Federal rebates are coming. Are you eligible?
The federal Inflation Reduction Act (IRA) created two programs that will offer unprecedented support for certain types of home electrification projects:
- The Home Efficiency Rebates (HOMES) Program funds whole house energy efficiency retrofits.
- HOMES rebates may offer $2,000 - $7,000, depending on total energy savings, with larger amounts for those earning less than 80% of the Area Median Income (AMI). You can look up your AMI here.
- HOMES rebates may offer $2,000 - $7,000, depending on total energy savings, with larger amounts for those earning less than 80% of the Area Median Income (AMI). You can look up your AMI here.
- The Home Electrification and Appliance Rebates (HEAR) Program helps low-to-moderate-income households “go electric” through qualified appliance rebates.
- HEAR rebates will be available to those earning less than 150% of the AMI, and may offer up to $14,000 for home electrification, including $8,000 for heat pumps, $4,000 for electrical work, $1,750 for heat pump water heaters, and lesser amounts for other upgrades.
Note: The IRA rebates are different from the federal tax credits, which are already available and are not income-limited. The Energy Efficient Home Improvement Credit provides a tax credit of 30% for eligible eligible expenses such as heat pumps.
Availability of Rebates
The rollout of these programs varies by state, with California expected to start offering rebates by the end of 2024. As of mid-2024, the state is finalizing the guidelines and infrastructure necessary to distribute these rebates effectively.
Keep an eye on announcements from your local utility providers for specific launch dates and application details. You can also receive email updates on tax credits and rebates by signing up via the White House Clean Energy webpage.
It's worth noting that although the programs may seem well funded, with tens of millions of homes in the US replacing gas with electricity, the programs will likely run out of funds within a few years of implementation.
About the Rebates Programs
While the broad scope of the programs has been defined, the states still have significant leeway in implementing the programs, including targeting the money toward specific project types or populations. We don’t yet know what the rules will look like in California.
HOMES Program
The HOMES program offers incentives to homeowners who undertake energy-efficient home improvements. The amount of the rebate is based on the energy savings achieved by the retrofit, encouraging comprehensive upgrades that maximize energy efficiency. This program aims to make significant inroads in reducing energy consumption and greenhouse gas emissions, contributing to a more sustainable future.
HEAR Program
The HEAR Program provides point-of-sale rebates for the installation of high-efficiency electric appliances. This includes heat pumps, electric stoves, and electric water heaters. The goal of HEAR is to facilitate the transition to electric appliances, which are often more energy-efficient and environmentally friendly compared to their gas-powered counterparts.
The United States Department of Energy (DOE) estimates the programs will save American households up to $1 billion on energy bills each year and support over 50,000 U.S. jobs. 1
Determine your Eligibility for IRA Rebates
You can do a basic qualification check using the Rewiring America calculator, though it doesn’t account for state-specific implementation rules that may include additional eligibility requirements.
Determining eligibility for the HOMES and HEAR programs involves a few straightforward steps:
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Income Verification:
- HOMES Program: Generally, all homeowners are eligible, but higher rebates are available for low- and middle-income households.
- HEAR Program: This program specifically targets low- and middle-income households. Homeowners need to provide income documentation to qualify for higher rebate amounts.
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Home Energy Assessment:
- Conduct a home energy assessment to identify potential improvements and estimate the energy savings from proposed upgrades. Some utility companies offer free or subsidized energy assessments. We recommend using QuitCarbon's free home energy assessment here.
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Approved Contractors:
- Work with contractors approved by the respective programs. These contractors are familiar with the requirements and can ensure that the upgrades meet the necessary standards for the rebates. QuitCarbon works with vetted and qualified contractors – request a referral here.
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Application Process:
- Once the programs are officially launched, homeowners will need to submit an application through the designated state or utility program portals. Keeping documentation of all improvements and costs will streamline this process.
Plan the Timing of Your Home Energy Upgrades
IRA rebates will not be retroactive, and will only be available after a state’s program has launched.
In deciding how to time electrification work, you will need to weigh your personal finances against the remaining uncertainties in program requirements. QuitCarbon will analyze your specifics and craft a plan of action for your home. Then we'll help you electrify with ease and savings, on the timeline that works for you.
Additional Resources
For further information, explore the following resources:
- California Energy Commission (CEC): www.energy.ca.gov
- U.S. Department of Energy (DOE): www.energy.gov
- Home Energy Saver: www.homeenergysaver.lbl.gov
- DSIRE (Database of State Incentives for Renewables & Efficiency): www.dsireusa.org
- Local Utility Providers: Check your utility provider’s website for specific information and updates regarding the rebates.
1 https://www.energy.gov/scep/home-energy-rebates-programs
