Home Energy Efficiency Rebates
IRA creates a wide range of new and expanded incentives to help households make energy-saving improvements to their home. Energy-efficiency investments can help families reduce energy use and lower their utility bills, while also improving health and comfort. New technologies such as energy-efficient electric heat pumps and heat pump water heaters have the potential to save the average households as much as $6,500 in operating cost savings over the lifetime of the equipment, or $650 annually on their utility bills, while reducing exposure to volatile energy prices.
A new state program for low- and moderate-income households will provide instant rebates for new, efficient electric equipment, that in some cases will be enough to pay for the entire cost of the new equipment:
- up to $8,000 for a heat pump for heating and air conditioning,
- $1,750 for an efficient heat pump water, and
- $1,600 for improved insulation to prevent energy waste.
- A new state program for whole-home energy efficiency retrofit projects will provide rebates of up to $4,000 for retrofits that will save 35% of energy use or more, and $2,000 for retrofits that achieve savings of 20% or more. These rebates are double for low- and moderate-income homes.
- IRA also creates incentives for a range of new energy-efficient appliances and other energy improvements. These credits will take effect immediately, meaning households can claim the credit for purchases they make today. Households can also claim these credits multiple times, for instance if they buy new windows for the living room this year and for the dining room next year.
- Up to $2,000 for efficient heating, cooling, and water heating equipment, such as a heat pump.
- Up to $1,200 for measures that reduce home energy waste, like efficient windows, doors, and insulation.
- A $150 credit to help pay for an energy audit, allowing a local professional to produce tailored recommendations for how you can lower your energy costs with efficiency improvements.
The Home Energy Rebate Programs include:
- The Home Efficiency Rebates Program will offer $4,300,000,000 in formula grants to state energy offices to reduce the upfront cost of whole-home energy efficiency upgrades in single-family and multi-family homes. The value of an eligible home’s rebate depends on the predicted energy savings attributable to the project.
The Home Electrification and Appliance Rebates Program will offer $4,275,000,000 in formula grants to state energy offices to reduce the upfront cost of efficient electric technologies in single-family and multi-family homes.
- This program also provides $225,000,000 in grants to Indian tribes, however tribal guidance and application instructions are forthcoming through a separate, upcoming announcement.
The two Home Energy Rebate Programs will provide up to $8.5 billion for states and territories to develop, implement, and enhance residential energy efficiency and electrification programs in U.S. households, saving consumers up to $1 billion annually in energy costs, and supporting an estimated 50,000 U.S. jobs in residential construction, manufacturing, and other sectors. With the program guidance from the ALRD, states and territories can now design their programs to align with local needs and interests, in addition to preparing their workforce and educating the public on home upgrade opportunities that save households energy, money, and carbon emissions.
**Maximum rebated costs for Home Electrification Project Qualified Technologies
- ENERGY STAR electric heat pump water heater—up to $1,750
- ENERGY STAR electric heat pump for space heating & cooling—up to $8,000
- ENERGY STAR electric heat pump clothes dryer— up to $840
- ENERGY STAR electric stove, cooktop, range, or oven—up to $840
- Electric load service center—up to $4,000
- Electric wiring—up to $2,500
- Insulation, air sealing, and ventilation—up to $1,600
The Inflation Reduction Act sets some household eligibility requirements based on household income and the technologies being installed. Beyond these, states and territories may impose additional household eligibility restrictions based on additional criteria. For this reason, State Energy Offices are the best source of information regarding household eligibility.
Home Efficiency Rebates Program (Sec. 50121) & Home Electrification and Appliance Rebates Program (Sec. 50122)
Home Rebates FAQ page