Center for American Progress

How States Can Equitably Deliver Home Electrification Rebates
Report

How States Can Equitably Deliver Home Electrification Rebates

State and Tribal authorities must prioritize exhausting and distributing more than $4.5 billion through the Home Electrification and Appliance Rebate program directly to low- and moderate-income households in order to decarbonize the nation’s most climate-vulnerable, energy-burdened homes.

In this article
Photo shows workers on a roof of a light grey hours against a cloudy sky
Workers install solar panels on the roof of a home in North Carolina, December 2021. (Getty/Lindsey Nicholson/UCG/Universal Images Group)

This report contains a correction.

Introduction and summary

Following the U.S. Department of Energy’s (DOE) July 2023 release of rebate guidance, more than $8 billion in funding from the Inflation Reduction Act has become available to states and Tribes for the planning and distribution of funding through the Home Energy Rebate program.1 States’ and territories’ energy offices can submit applications for funding from fall 2023 until January 31, 2025, though the DOE expects most eligible households to have access to rebates by 2024.2 These rebates will save households nearly $1 billion on their energy bills annually, lead to reduced pollution,3 and improve the health of disadvantaged communities and households,4 as well as help establish innovative efficiency and electrification programs, make sustained investments in and transform the markets of the nation’s clean energy economy, and spur the growth of inclusive, high-quality jobs in the home energy industry.5 Low-income, energy-burdened residences are most vulnerable to the impacts of climate change and air pollution and, thus, most in need of improved home energy efficiency.6 In order to help them fully and quickly realize the benefits of home electrification, states should: 

  1. Prioritize meeting 100 percent of funding costs for low-income households and stacking rebates for moderate-income households to avoid hidden costs.
  2. Centralize all rebate-related points of contact to ensure application accessibility and effective outreach.
  3. Centralize all rebate-related points of contact and merge consumer-facing programs between utilities and state energy offices to ensure application accessibility and maximize resident participation.
  4. Clarify to consumers that electrification rebates are not retroactive in order to avoid confusion and unexpected costs.
  5. Ensure adherence to Justice40 through a high volume of project delivery to low-income households.
  6. Consider quick-start programs or pilots of rebate programs.
  7. Fortify state community and workforce engagement through the DOE’s State-Based Home Energy Efficiency Contractor Training Grants Program.
  8. Integrate state tools with the DOE’s proposed rebate database.
  9. Utilize third-party income verification tools where needed.

This report details all these recommendations in its final section. First, however, it provides background information on the Home Electrification and Appliance Rebate program and discusses existing approaches to energy rebate distribution in Maine, Vermont, Alaska, Oregon, Michigan, California, North Carolina, Illinois, and Colorado.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Background

Deeply discounting electric appliances or providing them for free is essential to allowing low-income households to access the benefits of home electrification. Likewise, the equitable distribution of the Inflation Reduction Act’s limited electrification rebates is critical to helping low-income households realize these benefits and meeting decarbonization and health goals. Meeting the 2050 net-zero emissions target set by the Paris Agreement will require that nearly 1 billion U.S. household appliances and machines are electrified at a rate of about 4 million machines per month for the next 20 years.7 Outreach to low-income communities is vital to raising participation in the Home Electrification and Appliance Rebates program across the country, as well as to reducing energy poverty and income inequality, as the average household savings that result from electrification per year can be $2,500­–$4,000.8

What’s the difference between Home Electrification and Appliances Rebates and Home Efficiency Rebates?

Efficiency rebates are for whole-home efficiency upgrades and are calculated based on the modeled or measured energy savings from these upgrades. Modeled efficiency rebates are calculated prior to home upgrades, and measured rebates are calculated post-installation, or after project completion.9 While states can provide a way for residents to receive an upfront discount for efficiency projects, this is not a requirement, and efficiency rebates must only be provided for completed projects.10 Moreover, efficiency rebates are not exclusive to electric appliances and could go toward new fossil fuel appliances that might yield energy savings but not emissions reductions.11

Conversely, electrification rebates are legally required to be available at the point of sale and serve as an “instant discount” on the price a resident pays for a qualified upgrade or service.12 Electrification rebate amounts are allotted based on income level and the type of qualified electrification product or upgrade, rather than the energy savings from an upgrade.13

Low- to moderate-income residences are more likely to face climate-related impacts and three times more likely to face utility cutoffs and unaffordable energy bills than more affluent households.14 Reducing barriers to home retrofitting will require point-of-sale rebates that lower upfront purchase and installation costs for households and make electric appliances more competitive with their fossil fuel-dependent counterparts.15

The structure of the Inflation Reduction Act’s Home Electrification and Appliance Rebate program differs from traditional rebate structures. Eligible recipients include low- and moderate-income households, renters, and multifamily buildings.16 Moderate-income residents are eligible to receive rebates that cover up to 50 percent of qualified project costs, and low-income residents are eligible to receive rebates that cover up to 100 percent of project costs.17 Customers will have their rebate amount deducted at the point of sale and from the total cost of their project payment, regardless of whether they are purchasing an appliance or materials directly from a participating store or through a project contractor.18

Electrification rebates cover appliances including electric stoves, ovens, dryers, and heat pumps used in space heating or cooling, as well as building materials such as electric wiring, insulation, and air sealing. Replacing gas furnaces with electric heat pumps can reduce residential carbon dioxide emissions by more than half over a 15-year period.19 In addition, appliance electrification through the Home Energy Rebate program can significantly reduce other harmful indoor air pollutants such as particulate matter, nitrogen dioxide, and carbon monoxide; reduce energy burdens as a result of income inequality; and yield around $17.2 billion in savings for low- and moderate-income households every year.20

Existing state approaches to energy rebate distribution

An effective and highly accessible method of integration—not only for electrification rebates but also for other state-specific electrification tax credits and programs—is online one-stop shop portals through which residents can access a user-friendly interface that contains all relevant information, resources, links, and guidance on the programs for which they qualify. An interface that allows residents to file paperwork online or to input their information once and then have relevant programs populate automatically can lead to higher subscription rates for rebates and better uptake from low-income customers.21

How a state employs a one-stop shop method will largely depend on its technical capacity, but existing energy efficiency initiatives have already taken many standout approaches that are worth considering or modeling in terms of mission, structure, and implementation.

Variability in state approaches is expected, but rebate distribution should not be inconsistent

Equitable, successful rebate distribution will depend on the commitment of state and Tribal jurisdictions to ensure that low- and moderate-income households are first in line for, first to receive, and first to benefit from the energy cost savings, pollution reduction, and health impacts of Home Electrification and Appliance Rebates. Disadvantaged communities are most in need of infrastructure improvements in their homes and communities, including updating often older and inefficient appliances,22 and the Home Energy Rebate program can help meet this need.23 States and Tribes have unique socioeconomic variables—such as high percentages of low- and moderate-income households—that will likely lead to distinct rebate program structures. Whether a state chooses to conduct a pilot program, participate in the contractor training program, fully use the application programming interface (API) tool, or merge their programs with utilities, it must consistently prioritize rebate delivery to low- to moderate-income residences or risk leaving communities further behind in the nation’s energy transition.

Below are a few of many state examples that demonstrate how comprehensive, streamlined energy and appliance programs can be replicated to distribute the Inflation Reduction Act’s Home Electrification and Appliance Rebates.

Maine

Efficiency Maine is a leading quasi-state agency and independent administrator for programs related to energy efficiency for low-income, residential, commercial, and industrial participants.24 It works with the governor’s energy office to coordinate efforts for equitable, economical, and efficient deployment of clean energy technologies in Maine.25 Its website provides “consumer information, marketing support, demonstration pilots, discounts, rebates, loans, and other initiatives” to help households, businesses, and institutions in Maine “reduce their energy costs and lower their greenhouse gas emissions.”26 The website is a layered, comprehensive guide allowing residents to directly access and apply for the state’s many energy efficiency programs. For example, the “Income-Based Eligibility Verification” page populates program results for customers based on their adjusted gross income or current enrollment in other programs such as the Supplemental Nutrition Assistance Program (SNAP) and provides information on energy incentives and solutions for households, businesses, schools, industrial facilities, and multifamily buildings.27 Efficiency Maine is currently designing programs and administration efforts in line with Home Electrification and Appliance Rebates federal funding.28

Vermont

Like Efficiency Maine, Efficiency Vermont provides customers with extensive information on buying energy efficiency products and finding contractors, as well as support for completing projects.29 Its “Find Your Rebates” webpage provides a thorough list of available rebates for appliances, building performance assessments, and weatherization, and it will absorb Home Electrification and Appliance Rebates guidance into its existing incentives and assistance when funding becomes available.30 Through December 2022, Vermont’s Zero Energy Now program enabled Vermont homeowners to participate in an energy retrofit program for weatherization, efficient heating solutions, and home solar photovoltaic cells. Zero Energy Now drastically reduced energy costs and greenhouse gas emissions for participating households, and households that opted in reduced their carbon emissions by 94 percent and could save 173 metric tons of carbon dioxide annually.31 The success of this program is what Vermont seeks to scale up along with its coverage of appliances, installation costs, circuit panel upgrades, insulation, ventilation, wiring, and more.32

Alaska

The Renewable Energy Alaska Project (REAP) is a statewide nonprofit organization that advances the development of renewable energy and energy efficiency in Alaska through a variety of initiatives centered around education, collaboration, training, and advocacy.33 Thanks in part to REAP’s advocacy for greater energy efficiency funding, the Alaska Housing Finance Corp. (AHFC) has made more than 50,000 Alaskan homes more energy efficient, has saved households 30 percent on heating costs, and has implemented home improvements that have saved 30 million gallons of heating oil annually.34 REAP provides residents with a home energy savings guide and tips, resources for energy audits, state clean energy policies, and a “Guide for Alaskan Homeowners” with information pertaining to Inflation Reduction Act tax credits, incentives, and rebates.35 The AHFC will oversee Home Energy Rebate distribution and “begin designing rebate programs that both follow DOE guidelines and take Alaska’s unique needs and challenges into consideration.”36 Alaska Housing’s Resource Information Center library contains more than 9,000 books, manuals, magazines, visual/audio materials, and links for those who own or reside on residential and commercial properties to learn about energy efficiency, building remodeling and monitoring, the environment, sustainability, renewables, and building codes.37 Its “Building and Energy Efficiency Information” webpage provides resources and links for projects such as appliance upgrades, heating, home maintenance, wind and solar energy, and weatherizing.38

In addition, the Alaska Native Tribal Health Consortium houses a Rural Energy Program for remote Indigenous communities in extremely cold climates who face extremely high energy usage and costs.39 While the program’s primary focus is on improving rural sanitation and the sustainability of Alaskan Native health care facilities, its work also includes energy efficiency upgrades, building weatherization, heat recovery, remote monitoring, and renewable energy projects such as wind, solar, and hydro that reduce dependence on imported fuel.40

Oregon

The Energy Trust of Oregon is an independent, customer-based nonprofit with long-held credibility among its customers and stakeholders.41 It services Oregon residents in residential, commercial/public, industrial/agricultural, and renewable energy sectors. The trust uses an on-the-ground network of about 1,600 trade ally contractors and allied professionals who connect residents with incentives and programs and since 2022, has saved customers more than $9.7 billion on their energy bills, added $10.4 billion to the local economy, and reduced carbon emissions by 22.3 million tons.42 Its website houses a variety of application portals and assessments for clean energy retrofits, rebates, and programs; its “Home Assessment” page is a free online tool for residents to gauge eligibility for projects and assistance;43 its “DIY Resources and Cash Incentives” page provides guidance and special offers for home energy efficiency upgrades;44 its “Home Upgrades and Cash Incentives” page provides an extensive list of offers for Oregon homeowners;45 and its “Equipment Upgrades and Retrofits” page contains hyperlinks to state energy efficiency incentives and to a forms page with downloadable retrofit and remodeling applications.46

The Oregon Department of Energy, meanwhile, has a publicly available tracking spreadsheet of Inflation Reduction Act and Infrastructure Investment and Jobs Act, also known as the bipartisan infrastructure law, energy-related funding opportunities and timelines specific to the state, including the Home Energy Rebate program.47 The Oregon Department of Energy’s past comments to the DOE on rebate program design include suggestions for a framework that may be worth replicating across other state energy offices: The state department suggests layering rebate funds with existing programs that already have their own processes and incentivizing multifamily affordable housing property owners to participate in the rebate program through promotions that “include a clear description of the benefits that these improvements will have for their tenants, including those related to health and comfort, as well as best practices for installation, operation, and maintenance of the equipment.”48 The state department recommends that the DOE default to or align program eligibility requirements with existing ones wherever possible—such as contractor certification requirements—in order “to overcome barriers to entry for disadvantaged communities.”49

Michigan

The Michigan Department of Environment, Great Lakes, and Energy (EGLE) is the state’s lead agency for distributing the DOE’s Home Energy Rebate funds.50 It expects to open applications for residents in 2024 and will be working closely to braid its Home Energy Rebate programs with other state programs such as those through the Michigan Department of Health and Human Services and the Michigan State Housing Development Authority, as well as rebate programs with local utilities. EGLE is also requiring that the materials and equipment being replaced with energy efficient materials and equipment through the Home Energy Rebate program are recycled. The other major factor that EGLE is exploring are the warranty options for Home Energy Rebate equipment, to ensure that low-income residents have options for replacement if the new equipment breaks. EGLE’s “BIL and IRA Funding” page also provides information and links to other energy-related programs, including the State Energy Program Formula Grants, the Energy Efficiency and Conservation Block Grant Program, and the Energy Efficiency Revolving Loan Fund Capitalization Grant Program.51 State energy services funding opportunities include energy-related projects like the Community Energy Management Program, which offers direct financial incentives to communities for energy management improvements and transitioning to energy efficiency and renewable energy.52 Eligible projects under this program include updating policy, plans, and/or ordinances to include green building standards; promoting climate change adaptation and resilience; benchmarking energy usage; measuring greenhouse gas emissions; tracking renewable energy projects and energy efficiency upgrades; and providing public engagement, training, and workshops. Michigan’s Council on Climate Solutions is an advisory board within the state department charged with formulating and overseeing Michigan’s Healthy Climate Plan, which includes repairing and decarbonizing homes and businesses, making energy efficiency and weatherization upgrades, and reducing energy waste.53

California

California’s Layered Energy Applications for Residents (CLEAR) Act of 2023 (California S.B. 755) would require the California Energy Commission, formally called the State Energy Resources Conservation and Development Commission, to “develop and make publicly available an internet website for energy efficiency and building decarbonization programs administered by the Energy Commission … that are available in the state for residential buildings and residential electricity customers.”54 It would also require the commission to enable customers to apply for the included programs through the website and to externally link to programs not under the commission or not on the website. Information that the website gathers from applicants, with consent, will include name, address, and income, auto-populating the information in applications for those programs that the commission administers and for which the user is qualified. The commission aims to “communicate with local organizations in disadvantaged communities about the internet website, including annual changes or updates,” with the goal of improving “the distribution and access to state and federal programs for energy efficiency and building decarbonization programs by streamlining current and future investments, opportunities, and financing into a one-stop shop application.”55 This approach to the electrification rebates includes issuing guidance and funding available to states and Tribes for contractor training in spring 2023 and for rebates in summer 2023, as well as launching programs for publicly available rebates in 2024.56

North Carolina

North Carolina is one of two states in the South whose retail energy savings substantially exceed its retail sales.57 In 2021, North Carolina became the first state in the South to set clear decarbonization goals in its H.B. 951, which requires the state Utilities Commission to reduce electricity sector emissions by 70 percent by 2030 and reach carbon neutrality by 2050.58 Duke Energy and Duke Energy Progress offer home improvement rebates to North Carolina residents through their Smart $aver programs and provide eligibility requirements, links for appliance-specific installation, and a contractor finder page for applicants.59 The North Carolina State Energy Office and Department of Environmental Quality will oversee electrification rebate distribution and provide further information on its “Energy Efficiency Rebates” webpage.60 The Central Pines Regional Council will also help streamline energy efficiency, weatherization, home repair, and rehabilitation programs for low-income households.61 The state’s Department of Environmental Quality also partners with state organizations and universities for energy efficiency programs such as low- and moderate-income audits, upgrades, and monitoring; the Enhancing Electric Rebate Program; and supportive housing mechanical system efficiency upgrades and housing energy efficiency impact measurements for low- and moderate-income households.62

Illinois

The Illinois Environmental Protection Agency Office of Energy will oversee and administer home energy rebates to households.63 It provides resources on its “Energy Rebates” page about the Inflation Reduction Act, including external links to home energy rebate program FAQs and Energy Star tax credits and incentives for energy efficiency, as well as an email list to sign up for Illinois Office of Energy Inflation Reduction Act updates.64 The Illinois Office of Energy partners with the Smart Energy Design Assistance Center (SEDAC), which offers a variety of climate action-oriented programs, including energy code training for new construction and renovation, building energy code education, energy efficiency services, and climate action planning for state organizations and communities.65 SEDAC also has an energy efficiency resources page and aims to “Foster a more equitable energy landscape by improving access to energy efficiency services”; “Grow and diversify the clean energy workforce, especially in underserved communities”; and “Help communities become more sustainable and resilient through climate action planning.”66 Illinois also has an Energy Star Appliance Rebate Program for HVAC equipment upgrades, water heaters, and appliances.67 Home Energy Rebates and information will be made publicly available on the Office of Energy website.68

Colorado

Energy Smart Colorado is a nonprofit comprising 10 community-based organizations whose mission is to advance residential and commercial energy efficiency and climate action.69 Since 2010, it has awarded $15 million in rebates to residents and businesses in 18 Colorado counties; has saved homes $5 million in utility costs and 36.3 million kilowatt-hours in energy savings; and has abated more than 45,000 metric tons of carbon dioxide.70 Its “Energy Saving Rebates” page contains information and links to rebates specific to communities and utility providers, as well as an “Apply for a Rebate” portal through which applicants can receive rebates and upload their project receipts.71 Its “Take Advantage of Tax Credits and Incentives” page provides information about Inflation Reduction Act incentives including the Home Energy Rebate, Colorado tax credits, and a calculator for federal program eligibility.72

Recommendations

All state entities involved in distributing electrification rebates must commit to the DOE’s full program guidance and Justice40 allocation goals73 and coordinate between federal and local funding, programs, and partnerships to fully realize the emission and cost reductions, energy savings, and other environmental justice opportunities of the Home Energy Rebate program.

The following recommendations outline how program administrators can approach their delivery of electrification rebates and ultimately uphold an equitable clean energy transition within the nation’s buildings sector.

Prioritize meeting 100 percent of funding costs for low-income households and stacking rebates for moderate-income households

Prioritizing funding for low-income households will require states to fully meet the maximum rebate amount for low-income residences, which is “not to exceed” 100 percent of a qualified project cost.74 If less than 100 percent of project costs are covered, states risk disincentivizing low-income families from participating—or worse, pushing them to completely opt out of the Home Energy Rebate program due to unaffordable upfront costs and mistrust.75 Therefore, states must meet the 100 percent coverage ceiling for every electrification rebate product and service in every low-income residence, which aligns with the DOE’s clarification in Section 4.1.3 of the Home Energy Rebate guidance that low-income households receive “distinct treatment” and its Section 3.1.5 requirement that states provide an “acceptable method for low-income households to not be required to use personal funds at the point of sale to pay for rebate-covered work.”76

For moderate-income households—whose expenditures on electric products and services will be covered at a maximum of 50 percent—optimizing stacking of the 25C residential energy efficiency tax credit and applying the maximum 30 percent expenditure reduction can help decrease soft costs, saving residents hundreds of dollars.77

In line with DOE’s data collection requirements, states must document home energy upgrades and track rebate uptake to ensure that household financial needs are met and resources for clean energy upgrades are exhausted.

About the Justice40 Initiative

The Justice40 Initiative, established in President Joe Biden’s executive order on tackling the climate crisis at home and abroad, aims to deliver to underserved communities 40 percent of the overall benefits from federal investments in climate change, clean transit, clean energy and energy efficiency, housing, workforce development, legacy pollution remediation, and water infrastructure.78

Ensure adherence to Justice40 through high volume of project delivery to low-income households

The DOE’s guidance recommends that states must “address Justice40 Initiative” by prioritizing the delivery of rebates and program benefits to low-income and disadvantaged communities.79 Section 4.1.3 of the Home Energy Rebate guidance requires that states allocate a percentage of their rebate funding for each of the rebate programs proportional to their percentage of low-income households and make a focused effort to deliver the volume of projects needed to spend the allocation.80 To reach this threshold, states must commit to proportionately serving low-income households and setting aside rebate funding that is no less than their specific low-income percentage. In Washington, D.C., for example, where 41.4 percent of households are low-income and the total funding allocation for electrification rebates and program administration is $29,800,000, allocations for the city’s low-income households and multifamily buildings should be approximately $12 million at a minimum.81 Unreservedly delivering rebates at this threshold within the Home Energy Rebate program will position states to meet the broader Justice40 goal of delivering 40 percent of federal investments in clean energy and energy efficiency to families most in need. Coordinating community outreach with local organizations that support, represent, or directly work with underserved, low-income households is also crucial to long-term rebate program awareness, education, and uptake.82

Centralize all rebate-related points of contact and merge consumer-facing programs between utilities and state energy offices

Many states already have state- or utility-run efficiency programs and federally funded weatherization programs. If low-income families were able to stack multiple incentives together, they could achieve needed improvements to their insulation, wiring, and appliances. However, navigating multiple programs can be confusing and time consuming. States should designate a central point of contact for Home Electrification and Appliance Rebates and state-specific rebates in order to streamline all questions, concerns, and assistance related to applications for energy efficiency-related tax incentives. Funneling all rebate-related communications through a one-stop shop portal or website could help maximize stacking of and subscription to decarbonizing initiatives for optimal disbursement of Inflation Reduction Act funds, as well as of associated benefits in home emissions reductions. Outreach to households should include partnerships with local organizations, labor unions, or churches, and it should funnel all Home Energy Rebate-related digital ads, direct mailings, and other education materials through a multilingual, central point of contact, organization, or state office to ensure clarity and accessibility of information and assistance.

Should state energy offices choose to partner directly with state utilities, Section 4.2.1 of the DOE’s guidance allows for a portion of a state’s estimated outreach and education budget to be covered by other state, local, or utility resources. Utility integration of Inflation Reduction Act energy efficiency tax incentives and rebates can result in lower renewables costs, accelerated electrification, near-term buildout, more affordable retrofits, and adoption of emerging technologies.83 If a state has a state energy office that overlaps with utility energy efficiency programs, both entities should offer a single, blended program that provides residents with one primary application, singular point of contact, and service provider backed by blended state and utility funding.84 Either an state energy offices or a utility can lead rebate program operation and distribution, with the other directly assisting in areas of contractor hiring, training, program marketing, outreach, technical assistance, and program tracking. Such integration would allow for greater program knowledge and uptake.

Clarify to consumers that electrification rebates are not retroactive in order to avoid confusion and unexpected costs

All Home Electrification and Appliance Rebates are required85 to be used at point of sale, and all eligible low- to moderate-income residents who receive them will have the price of a qualified upgrade or service instantly discounted. States are not legally authorized to offer electrification rebates retroactively86 and should consistently and clearly communicate this to customers who may confuse them with Home Efficiency Rebates, which can be offered retroactively to eligible projects initiated on or after the Inflation Reduction Act’s August 16, 2022, enactment.87 Low-income applicants generally cannot shoulder the upfront project costs of installing new, eligible appliances or the financial burden of a long retroactive rebate wait time88 and therefore should be provided with clear and accurate information about the nature of both rebate types, eligible products, expected project timelines, and rebate price allotments.

Consider quick-start programs or pilots of rebate programs

States can apply up to 25 percent of their allotted funds to a quick-start program that requires them to plan to launch electrification rebates early, in 2023.89 The DOE will prioritize quick-start application processing and enable states to achieve a “more rapid rebate program launch” and develop a program that leverages existing infrastructure, such as preestablished energy efficiency programs.90 It will also allow states to target specific populations or specific policy goals and priorities. States also have the option of piloting a rebate program before fully committing their funding allocations to a given program design—giving them greater flexibility, assurance, and discretion to test out the structures of their rebate delivery, including approaches to community outreach, data collection, and evaluation of rebate impact. States that have existing programs to use as models, and the capacity to do so, should choose this pathway to get a better sense of the reach and initial success of their rebate programs.

Fortify state community and workforce engagement through the DOE’s State-Based Home Energy Efficiency Contractor Training Grants Program

A diverse, skilled, and equitable workforce is foundational to the success of the Home Electrification and Appliance Rebate program, as well as the nation’s clean energy transition. DOE guidance requires that each state’s community benefits plan work “with responsible contractors who invest in ongoing workforce education and training,” ensure high-quality jobs, and “retain skilled workers in the home energy upgrade industry.”91 To facilitate this goal, states can utilize $200 million in Inflation Reduction Act funding for the State-Based Home Energy Efficiency Contractor Training Grants (CTG) program, which will: 1) help reduce the cost of training contractor employees; 2) provide testing and certification of contractors installing home electrification technologies; and 3) partner with nonprofits to develop and implement a state-sponsored workforce program.*92 In order to support a skilled, qualified workforce, DOE guidance encourages applicants to “engage with labor unions and community stakeholders,”93 which can include investments in workforce education, joint labor-management training programs, or utilizing registered apprentices on projects. CTG funding can also help support project labor and community benefits agreements that include provisions such as “registered apprenticeship programs, labor-management training partnerships, quality pre-apprenticeship programs, card check neutrality, and local and targeted hiring goals.”94 Regardless of whether a state participates in the CTG program, integrating electrification rebates with consistent community and labor union engagement; upskilling incumbent workers; and amplifying career training, awareness, and design delivery of programs to underserved populations will ensure job creation within these communities as well as transparency and efficiency of rebate distribution.

Related reading

Integrate state tools with the DOE’s proposed rebate database

Weaving existing state tools, applications, and portals that can process private information, track rebate requests, and utilize contractor-customer networks together with a DOE database of rebate reservations would ensure that rebate funds are equitably and efficiently allocated. The DOE is seeking feedback on its API and workflows that detail the step-by-step procedures that stakeholders—including state energy offices, third-party organizations, building owners, vendors, and installers—will take in administering electrification rebate applications and reservations.95 These workflows will become part of an “easy-to-use, easy-to-integrate system” that delineates DOE, state-led, and private sector implementation responsibilities.96 Under this approach, states are not required to use the full capabilities of this national tool but must “use APIs and/or DOE-provided spreadsheets” to link state data reporting systems with federal infrastructure.97

The DOE’s proposed approach to improve efficiency and simplification of existing structures of state rebate programs includes consolidating within these tools state reporting and processing of resident-specific or protected personally identifiable information. Using the full capabilities of these tools can help states generate rebates efficiently, use minimum reserves for low-income and multifamily housing, adhere to household rebate limits, and ensure point-of-sale use and national retailer participation.

Utilize third-party income verification tools where needed

The DOE requires states to use federal programs to categorically verify income eligibility.98 To implement this and streamline the process for low-income residents, states may decide to partner with third-party implementers that have income verification tools and can coordinate with states. Independent nonprofit organizations have crafted an array of helpful tools and resources crafted to streamline energy efficiency rebate applications and increase overall accessibility. This includes Rewiring America’s Inflation Reduction Act savings calculator and explainer.99 The Oregon Department of Energy, meanwhile, recommends, “To aggregate available incentives, a tool like a residential consumer-focused DSIRE database could be helpful for program implementers.”100 Many rebate programs and retrofit initiatives are dependent on area median income (AMI); customers who seek to gauge their eligibility can use Fannie Mae’s AMI lookup tool.101

Conclusion

States and Tribes must prioritize rebate delivery to low- and moderate-income residents who cannot afford these upgrades on their own and are most vulnerable to power shut-offs and high energy burdens. Realizing the pollution reduction, jobs creation, and energy savings benefits of the Home Electrification and Appliance Rebates program rests on the ability of program administrators to use all tools, methods, programs, and partnerships available to them to electrify households and strengthen climate resilience across the United States.

Acknowledgments

The author would like to thank CAP’s Shannon Baker-Branstetter, Nate Fowler, Karla Walter, Trevor Higgins, and Rachel Chang for their contributions, as well as Kristen Eberhard from Rewiring America, Julie Staveland from the Michigan Department of Environment, Great Lakes, and Energy, and the U.S. Climate Alliance for their review.

* Correction, November 3, 2023: This report originally incorrectly stated the amount available to state energy offices through the State-Based Home Energy Efficiency Contractor Training Grants program. The correct amount is $200 million.

Endnotes

  1. Office of State and Community Energy Programs, “Inflation Reduction Act Home Energy Rebates: Program Requirements and Application Instructions” (Washington: U.S. Department of Energy, 2023), p. 51, available at https://www.energy.gov/sites/default/files/2023-10/home-energy-rebate-programs-requirements-and-application-instructions_10-13-2023.pdf.
  2. U.S. Department of Energy, “Home Energy Rebates Frequently Asked Questions,” available at https://www.energy.gov/scep/home-energy-rebates-frequently-asked-questions (last accessed October 2023).
  3. U.S. Department of Energy, “Maximizing Home Energy Performance When Using Home Energy Rebates,” available at https://www.energy.gov/scep/slsc/home-energy-rebate-program/maximizing-home-energy-performance-when-using-home-energy (last accessed October 2023).
  4. U.S. Department of Energy, “Home Energy Rebate Programs,” available at https://www.energy.gov/scep/home-energy-rebate-program (last accessed October 2023); U.S. Department of Energy, “Serving Low-Income Households with Home Energy Rebates,” available at https://www.energy.gov/scep/slsc/home-energy-rebate-program/serving-low-income-households-home-energy-rebates (last accessed October 2023).
  5. U.S. Department of Energy, “How Home Energy Rebates Can Support the Clean Energy Economy,” available at https://www.energy.gov/scep/slsc/home-energy-rebate-program/how-home-energy-rebates-can-support-clean-energy-economy (last accessed October 2023).
  6. Ibid.; U.S. Environmental Protection Agency, “EPA Research: Environmental Justice and Air Pollution,” available at https://www.epa.gov/ej-research/epa-research-environmental-justice-and-air-pollution (last accessed October 2023); Trevor Higgins and others, “To Decarbonize Households, America Needs Incentives for Electric Appliances” (Washington: Center for American Progress, 2021), available at https://www.americanprogress.org/article/decarbonize-households-america-needs-incentives-electric-appliances/.
  7. Rewiring America, “Bringing Infrastructure Home: A 50-State Report on U.S. Home Electrification” (2021), available at https://www.rewiringamerica.org/policy/bringing-infrastructure-home-report.
  8. Saul Griffith and Sam Calisch, “Household Savings Report” (Rewiring America, 2020), available at https://www.rewiringamerica.org/policy/household-report.
  9. Office of State and Community Energy Programs, “Inflation Reduction Act Home Energy Rebates: Program Requirements and Application Instructions,” pp. 12–13.
  10. Ibid., p. 11.
  11. Alisa Petersen, “Implementation Guidance for States: Home Efficiency Rebate Program” (Basalt, CO: RMI and Evergreen Collaborative, 2023), available at https://rmi.org/wp-content/uploads/dlm_uploads/2023/02/home_efficiency_rebate_program.pdf.
  12. Office of State and Community Energy Programs, “Inflation Reduction Act Home Energy Rebates: Program Requirements and Application Instructions,” p. 8.
  13. Ibid., p. 50.
  14. U.S. Environmental Protection Agency, “Climate Change and the Health of Socially Vulnerable People,” available at https://www.epa.gov/climateimpacts/climate-change-and-health-socially-vulnerable-people (last accessed October 2023). Shannon Baker-Branstetter and Rachel Chang, “The Inflation Reduction Act Reduces Emissions and Income Inequality” (Washington: Center for American Progress, 2023), available at https://www.americanprogress.org/article/the-inflation-reduction-act-reduces-emissions-and-income-inequality/.
  15. Jeff Deason and others, “Electrification of buildings and industry in the United States: Drivers, barriers, prospects, and policy approaches” (Berkeley, CA: Berkeley Lab Electricity Markets and Policy Group, 2018), available at https://emp.lbl.gov/publications/electrification-buildings-and#:~:text=Among%20the%20promising%20energy%20system,product%20quality%20in%20some%20industrial
  16. Office of State and Community Energy Programs, “Inflation Reduction Act Home Energy Rebates: Program Requirements and Application Instructions.”
  17. Ibid.
  18. U.S. Department of Energy, “Home Energy Rebates Frequently Asked Questions.”
  19. Theresa Pistochini and others, “Greenhouse gas emission forecasts for electrification of space heating in residential homes in the US,” Energy Policy 163 (2022): 112813, available at https://doi.org/10.1016/j.enpol.2022.112813.
  20. Rewiring America, “Bringing Infrastructure Home.”
  21. Jennifer Amann, Carolin Tolentino, and Dan York, “Toward More Equitable Energy Efficiency Programs for Underserved Households” (Washington: American Council for an Energy-Efficient Economy, 2023), available at https://www.aceee.org/research-report/b2301.
  22. Steve Rolfe and others, “Housing as a social determinant of health and wellbeing: developing an empirically-informed realist theoretical framework,” BMC Public Health 20 (1) (2020): 1138, available at https://doi.org/10.1186/s12889-020-09224-0.
  23. U.S. Department of Energy, “Reaching Households in Need of Home Energy Rebates,” available at https://www.energy.gov/scep/slsc/home-energy-rebate-program/reaching-households-need-home-energy-rebates (last accessed October 2023).
  24. Rewiring America, “Efficiency Maine: Secrets of Success,” YouTube, September 15, 2023, available at https://www.youtube.com/watch?v=_UhJYebsTp8; Efficiency Maine, “Home,” available at https://www.efficiencymaine.com/ (last accessed October 2023).
  25. State of Maine Governor’s Energy Office, “Energy Efficiency,” available at https://www.maine.gov/energy/initiatives/energy-efficiency (last accessed October 2023).
  26. Efficiency Maine, “About,” available at https://www.efficiencymaine.com/about/ (last accessed October 2023).
  27. Efficiency Maine, “Income-Based Eligibility Verification,” available at https://www.efficiencymaine.com/income-based-eligibility-verification/ (last accessed October 2023).
  28. Efficiency Maine, “Efficiency Maine and the Inflation Reduction Act of 2022 (‘IRA’)” (Augusta, ME: 2023), available at https://www.efficiencymaine.com/docs/Efficiency-Maine-and-IRA-Overview-2023-05.pdf.
  29. Efficiency Vermont, “Home,” available at https://www.efficiencyvermont.com (last accessed October 2023).
  30. Efficiency Vermont, “Find Your Rebates,” available at https://www.efficiencyvermont.com/rebates (last accessed October 2023).
  31. Vermont Building Performance Professionals Association, “Don’t Miss Out on Zero Energy Now! Cut Your Home’s Fossil Fuel Use Up to 100%,” available at https://zeroenergynowvt.com/wp-content/uploads/2021/12/TEP-One-Pager.pdf (last accessed October 2023); Andrew Winslow, “From Then to Now: A Look at Vermont’s Zero Energy Now Program Through the Years,” Northeast Energy Efficiency Partnerships, December 19, 2022, available at https://neep.org/blog/then-now-look-vermonts-zero-energy-now-program-through-years.
  32. Efficiency Vermont, “How the new climate law could help you save money,” October 4, 2022, available at https://www.efficiencyvermont.com/blog/our-insights/how-the-new-climate-law-could-help-you-save-money.
  33. Renewable Energy Alaska Project, “Initiatives,” available at https://alaskarenewableenergy.org/initiatives/ (last accessed October 2023).
  34. Alaska Housing Finance Corp., “Energy Efficiency NOW Conference Promotes Building Science,” March 28, 2017, available at https://www.ahfc.us/blog/posts/energy-efficiency-now-conference-promotes-building-science; Renewable Energy Alaska Project, “Energy Efficiency,” available at https://alaskarenewableenergy.org/ppf/energy-efficiency/ (last accessed October 2023).
  35. Renewable Energy Alaska Project, “Home Energy Tips,” available at https://alaskarenewableenergy.org/resources/home-energy-tips/ (last accessed October 2023); Renewable Energy Alaska Project, “How to Save Money and Reduce Energy Use: A Guide For Alaskan Homeowners,” available at https://alaskarenewableenergy.org/ppf/how-to-save-money-and-reduce-energy-use-a-guide-for-alaskan-homeowners/ (last accessed October 2023).
  36. Alaska Housing Finance Corp., “Alaska Residential Energy Rebates” available at https://www.ahfc.us/efficiency/programs-for-homeowners/alaska-residential-energy-rebates (last accessed October 2023).
  37. Alaska Housing Finance Corp., “Resource Information Center (RIC) Library,” available at https://www.ahfc.us/efficiency/education-and-events/research-information-center (last accessed October 2023).
  38. Alaska Housing Finance Corp., “Building and Energy Efficiency Information,” available at https://www.ahfc.us/efficiency/education-and-events/research-information-center/fact-sheets-and-information (last accessed October 2023).
  39. Alaska Native Tribal Health Consortium, “Home,” available at https://www.anthc.org/ (last accessed October 2023).
  40. Alaska Native Tribal Health Consortium, “Rural Energy Program,” available at https://www.anthc.org/what-we-do/rural-energy/rural-energy-initiative/ (last accessed October 2023).
  41. Energy Trust of Oregon, “Home,” available at https://www.energytrust.org/ (last accessed October 2023).
  42. Energy Trust of Oregon, “Benefits and Results,” available at https://www.energytrust.org/about/who-we-are/mission-vision-values/benefits-results/ (last accessed October 2023).
  43. Energy Trust of Oregon, “Home Assessment,” available at https://energytrust.clearesult.com/explore_app/ (last accessed October 2023).
  44. Energy Trust of Oregon, “DIY Resources and Cash Incentives,” available at https://www.energytrust.org/residential/incentives/ (last accessed October 2023).
  45. Energy Trust of Oregon, “Home Upgrades and Cash Incentives,” available at https://www.energytrust.org/residential/incentives-upgrades/ (last accessed October 2023).
  46. Energy Trust of Oregon, “Equipment Upgrades and Retrofits,” available at https://www.energytrust.org/programs/equipment-upgrades-retrofits/ (last accessed October 2023).
  47. Oregon Department of Energy, “Recent Federal Investments in Energy and Climate,” available at https://www.oregon.gov/energy/energy-oregon/Pages/IIJA.aspx (last accessed October 2023).
  48. Oregon Department of Energy, “Request for Information on the Inflation Reduction Act Home Efficiency and Electrification Rebate Programs (DE-FOA-0002981)” (Salem, OR: 2023), available at https://www.oregon.gov/energy/energy-oregon/Documents/2023-03-03-HOMES-HEEHR-RFI-Response.pdf.
  49. Ibid.
  50. Michigan Department of Environment, Great Lakes, and Energy, “Home,” available at https://www.michigan.gov/egle (last accessed October 2023).
  51. Michigan Department of Environment, Great Lakes, and Energy, “BIL and IRA Funding,” https://www.michigan.gov/egle/about/organization/materials-management/energy/bil-and-ira (last accessed October 2023).
  52. Michigan Department of Environment, Great Lakes, and Energy, “Community Energy Management Program,” available at https://www.michigan.gov/egle/about/organization/materials-management/energy/rfps-loans/community-energy-management-program (last accessed October 2023).
  53. Michigan Department of Environment, Great Lakes, and Energy, “MI Healthy Climate Plan,” available at https://www.michigan.gov/egle/about/organization/climate-and-energy/mi-healthy-climate-plan (last accessed October 2023).
  54. LegiScan, “California Senate Bill 755,” available at https://legiscan.com/CA/text/SB755/id/2833810 (last accessed October 2023).
  55. Ibid.
  56. California Energy Commission, “Inflation Reduction Act Residential Energy Rebate Programs in California,” available at https://www.energy.ca.gov/programs-and-topics/programs/inflation-reduction-act-residential-energy-rebate-programs-california (last accessed October 2023).
  57. Forest Bradley-Wright, “Energy Efficiency in the Southeast Annual Report: Federal Funding Adds to Tremendous Potential” (Knoxville, TN: Southern Alliance for Clean Energy, 2023), available at https://www.cleanenergy.org/blog/2023-ee-report/.
  58. North Caroline General Assembly, “House Bill 951 / SL 2021-165,” available at https://www.ncleg.gov/BillLookup/2021/H951 (last accessed October 2023).
  59. Duke Energy, “Smart $aver,” available at https://www.duke-energy.com/home/products/smart-saver (last accessed October 2023); Duke Energy, “Find It Duke,” available at https://p-micro.duke-energy.com/find-it-duke/ (last accessed October 2023).
  60. North Carolina Department of Environmental Quality, “Energy Efficiency Rebates,” available at https://www.deq.nc.gov/energy-climate/state-energy-office/inflation-reduction-act/energy-efficiency-rebates (last accessed October 2023).
  61. Central Pines Regional Council, “Areas of Focus,” available at https://www.centralpinesnc.gov/areas-focus (last accessed October 2023).
  62. North Carolina Department of Environmental Quality, “Energy Efficiency Focus Area Projects,” available at https://www.deq.nc.gov/energy-efficiency-focus-area-projects (last accessed October 2023).
  63. Illinois Environmental Protection Agency, “Office of Energy,” available at https://epa.illinois.gov/topics/energy.html (last accessed October 2023).
  64. Illinois Environmental Protection Agency, “Energy Rebates,” available at https://epa.illinois.gov/topics/energy/energy-rebates.html (last accessed October 2023).
  65. Smart Energy Design Assistance Center, “Home,” available at https://smartenergy.illinois.edu/ (last accessed October 2023).
  66. Smart Energy Design Assistance Center, “Energy Efficiency Services,” available at https://smartenergy.illinois.edu/energy-efficiency/ (last accessed October 2023); Smart Energy Design Assistance Center, “Who We Are,” available at https://smartenergy.illinois.edu/about/ (last accessed October 2023).
  67. Keep Warm Illinois, “Rebates,” available at https://keepwarm.illinois.gov/money-and-energy/rebates.html (last accessed October 2023).
  68. Illinois Environmental Protection Agency, “Energy Rebates”.
  69. Energy Smart Colorado, “Take Advantage of Tax Credits and Incentives,” available at https://energysmartcolorado.org/tax-credits-incentives/ (last accessed October 2023).
  70. Energy Smart Colorado, “About Energy Smart Colorado,” available at https://energysmartcolorado.org/about/ (last accessed October 2023).
  71. Energy Smart Colorado, “Energy Saving Rebates,” available at https://energysmartcolorado.org/rebates-for-your-home/ (last accessed October 2023).
  72. Energy Smart Colorado, “Take Advantage of Tax Credits and Incentives.”
  73. Office of State and Community Energy Programs, “Inflation Reduction Act Home Energy Rebates: Program Requirements and Application Instructions”; U.S. Department of Energy, “Justice40 Initiative,” available at https://www.energy.gov/diversity/justice40-initiative (last accessed October 2023).
  74. Office of State and Community Energy Programs, “Inflation Reduction Act Home Energy Rebates: Program Requirements and Application Instructions,” p. 51.
  75. Amann, Tolentino, and York, “Toward More Equitable Energy Efficiency Programs for Underserved Households.”
  76. Office of State and Community Energy Programs, “Inflation Reduction Act Home Energy Rebates: Program Requirements and Application Instructions,” pp. 21, 52.
  77. IRS, “Energy Efficient Home Improvement Credit,” available at https://www.irs.gov/credits-deductions/energy-efficient-home-improvement-credit (last accessed October 2023).
  78. The White House, “Executive Order on Tackling the Climate Crisis at Home and Abroad,” January 27, 2021, available at https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/27/executive-order-on-tackling-the-climate-crisis-at-home-and-abroad/.
  79. Office of State and Community Energy Programs, “Inflation Reduction Act Home Energy Rebates: Program Requirements and Application Instructions,” p. 56.
  80. Office of State and Community Energy Programs, “Inflation Reduction Act Home Energy Rebates: Program Requirements and Application Instructions.”
  81. Office of State and Community Energy Programs, “Inflation Reduction Act Home Energy Rebates: Program Requirements and Application Instructions, Appendix A: Required Allocations.”
  82. World Resources Institute, “How Cities Can Maximize Inflation Reduction Act Opportunities as Clean Energy Customers, Conveners and Catalysts,” July 25, 2023, available at https://www.wri.org/events/2023/7/how-cities-can-maximize-inflation-reduction-act-opportunities-clean-energy-customers.
  83. Lauren Shwisberg and Sarah Vorpahl, “What Happens When Utilities Start to Integrate the IRA into Planning?”, RMI, January 26, 2023, available at https://rmi.org/what-happens-when-utilities-start-to-integrate-the-ira-into-planning/.
  84. Steven Nadel, “How Utility Energy Efficiency Programs Can Use New Federal Funding,” American Council for an Energy-Efficient Economy, July 27, 2023, available at https://www.aceee.org/policy-brief/2023/07/how-utility-energy-efficiency-programs-can-use-new-federal-funding.
  85. Office of State and Community Energy Programs, “Inflation Reduction Act Home Energy Rebates: Program Requirements and Application Instructions.”
  86. U.S. Department of Energy, “Home Energy Rebates Frequently Asked Questions.”
  87. Ibid.
  88. U.S. Department of Energy, “Low-Income Community Energy Solutions,” available at https://www.energy.gov/scep/slsc/low-income-community-energy-solutions (last accessed October 2023); Audrey Henderson, “New appliances can help keep people in their homes, but upfront costs are a big obstacle,” Energy News Network, June 21, 2022, available at http://energynews.us/2022/06/21/new-appliances-can-help-keep-people-in-their-homes-but-upfront-costs-are-a-big-obstacle/; Amann, Tolentino, and York, “Toward More Equitable Energy Efficiency Programs for Underserved Households.”
  89. Office of State and Community Energy Programs, “Inflation Reduction Act Home Energy Rebates: Program Requirements and Application Instructions,”
  90. Office of State and Community Energy Programs, “Inflation Reduction Act Home Energy Rebates: Program Requirements and Application Instructions,” p. 47.
  91. Office of State and Community Energy Programs, “Inflation Reduction Act Home Energy Rebates: Program Requirements and Application Instructions, Program Requirements: Engage and Support a Skilled and Qualified Workforce,” p. 56.
  92. U.S. Department of Energy, “State-Based Home Energy Efficiency Contractor Training Grants,” available at https://www.energy.gov/scep/state-based-home-energy-efficiency-contractor-training-grants (last accessed October 2023).
  93. U.S. Department of Energy, “State-Based Home Energy Efficiency Contractor Training Grant Program – Administrative and Legal Requirements Document” (Washington: 2023), available at https://www.energy.gov/sites/default/files/2023-10/IRA-50123-ALRD_published-modification_10-12-23.pdf.
  94. Ibid.
  95. Swagger, “DOE IRA Rebate API,” available at https://sandbox.ira-rebates.labworks.org/api-doc/ (last accessed October 2023); Pacific Northwest National Laboratory, “Home Energy Rebate Tools,” available at https://www.pnnl.gov/projects/rebate-tools (last accessed October 2023).
  96. U.S. Department of Energy, “Rebate Processing and Tracking Tools” (Washington: 2023), p. 14, available at https://www.pnnl.gov/sites/default/files/media/file/Home%20Rebate%20Tools%20-%20Stakeholder%20presentation_%2006-22-2023.pdf.
  97. Office of State and Community Energy Programs, “Inflation Reduction Act Home Energy Rebates: Program Requirements and Application Instructions,” p. 58.
  98. U.S. Department of Energy, “Federal Programs Approved for Categorical Eligibility for DOE Home Energy Rebates (‘Recognized Programs’)” (Washington: 2023), available at https://www.energy.gov/scep/articles/ira-50121-50122-home-energy-rebates-categorical-eligibility-list.
  99. Rewiring America, “Your Savings Calculator,” available at https://www.rewiringamerica.org/app/ira-calculator (last accessed October 2023).
  100. Oregon Department of Energy, “Request for Information on the Inflation Reduction Act Home Efficiency and Electrification Rebate Programs (DE-FOA-0002981)”; Database of State Incentives for Renewables and Efficiency, “Home,” available at https://www.dsireusa.org/ (last accessed October 2023).
  101. Fannie Mae, “Area Median Income Lookup Tool,” available at https://ami-lookup-tool.fanniemae.com/amilookuptool/ (last accessed October 2023.

The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. A full list of supporters is available here. American Progress would like to acknowledge the many generous supporters who make our work possible.

Author

Jasia Smith

Research Associate, Domestic Climate Policy

Team

Domestic Climate

It’s time to build a 100 percent clean future, deliver on environmental justice, and empower workers to compete in the global clean energy economy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Just released!

Interactive: Mapping access to abortion by congressional district

Click here