The Inflation Reduction Act (“Act”) provides funding for states and Tribes to offer financial incentives to homeowners for energy-efficiency upgrades to their property. The Act is the largest piece of climate legislation in U.S. history and was signed into law by President Biden in 2022. Funding is provided through two programs – the Home Efficiency Rebates and the Homes Electrification and Appliance Rebates (“HEAR”) programs. These programs are referred to as the Home Energy Rebates. These rebates may be coupled with tax credits and deductions to provide additional incentives for homeowners to invest in clean energy.
New York is the first state to obtain approval through the HEAR program. New York’s program is divided into two phases. The first phase offers homeowners in low-income households up to $14,000 in total rebates for making energy-efficiency upgrades to their homes. Rebates are granted for installing air sealing, insulation, ventilation, heat pumps, and heat pump water heaters, as well as for installing the electrical upgrades necessary to make those modifications. New York’s website offers a list of approved contractors that may make the modifications. Combined with New York’s EmPower+ program, which grants low-income households up to $10,000 for energy improvements made to their primary residence, consumers can access a total of $24,000 in rebates.
The second phase of New York’s program is expected to be launched in the fourth quarter of 2024. This phase will expand the rebate program to include middle-income households, multifamily buildings, and for the purchase of certain electric appliances.
The Department of Energy (“DOE”) has additionally released guidelines for Tribal governments to apply for funding through the HEAR program. Applications are due May 31, 2025 and the plan is due 90 days prior to the planned program launch. Once a Tribe’s application is approved, it may launch its program.
As of June 25, nineteen states have applied for funding. Washington, California, and Hawaii have received approval and are expected to launch their programs shortly. A map can be found here showing which states have applied for and received funding.
Utilities and cities can serve their communities by assisting consumers in implementing clean energy and energy efficiency technology, and keeping their communities competitive in the evolving energy economy. Through these rebates, utilities can help customers reduce energy consumption, encourage energy efficient building initiatives, and lower the cost of service.
For more information regarding the energy rebates, how to develop plans for implementation in your service areas, for information on other energy incentives, or for assistance with applying for funding, please contact Keith Gordon, Gelane Diamond, or Jeff Genzer.
