlords looking to make their properties more energy-efficient, with the goal of saving money on energy bills and reducing greenhouse gas emissions.
