Ready to Launch - DOE Guidance for IRA Home Energy Rebates

Guidance was recently released from the Department of Energy (DOE) around the $8.8 billion of Inflation Reduction Act (IRA) money for home energy efficiency and electrification rebates.

The IRA Home Energy Rebates provide a once-in-a-generation opportunity to deliver innovative efficiency and electrification programs to households across the United States. The overarching goal of the Home Energy Rebate programs is to accelerate the transition to more affordable, efficient, resilient, and low carbon homes through the following long-term outcomes:

Well-established exemplary and innovative efficiency and electrification programs. The program will achieve this through increased awareness and effective marketing to homeowners, adoption of innovative tools that streamline program experience, an expanded and sustained workforce that meets consumer demand, and effective integration of existing programs.

Lower energy burden for low-income households and disadvantaged communities. State programs will evolve and expand to meet the needs of all homes across the United States, with significant use of rebates by low-income households and disadvantaged communities.

Proven value streams and roles for sustained investments to continue market transformation. A successful program will prove the business case and catalyze a sustained increase in supplier participation and consumer demand for energy efficient and efficient electrification upgrades, including ongoing access to upgrades for low-income households and disadvantaged communities, while showcasing how a combination of Federal, utility, private, and public funds provide value to households and local communities during the transition to a clean energy economy.

Reduced pollution from buildings and support for the clean energy economy. The program will reduce pollution from building energy use, including harmful indoor air pollution, and support the clean energy economy through energy efficiency. States are encouraged to develop their own additional goals, outcomes, and objectives for their programs based on each State’s priorities, climate zone, utility costs, etc.

These investments will help decarbonize homes, which account for 13% of greenhouse gas emissions.

Rebates will be divided into two programs:
1. Home Efficiency Rebates Program (HOMES)
2. Home Electrification and Appliance Rebates Program (HEEHRA) – also known as the Electrification Rebates Program

The application process is already open and states can begin to apply. Applications are due by January 31, 2025 in order to secure funding. States can either request additional funding from its total formula allocation to continue its approved Quick Start program or submit an application to the DOE for a new program plan. If a state chooses to decline funds they must notify the DOE in writing by August 16, 2024. The declined funds will be redistributed to other State Energy Offices.

The DOE has a staggered application option to help states fully prepare their plan. States can submit through one comprehensive document or two complementary documents. The secondary document will include their State Application and State Implementation Blueprint.

There is also a Quick Start option. This option gives states the option to apply to use up to 25% of their allocated funds to establish a Quick Start program for HOMES and HEEHRA, and the DOE will prioritize processing these applications to allow the states to get the funds more quickly. To qualify, a state must include this request in its application and set a goal to launch its rebate program within 2023. A State Application for a Quick Start must include responses to all Application Requirements. All rebate program requirements, except low-income and low-income multifamily allocations, will apply to Quick Start programs.

The DOE’s focus is on providing rebates based on energy data whenever possible. A data-driven approach will lead to increased energy savings for customers and taxpapers because it enables modeled and measured programs that lead to greater accountability, virtual power plants, and more investment for comprehensive weatherization and electrification home retrofit projects. DOE guidance also focuses heavily on consistent program reporting and evaluation to ensure that market transformation, equity, and other goals are being met.

AEG is working with State Energy Offices to assist them in planning, applying for these grants, and launching these important and game-changing programs.