12 States Utilize Federal Funds for Home Energy Upgrades
TL/DR –
The Inflation Reduction Act funding is set to stimulate home energy improvements for American households, with twelve states accessing their share of nearly $9 billion in federal Home Energy Rebates. This funding will support energy efficiency upgrades and new appliances in low- to moderate-income households. Rebate recipients will benefit from reduced energy costs and the creation of new jobs in the building sector, while states have until January 2025 to apply for funding or risk forfeiting their share to other states.
U.S. Households to Benefit from Billions in Home Energy Improvement Funding
The Inflation Reduction Act is set to enhance home energy improvements across the nation, injecting billions into this sector. Twelve diverse states are utilizing their slice of nearly $9 billion federal Home Energy Rebates to bolster energy efficiency, electrification upgrades, and appliance renewals via state energy offices. These incentives will assist low- to moderate-income households, multifamily housing, and traditionally underinvested communities, reducing energy expenses and indoor air pollution.
All state and tribal governments can apply to the U.S. Department of Energy for funding to provide rebates for residents to install clean technologies such as heat pump HVAC systems, heat pump water heaters, and insulation. The first wave of state applicants are bipartisan, demonstrating that affordability and public health are universal concerns.
New York is leading the way, receiving <$158 million for its Home Electrification and Appliance Rebates Program. Several other states, including Arizona, California, Colorado, Georgia, Hawaii, Indiana, Minnesota, New Hampshire, New Mexico, Oregon, and Washington are set to receive funds soon, with Wisconsin readying for action. Rebate recipients will enjoy relief from rising energy prices, bolstering local economies as the building sector hires new workers for energy retrofits. An additional $200 million is available for workforce training efforts, allowing states to grow their workforce to meet increasing demand for efficient, electrified home energy technologies.
Combatting Energy Poverty with Home Energy Rebates
With One in seven U.S. families living in energy poverty, home energy rebates can ease the burden of high energy costs. The Inflation Reduction Act’s rebate programs utilize $4.5 billion to provide energy-efficient, all-electric appliances and equipment through Home Electrification and Appliance Rebates. Rebate amounts depend on the upgrade, housing type, and household income. The remaining $4.3 billion of federal funds is allocated to Home Efficiency Rebates that can be applied to numerous retrofit measures and packages.
States can opt for both programs, with many prioritizing quick action over all-inclusive approaches. Notably, all states with submitted applications have sought funding from the electrification and rebate programs.
Innovative State Programs
New York’s program is dedicated initially to low-income households. Upgrades include energy-efficient heat pumps for heating and cooling, heat pump water heaters, home insulation, and air sealing. The program is expected to start by summer 2024. New York’s quick access to funding approval can be attributed to their track record of home energy contractor collaboration and private sector partnerships, as seen in their Clean Heat Connect program.
New Mexico, the first state to submit applications for both Home Efficiency Rebates and Home Electrification and Appliance Rebates programs, highlights how these federal funds can be transformative for those with high energy burdens. In the coming weeks, the DOE will keep working with state energy offices and tribal governments to navigate application processes. Deadline is January 2025, and those failing to apply will forfeit their funds to other states.
Resources for Program Development and Implementation
For states still figuring out program details, Energy Innovation’s Inflation Reduction Act Home Energy Rebates: Program Guidance for State Energy Offices offers seven key design principles for increasing program success. Case studies from existing energy efficiency and electrification programs provide states with proven solutions to common challenges.
Efficient Home Energy Upgrades: A Priority for States
Home energy upgrades can reduce energy burdens on U.S. households, while stimulating housing investments and expanding local workforces. All states and tribal governments can apply for home energy rebate program funding, but swift action from state agencies and elected officials is essential. For those states that miss out on this opportunity, unused funds will go to other states. The Inflation Reduction Act’s home energy rebate programs offer a dependable solution for saving money, creating jobs, and promoting economic investment.
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