Arizona Second State to Launch Home Energy Rebates Program Established by Inflation Reduction Act

The U.S. Energy Department on Aug. 29 announced Arizona’s launch of its first Home Energy Rebates Program established by the 2022 Inflation Reduction Act, or IRA. The first state to initiate the program was New York, which announced the program on May 30.  The launch is part of a wider national initiative to deliver $8.8 billion for states, territories, and tribes to lower energy expenses and enhance energy efficiency across homes by reducing the costs of installing heat pumps, insulation, and electrical panels.

Arizona’s program will permit additional low- and middle-income households to take advantage of efficiency and clean energy advancements that will allow households to save money on energy bills. Energy efficiency measures will help consumers save up to $1 billion yearly in energy expenditure and sustain around 50,000 jobs in manufacturing, construction and other critical sectors, according to the department. Moreover, the investments support the Justice40 initiative, which aims to deliver 40 percent of the benefits of certain federal climate, clean energy, and affordable housing, and other investments to disadvantaged households that are usually neglected due to a lack of investment and weighed down by pollution.

The department has allocated over $1.6 billion to states for the implementation of the federal Home Energy Rebate programs. Eleven states—Arizona, California, Hawaii, Indiana, Maine, Michigan, New Mexico, New York, Rhode Island, Washington, and Wisconsin—have received full funding to launch one or both rebate programs.

Individual families could save up to $14,000 for energy efficient home energy advancements, as well as hundreds of dollars on monthly energy expenditure. The department requires that states assign at least 50 percent of the rebates to low-income households (those earning 80 percent or less of their area median income). Moreover, states and territories must adhere to the Community Benefits Plans to guarantee good employment and economic opportunities.

Arizona is launching its Home Electrification and Appliance Rebates, or HEAR, program, one of two initiatives under the Federal Home Energy Rebate programs, in two phases. The first phase will prioritize the supply of heat pumps through an air-conditioning replacement program to tackle heat relief emergencies and financial hardships in partnership with regional community action agencies. In this phase, lower- and moderate-income single-family homeowners facing extreme heat can receive rebates of $4,000 to $8,000 for new heat pumps. The state plans to expand the HEAR program later this fall, offering up to $14,000 in rebates for equipment and appliance upgrades. The program will cover up to 100 percent of costs for lower-income families and up to 50 percent for moderate-income families.