Instant rebates! Hopefully.
Last month, we ran a campaign on home electrification incentives made available by the Inflation Reduction Act. (Refresher: the IRA is the landmark climate law passed by Congress in 2022). We contacted our elected officials to ask for help getting the word out about the upcoming incentives, which can save some households over $17k when making energy upgrades to their homes. Some of those incentives are tax credits, which are already up for grabs. But another category, instant point-of-sale rebates, are now available to be distributed. These rebates are key for providing financial assistance to the households that need it most.
When and how will rebates be distributed? 👀
While consumers will be able to directly claim rebates on purchases, the federal government is not issuing those rebates directly to consumers. Instead, Congress gave the U.S. Department of Energy (DOE) a big pot of $8.8 billion to spend on home electrification and energy efficiency rebates. From now until August 2024, the DOE will grant portions of that funding to U.S. states and territories on a rolling basis. Once a state or territory has been issued a portion of the grant, it will then be able to distribute rebates to consumers.
The catch? None of this will happen automatically.
States need to apply for those federally available rebate dollars by submitting compelling plans for how a rebate program in their state will catalyze a new electrification and energy efficiency market.
This won’t necessarily be an easy process for states. Most state energy offices—the agencies responsible for designing and implementing programs related to energy use—are understaffed or otherwise under-resourced. Applying for federal grants is onerous even under the best of circumstances, and it’s important that we as constituents give them all the encouragement they can get as the navigate the process.
Electrification vs. efficiency ⚡️
The rebates fall into two general categories: electrification and efficiency.
Electrification refers to how energy is being generated for home use. It’s the conversion of fossil gas- or oil-powered appliances, which can leak greenhouse gases and pollute your home, over to fully electric versions. Examples of eligible electric appliances include heat pumps (which control both heating and cooling), water heaters, clothes dryers, and stoves. Rebates targeting electrification are only available to low- and moderate-income households and can be stacked with other federal rebate programs to maximize cost savings.
Wonks out there might be asking: how do I know the generation of that electricity is clean (coming from something like a solar farm rather than a coal plant)? The answer is that in the U.S. in 2023, the generation source likely isn’t clean. But as the energy transition accelerates, and we are powering a greater share of our grid with zero-emissions technology, having a fully electrified home sets us up for 100% clean energy all the way up and down the supply chain. In fact, the IRA is projected to bring our power grid from 40% clean in 2023 to 66% clean in 2030. With efforts from states, executive action, and private industry, we might even be able to reach 80% in that same timeframe.
Energy efficiency refers to the ratio of energy required to produce a given output. An efficient home uses less energy than its historical counterparts to accomplish the same tasks, which means lower energy costs for the household. So the government is subsidizing upgrades that make home appliances and energy systems run more efficiently as well. Even high-income households can benefit from these rebates if they make upgrades that hit certain energy usage benchmarks.
Efficiency is important beyond cost-savings because it frees up electricity on the grid for others to use. As we electrify everything in our homes, demand for electricity will inevitably rise. Energy efficiency will be a huge factor in whether, and at what cost, utilities are able to meet that demand.
Sounds great, how can we help? 🙋♀️
You know the drill—state officials need to hear from you! It’s important to reach out and let them know you (a voting constituent!) want them to apply for the rebate funding. We can also connect them to resources that help simplify the process. For a deeper dive into home energy rebates, learn more in our Issue Briefing. Then get in on the action! Use our Action Plan anytime or join an Hour of Action to do it alongside other climate-concerned folks.
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