Bidenomics to Save Americans Up to $1 Billion Annually in Energy Costs and Support Over 50,000 U.S. Jobs By Funding States and Territories to Develop Programs for Affordable Energy-Efficient Home Upgrades
WASHINGTON, D.C. — As part of Bidenomics and President Biden’s Investing in America agenda, the U.S. Department of Energy (DOE) today announced it is accepting applications for state and territory implementation of the two Home Energy Rebate programs created by the Inflation Reduction Act. These programs will provide $8.5 billion to states and territories to lower energy costs and increase efficiency in American homes by making home energy upgrades more affordable, while ensuring all communities have access to affordable, reliable, clean electricity and helping deliver on the President’s ambitious clean energy and climate goals.
The published Administrative and Legal Requirements Document (ALRD) offers full federal guidance and instructions for states and territories to apply for their allocation of the Home Energy Rebates programs. Rebates will be available to consumers only after states and territories apply for and receive their funds from the Department of Energy and launch their state rebate program.
"Energy savings and electrification upgrades like insulating your home, installing a heat pump, or upgrading to electric Energy Star appliances, lower monthly utility costs and lead to healthier homes,” said U.S. Secretary of Energy Jennifer M. Granholm. “Today’s announcement opens the application period for states and territories to apply for our groundbreaking $8.5 billion Home Energy Rebates programs. Americans living in energy efficient, electrified homes bring us one step closer to a clean, safer future."
To develop this ALRD, DOE worked diligently with stakeholders and integrated recommendations from over 2,000 pages of responses to the Request for Information posted in March, as well as various feedback sessions and consultations with state energy offices, electric utilities, energy efficiency experts, equipment manufacturers, consumer advocates, home contractors, and more. DOE is working to ensure these programs meet the specific needs from all types of communities around the country.
Funded by President Biden’s Inflation Reduction Act, 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 this 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.
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.
DOE has also asked states and territories to prioritize households that stand to benefit the most from these funds, including allocating at least half of the program funds to reach households with incomes at or below 80% of their area median income (AMI). Thanks to these programs, hundreds of thousands of households in need will benefit from free or reduced cost clean energy upgrades for their homes. DOE is also asking states to prepare Community Benefits Plans for their Home Energy Rebate programs to assure funds are invested in good jobs and real economic opportunities. These programs are an example of how Bidenomics is rebuilding the American economy from the middle out and the bottom up.
DOE will review submitted applications from states for the programs on a rolling basis.
Once the application is approved, States may launch their program for consumers in eligible households to begin funding improvements. In addition, many consumers can benefit today from tax credits for clean energy and energy efficient home improvements, also included in President Biden’s Inflation Reduction Act. Information about consumer clean energy tax credit eligibility can be found here.
Low-income households can also benefit from the DOE’s Weatherization Assistance Program, which offers free home efficiency upgrades for eligible households, and LIHEAP. The Home Energy Rebates will offer support and incentives for consumers to retrofit and electrify their homes, without banning or restricting the use of other technologies. While tribal guidance and funding is not yet available, DOE is working to ensure that tribal programs will have maximized benefits for tribal communities, including through the program’s Tribal Consultation.
DOE and the U.S. Department of Treasury have found that the Home Energy Rebate programs will be treated as a reduction in the purchase price or cost of property for eligible upgrades and projects, and consumers receiving an Inflation Reduction Act rebate will not be required to report the value of the rebate as income. Once the Home Energy Rebates are available, eligible rebate recipients may also claim a 25C tax credit for eligible products as applicable to the cost to the consumer after the rebate has been applied, if they have sufficient tax liability.. More information about Energy Efficient Home Improvement Tax Credits is available here.
In the coming weeks, DOE will provide an array of assistance to States and territories as they determine their next steps in developing rebate programs and submitting applications. DOE’s efforts to support states and territories will include:
- Example responses to applications questions, tailored to specific, optional rebate delivery mechanisms (e.g., weatherization programs, utility programs, other)
- Sample frameworks to guide development of effective rebate processing systems
- Technical assistance regarding use of DOE-centralized rebate initiation and tracking systems
- Analytical support regarding rebate program design impact on reaching specific housing, climate, or economic objectives
- Webinars, small group discussions, and one-on-one meetings on specific topics.
EPA’s EnergyStar Program will be supporting states and territories by:
- Partnering with them to educate American households about the benefits of a clean energy future and to activate them to take steps to upgrade their homes.
- Producing complimentary rebate-focused outreach and education materials for use by states or their implementors.
- Launching a new ENERGY STAR incentive-finder that will feature state-specific information on rebate-eligible products, authorized installers and will have the capability to connect customers to state rebate program fulfillment processes.
- Helping consumers with buying guidance and savings calculators for key products, including heat pumps and heat pump water heaters.
- Launching a new community-based initiative to educate low income households about available home upgrade resources and services.
To receive news about this assistance and other announcements from the Home Energy Rebate programs team as these efforts progress, sign up for email updates.
Through the Office of State and Community Energy Programs, DOE is overseeing the administration of these programs, and working to ensure that no communities are left behind in the transition to a clean energy future. These programs align with President Biden’s Justice40 Initiative, ensuring that 40 percent of the overall benefits of clean energy investments make a difference in communities that are energy burdened and historically underserved. For more information, visit the Home Energy Rebate programs website.