Home Energy Rebates programs will be most effective if program administrators design them to achieve specific goals. Programs will have different optimal designs depending on administrators’ goals. Programs are more likely to deliver on intended benefits and avoid unintended consequences if program administrators carefully consider how to optimize program design to meet their desired goals.
States may design programs based on their own policy objectives if they remain in compliance with statutory and Department of Energy (DOE) requirements. States should evaluate their policy objectives and optimize their program designs for those goals.
In general, DOE strongly urges states to use as much of their allocated funds as possible on rebates and use funds on administrative and direct costs as efficiently as possible. This recommendation is in the interest of driving as much impact as possible in terms of delivery of efficiency, cost, and emissions benefits for households.
Recommendations for Program Administrators
Each program has a diverse array of interested stakeholders that can help ensure program success. These stakeholders include prospective program participants, community representatives, industry partners, labor organizations, and policymakers. Programs should facilitate spaces for people across these groups to collaborate and co-create home energy rebate solutions. Program administrators and the resultant programs will benefit from varied expertise that includes both technical and community-based knowledge. Learn more about identifying program partners for new programs in DOE’s Residential Program Guide.
There are many right ways to design Home Energy Rebates programs, but not every program design will be optimal for specific goals. States can more effectively design programs by working with an advisory group to identify primary program goals. DOE recommends that programs identify key stakeholders that advise the program on its primary goals and priorities from the outset. Example primary program goals can include but are not limited to:
- Prioritize delivering measurable benefits for households demonstrating the highest need.
- Prioritize spurring durable market demand for locally supported energy efficiency and electrification technologies and products.
Many programs will be able to achieve some or all these goals to an extent, and choosing a goal should not mean that program administrators ignore other potential benefits. Choosing a primary goal that aligns with local priorities and fits with other programs in the region will elucidate elements of program design.
Some program design considerations will depend on a region’s housing stock, equipment supply chains, and climate conditions. Two programs with the same goals may still identify different optimal designs depending on these market and industry conditions. Learn more about setting program goals and objectives in DOE’s Residential Program Guide.
Identifying the right indicators to measure success will help inform program design and redesign over the next few years. Market transformation metrics might include changes in sales volume of energy-efficient products, variations in market share, different purchasing behavior, and changes in supply side dynamics.
Programs should consider how they will be able to periodically collect data to monitor metric performance over time. Programs may decide to prioritize maximizing any combination of the required metrics for program reporting, or identify additional metrics aligned with the program’s primary goals. Example metrics include:
- Number of homes receiving rebates
- Number of households with incomes below 80% AMI receiving rebates
- Number of households located in disadvantaged communities receiving rebates
- Number of single-family households receiving rebates
- Number of multifamily households receiving rebates
- Estimated energy savings attributable to home energy upgrades receiving rebates (e.g., BTUs, onsite fuels, electricity)
- Estimated percentage of annual energy used per home reduced from home energy upgrades receiving rebates
- Estimated energy cost savings attributable to home energy upgrades receiving rebates
- Estimated emissions savings attributable to home energy upgrades receiving rebates
Various assessments can help States ensure that their Home Energy Rebates program funds are used as effectively as possible and are not duplicating or undercutting existing, localized efforts. Program administrators should review and, when needed, create assessments that review local supply chains, labor market information, and existing housing programs. Before designing solutions, programs should consider the following questions:
- What is the current outlook of the local residential efficiency, retrofit, renovation, and construction sector?
- Through what pathways did the existing workforce access training and these jobs? What are existing training standards, credentialing standards, and labor standards?
- What are labor wage rates in this sector? How do these wages compare to those of jobs with similar training requirements and conditions?
- What are the high-priority needs of the housing and household types that the proposed program is seeking to serve?
Where current market conditions data is not readily available, programs may need to assess the current market to establish baseline conditions from which to compare changes. Learn more about assessing the existing market in DOE’s Residential Program Guide.
Through these assessments, programs may find that the Home Energy Rebates will be best deployed as a component of existing residential upgrade programs. When this is a feasible solution, programs should complement or expand upon existing programs to minimize market confusion and leverage existing program infrastructure.
Well-designed Home Energy Rebates programs will be designed to ensure participating households have a positive experience with the program. Home Energy Rebates programs should be easy for consumers to understand, interact with, and ultimately access to receive benefits. Consumers that have a positive experience with the program will help amplify the program’s success and impacts and help recruit others to the program. Learn more about human-centered design and prioritizing consumer experience from the U.S. Digital Service.
Common areas of inefficiency include repeated data entry, replication of databases, and system access limitations that pose increased burden on workers, contractors, implementers, and staff. States should invest in assessment, data, and reporting systems, including adoption of data standards, such that the program may operate more efficiently and effectively as a result.
For example, adoption of the Home Performance eXtensible Markup Language (HPXML) data standard can help programs better synthesize and analyze home energy data across program partners and streamline approval processes. States may choose to frontload investment in systems that save programs costs on labor, administration, overhead, and evaluation in the long run.
States may request to use a portion of their program funds to conduct marketing, outreach, and engagement with disadvantaged communities and households that may otherwise miss opportunities for rebates. Programs should also consider offering more comprehensive consumer support services than businesses in this sector may already provide. See more information about positioning a new program in the market.
All programs can be improved over time as everyone involved learns how to improve outcomes. Establishing clear systems that include collecting data and regularly monitoring collected data to inform program improvement will help minimize problems that may arise in program deployment. Data collection processes could involve questionnaires, interviews, web application programming interface (API) data aggregation, or analysis of secondary data.
Evaluations should not be seen as one-time events but rather as part of a continuous process of learning and enhancement. This implies monitoring progress over time, updating the evaluation methodology as required, and using findings to inform the design of future or related programs. Best practice involves continued monitoring of a market even after some market transformation goals have been achieved. Learn more about data collection and program evaluation in DOE’s Residential Program Guide.
Relevant Links
- Residential Program Guide: A searchable database of guidance, lessons learned, and best practices developed over the past decade since the American Recovery and Reinvestment Act (ARRA). Resources cover the following topic areas: (1) market position and business model, (2) program design and consumer experience, (3) evaluation and data collection, (4) marketing and outreach, (5) financing, and (6) contractor engagement and workforce development.
- Designing Equity-Focused Stakeholder Engagement to Inform State Energy Office Programs and Policies: A paper from the National Association of State Energy Officials (NASEO) published in 2020 that provides frameworks about how to engage with local communities meaningfully and sustainably.
- Technical Assistance to Help States Maximize Benefits from Home Energy Upgrades: A fact sheet that explains how to maximize impacts for your residents and provides best practices on delivering benefits to households.