The Inflation Reduction Act is set to provide nearly $9 billion in federal Home Energy Rebates to help American households improve energy efficiency, upgrade to electric appliances, and reduce toxic indoor air pollution. A diverse group of twelve states, both Red and Blue, are set to receive funding to help low- to moderate-income households, multifamily housing, and historically underinvested communities cut energy costs and improve air quality. The first wave of states to receive funding includes New York, with others soon to follow, as well as Wisconsin queued up for action.
The rebate programs will help households struggling with energy poverty, with one in seven U.S families facing high energy burdens. The funds allocated through the Home Electrification and Appliance Rebates program will help households upgrade to energy-efficient, all-electric appliances and equipment, with varying rebate amounts based on income. The Home Efficiency Rebates program will provide funding for retrofit measures and packages based on energy savings, housing type, and income. States can choose to apply for both programs, with New York focusing on low-income households initially.
States like New York have quickly approved programs to help low-income households access funding for energy upgrades, building on existing collaborations with home energy contractors. Other states are working through challenges of program development and implementation, such as staffing limitations or approvals needed before moving forward. New Mexico was the first state to submit applications for both rebate programs, recognizing the potential impact of federal funds on residents facing high energy burdens.
Energy Innovation’s program guidance identifies seven design principles to enhance the success of rebate programs, including using data to inform strategies, providing support to consumers and contractors, and aiming for sustainable market momentum. Swift action is needed from states and tribal governments to apply for funding before the January 2025 deadline, with funds forfeited by states that do not apply redirected to others. The time is now for states and tribal governments to help households save energy and money while creating new jobs and economic investments.
Efficient home energy upgrades will not only reduce energy burdens on households but also cut costs, improve air quality, and boost local economies. All states and tribal governments are eligible to apply for funding, with affordability at the forefront of the programs. The Inflation Reduction Act’s home energy rebate programs offer a proven way to help American households save money, create jobs, and drive economic growth. States and tribal governments must act swiftly to take advantage of this opportunity and avoid missing out on funding that could benefit their constituents.
