In August 2022, President Joe Biden signed the Inflation Reduction Act, establishing two Home Energy Rebates programs: The Home Efficiency Rebates Program and the Home Electrification and Appliance Rebates Program. Consumers, under the Act, can potentially receive up to $14,000 or more for the partial or full cost of an efficiency project. Though states must apply for the federal funds, Florida signaled it would not offer the rebates after Gov. Ron DeSantis issued a veto.
Consumers may soon be eligible to receive federal rebates of up to $14,000 for making energy-efficient improvements to their home. However, when these funds will become available and to what extent depends on the state in which one resides - some may choose not to offer the rebates at all. Part of the Inflation Reduction Act, which authorized $369 billion in spending on climate-related projects - the largest climate-related legislation of its kind in the US - the program consists of two rebate opportunities - the Home Efficiency Rebates Program and the Home Electrification and Appliance Rebates Program, each offering up to $8,000 and $14,000 respectively. These rebates are designed to partially - and in some cases fully - cover the cost of home improvement projects like installing insulation, an electric heat pump or an Energy Star appliance. The amount of the rebate is based on factors such as the cost of the project, household income and the total energy savings. According to Kara Saul Rinaldi, CEO and founder of AnnDyl Policy Group, "It's a first-of-its-kind program - we've never had federal rebates like them before." This legislation was signed into law by President Joe Biden in August 2022.
States must apply to the U.S. Department of Energy to receive their respective grants as allocated under the Inflation Reduction Act. The DOE issued guidance for program design when the application window opened on July 27. While it is uncertain when the money might start flowing to consumers, the earliest programs may begin issuing rebates close to the end of 2023, with many others following the same pattern in 2024, according to federal officials and energy policy experts. Amanda Finney, a U.S. Energy Department spokesperson, shared that households should expect to access some of the country's programs in much of the country by 2024. In contrast, Florida has expressed its intent to not use its $346 million of allocated funds, the highest of any state aside from California and Texas. The Governor vetoed spending authority from administrative funding totaling around $5 million, and it is unclear if the stance will shift if the funding becomes available again. The U.S. Energy Department spokesperson stated that the Florida Energy Office has not formally notified the Biden administration of their intent to decline the funds. With no Republican votes, the Inflation Reduction Act passed the House and Senate, and is a crucial part of President Biden's goal to reduce greenhouse-gas emissions and avert the most severe effects of climate change. As per Rinaldi, AnnDyl Policy Group's advisor, if politics does come into play then the funds may need to be reallocated to other states. The DOE must be informed of those states that do not want to participate by Aug. 16, 2024, and applications are due by Jan. 31, 2025.
Rebates referred to as Home Energy Rebates will be available until September 30th, 2031 (or until a state's funding runs out). Under most circumstances, individuals will not be able to get money through both rebate programs at once due to regulations against duplication of funds, experts note. However, some exemptions may permit claiming of additional monies when rebate programs are combined with clean energy credits still obtainable now. Jennifer Amann, a senior fellow in the American Council for an Energy-Efficient Economy's buildings program, remarked, "You can access tax credits even if the state [rebate] program hasn't been established yet."
It is historically true that the majority of clean-energy tax breaks have been more favorable to higher-income households. The credits are non-refundable, meaning that lower earners who lack a tax liability cannot benefit. However, it is possible to combine the new federal rebates with existing programs, such as the Weatherization Assistance Program, in order to get more money from the government. According to an analysis by the AnnDyl Policy Group, those with low incomes could receive up to $22,000; middle-income households could get up to around $19,000; and higher-income households could get more than $7,200. Furthermore, local utilities may also provide incentives and the associated rebate income limits will differ state-by-state and are tied to the median income in the area as designated by the Department of Housing and Urban Development. A "low-income household" is classified as one that earns 80% or less of the median income, while those with incomes between 80% and 150% are considered to have "moderate" incomes, and those earning over 150% have "market rate" incomes.
Low earners are generally eligible to receive larger rebates from the Home Efficiency Rebates Program based on the dollar value. Qualifying projects such as installing air conditioners, insulation, windows, doors and thermostats may be worth up to $4,000 or $8,000 if they are able to cut their energy use by 20% or 35%, respectively. The rebate amount is usually capped at 80% of the project's cost. Mid- and high-earners, meanwhile, can receive up to $2,000 and $4,000, savings-wise, at a capped rebate of 50% of the project cost. This comprehensive, performance-based program looks at the energy savings of the entire household, and those considering such a project should work with a contractor to assess their savings and determine which projects qualify.
The Home Electrification and Appliance Rebates Program offers monetary rebates for Energy Star appliances. For instance, customers may receive up to $1,750 for an electric heat pump water heater and $8,000 for an electric heat pump for space heating & cooling. An electric stove, cooktop, range, or oven can be purchased for $840, an electric load service center for $4,000, electric wiring for $2,500, and insulation, air sealing, and ventilation for $1,600. The U.S. Energy Department has capped the amount of the total rebate at $14,000 for qualifying consumers. Those with lower incomes are eligible for 100% of project costs, while middle earners may obtain up to 50%. The U.S. Energy Department also provides a list of frequently asked questions regarding the rebate programs and clean energy tax credits.
Comments