President Joseph R. Biden signed the landmark Inflation Reduction Act into law on August 16, 2022. The law authorizes $391 billion in spending on energy and climate change, including roughly $35 billion clean energy investments managed through the U.S. Department of Energy (DOE). The Inflation Reduction Act represents the single largest investment in tackling the climate crisis and investing in clean energy in U.S. history.

The Inflation Reduction Act of 2022 includes two provisions authorizing $8.8 billion in rebates for home energy efficiency and electrification projects. These two provisions are:

• Section 50121: Home Energy Performance-Based, Whole House Rebates (Referred to as Home Efficiency Rebates).
• Section 50122: High-Efficiency Electric Home Rebate Program (Referred to as Home Electrification and Appliance Rebates).

Together, these provisions are referred to as the Home Energy Rebates. These provisions authorize the following:

• $4,300,000,000 in grants to State Energy Offices to carry out Home Efficiency Rebates. Section 50121 of the Inflation Reduction Act authorizes rebates based on the energy savings predicted from a home energy upgrade.
• $4,275,000,000 in grants to State Energy Offices to carry out Home Electrification and Appliance Rebates.  Section 50122 of the Inflation Reduction Act authorizes rebates based on purchase or installation of high-efficiency home appliances and equipment.
• $225,000,000 in grants to Indian Tribes to carry out Home Electrification and Appliance Rebates. Section 50122 of the Inflation Reduction Act authorizes rebates based on purchase or installation of high-efficiency home appliances and equipment.

Congress has structured these rebate programs to be administered by State Energy Offices and Indian Tribes, with the U.S. Department of Energy (DOE) providing guidance and oversight. A portion of funds authorized through the Inflation Reduction Act may be used by states and Indian Tribes to administer these programs. 

DOE is developing a timeline on fund distribution for these provisions and recognizes the importance of rapidly making funds available. DOE has the following tentative timeline for initial actions:

• Continue key stakeholder engagement activities to guide content for a Request for Information regarding these provisions.
• Release the Request for Information for public comment in January 2023.
• Receive and process information from the Request for Information through March 2023.
• Publish guidance to states and Indian Tribes in Summer 2023. 

No. Once DOE has made funds available to states and Indian Tribes, those entities will then be responsible for setting up and administering programs. 

Households looking for home energy retrofit assistance today cannot yet access these rebates, but may be eligible for other federal programs, including tax credits or the Weatherization Assistance Program, as well as other state, local, and utility programs.

Once DOE has made funds available to states and Indian Tribes, those entities will then be responsible for setting up and administering the programs that make the rebates accessible to households. It is likely that program rollouts will vary across states, but generally DOE expects households to be able to access these rebates in much of the country in late 2023/early 2024. 

The amount of money available for Home Energy Rebates varies depending on:

• Per-household rebate limits established by the law and program administrators
• What technology or technologies are being installed in the home, 
• Whether or not the project has estimated energy savings, and how those energy savings are calculated, 
• The household’s income, and
• The total project cost.

The table below summarizes the maximum allowed rebate amounts defined in the law for different types of home efficiency and electrification projects. Note that an installed technology may be eligible for rebates either because if its predicted energy savings or because of its inclusion on the qualified electrification project technologies list, but not for both reasons in a single household. 

*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 law specifies that home efficiency rebates are available to “individuals and aggregators carrying out energy efficiency upgrades of single-family homes… [and] multifamily buildings.” These rebates are available to households of any income. For households with a total annual income below 80 percent of the area median income, rebates can cover a higher percentage of the total project costs. 

The law also specifies that home electrification and appliance rebates are available to (1) low- or moderate-income households, (2) entities that own a multifamily building with low- or moderate-income households comprising at least 50 percent of the residents, and/or (3) organizations that are carrying out projects for low- or moderate-income households. A low- or moderate-income household is one where an individual or family which has a total annual income less than 150 percent of the median income of the area in which the individual or family resides. The Department of Housing and Urban Development reports area median income statistics across the United States. 

Home electrification and appliance rebates may cover up to 100% of a total qualified electrification project’s cost for households with a total annual income less than 80 percent of the area median income.

DOE recognizes the importance of coordinating various programs that will support homeowners and residents to maximize the benefits of these programs and protect against duplication of rebates for single projects, as required by Congress. Through guidance and technical assistance, DOE will support State Energy Offices and Indian Tribes in navigating how funds from these rebate programs may be coordinated with other new and existing programs and incentives. Some (illustrative, but not exhaustive) examples of these federal and state programs are listed below. 

• Home Energy Efficiency Tax Credits: There are currently available tax credits for many types of energy efficient home equipment and products. The IRA authorized an increase of tax credit incentives from 10% to 30% of project cost to begin starting January 1, 2023. Specific guidance related to these credits will be published by Department of Treasury and the Internal Revenue Service. Starting January 1, 2023, there will also be a new tax credit for electric panel upgrades. 
• Energy Efficiency Revolving Loan Fund Capitalization Grant Program: The Bipartisan Infrastructure Law includes $250 million for the establishment of the Energy Efficiency Revolving Loan Fund Capitalization Grant Program (EE RLF Program) for energy efficiency retrofits in U.S. homes and commercial buildings. 
• Weatherization Assistance Program: This program began in 1976 and helps low-income households reduce their energy costs by increasing home energy efficiency. In addition to annual appropriations, the Bipartisan Infrastructure Law authorized $3.16 billion for Weatherization Assistance Program home retrofits. Households with an annual income less than 200% the federal poverty level may be eligible for this program. 

For existing utility programs, DOE is collaborating with utilities to better understand how the program guidance can be developed to provide integrated and streamlined offerings. To learn if you are currently eligible for rebates through utility programs, contact your local utility. 

The funding to be allocated to the states through their State Energy Offices can be found in these two provisions. DOE has not yet released information on the amount of funds individual Indian Tribes may access through these provisions. 

The law specifies that DOE shall reserve funds for each State Energy Office in accordance with the allocation formula for the State Energy Program (SEP) in effect on January 1, 2022. Read more about the SEP allocation formula. 

For the home electrification and appliance rebates, the law specifies that DOE shall reserve funds for Indian Tribes in a manner determined appropriate by the Secretary. No determination has been made regarding the implementation of this subclause at this time, and DOE will seek consultation with Indian Tribes through this determination process. In the context of this rebate program. The law also specifies that the term “Indian Tribe” has the meaning given to the term in the Indian Self-Determination and Education Assistance Act (25 U.S.C. 5304(e)).

Formula funds for each State Energy Office and Indian Tribe will be reserved and awarded depending on the successful submission of complete applications to DOE. 

The Inflation Reduction Act authorizes states to provide rebates for Home Efficiency Rebates begun on or after enactment of the law. Given that states must establish programs that ensure compliance with the law (e.g., eligibility of household, technology, program reporting), it will be difficult to offer rebates for projects completed before program requirements are fully defined and programs are in place.  

If a state is interested in offering rebates retroactively – that is, for projects completed before the state’s program is established, the state’s application to DOE will need to outline how the state will determine if these projects meet all program requirements.  DOE plans to issue program guidelines in Spring 2023, after which states can submit their applications for DOE’s review. 

The law does not authorize States to offer Home Electrification and Appliance Rebates retroactively. 

Qualified electrification projects under Section 50122 (Home Electrification and Appliance Rebates) include the purchase and installation of at least one of the following upgrades:

• ENERGY STAR electric heat pump water heater
• ENERGY STAR electric heat pump for space heating and cooling
• ENERGY STAR electric heat pump clothes dryer
• Electric load service center
• Electric stove, cooktop, range, or oven
• Insulation
• Air sealing and materials to improve ventilation
• Electric wiring 

The U.S. Environmental Protection Agency has a fact sheet on ENERGY STAR Certifications that are relevant to the Home Electrification and Appliance Rebates. 

DOE intends to post a Request for Information and will include a question about other technologies that State Energy Offices and Indian Tribes may be interested to include with installations of listed technologies.

DOE staff is identifying outreach opportunities, including participation in conferences and stakeholder-led meetings. A series of listening sessions will occur in January 2023, when the Request for Information is anticipated to be released (see FAQ #4). DOE is committed to engaging a wide array of organizations, including direct engagement with states and Indian Tribes, to collect input on program design.

Questions about these rebate programs can be sent to IRAHomeRebates@hq.doe.gov.