Inflation Reduction Act home energy rebates may arrive soon

Rebates tied to home energy efficiency and created by the Inflation Reduction Act may start flowing to many consumers within months.  

The federal government is issuing $8.8 billion for Home Energy Rebates programs through states, territories and tribes, which must apply for the funding. The U.S. Department of Energy approved the first application for New York on April 18, awarding it an initial $158 million.

The DOE is hopeful New York will open its program to consumers by early summer, according to Karen Zelmar, the agency’s Home Energy Rebates program manager. The state has the fourth-largest total funding allocation, behind California, Texas and Florida.   

The federal rebates — worth up to $14,000 or more per household, depending on a state’s program design — are basically discounts for homeowners and landlords who make certain efficiency upgrades to their property.

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The rebates aim to partially or fully offset costs for efficiency projects like installing electric heat pumps, insulation, electrical panels and Energy Star-rated appliances.

Their value and eligibility vary according to factors like household income, with more money flowing to low- and middle-income earners.

The DOE also expects the programs to save households $1 billion a year in energy costs due to higher efficiency, Zelmar said.

Eleven other states have also applied for funding: Arizona, California, Colorado, Georgia, Hawaii, Indiana, Minnesota, New Hampshire, New Mexico, Oregon and Washington. Many other states are also far along in their application process, Zelmar said.  

“We certainly hope to see all the programs launched … by this time next year, and hopefully much sooner than that for many of the states,” she said.

States must notify the Energy Department they intend to participate by Aug. 16, 2024. Applications are due by Jan. 31, 2025.

The Inflation Reduction Act earmarked $369 billion in spending for policies to fight climate change, marking the biggest piece of climate legislation in U.S. history. President Biden signed the measure into law in August 2022.

The IRA divided $8.8 billion in total rebate funding between two programs: the Home Efficiency Rebates program and the Home Electrification and Appliance Rebates program.

New York’s application was approved for the the latter program. So far, just four states — Georgia, Oregon, Indiana and New Mexico — have applied for both.

“I hope that at this time next year we have 50 states with rebate programs,” said Kara Saul Rinaldi, CEO and founder of AnnDyl Policy Group, a consulting firm focused on climate and energy policy.

While their goals are the same — largely, to reduce household energy use and greenhouse gas emissions — the two…