U.S. Energy Department Estimates $1Billion in Annual Savings From Inflation Reduction Act’s Efficiency, Electrification Rebates

U.S. President Joe Biden, via the U.S. Energy Department, on Nov. 3 announced that around $9 billion will be accessible to states and tribes from the Inflation Reduction Act, or IRA, for consumer home energy rebate programs, allowing U.S. consumers to make homes more energy efficient, modernize electric appliances and reduce energy expenditures.

IRA programs will incorporate the fitting of clean energy equipment, such as heat pumps that will reduce energy expenses for U.S. families, lower reliance on fossil fuels, and assist the U.S. achieve Biden’s goal of insulating two million homes and the country’s climate objective of reducing greenhouse gas emissions by at least 50 percent by the end of 2030.

As it stands, the department values that the home energy efficiency and electrification consumer discounts approved will save consumers around $1 billion yearly. The IRA incorporates a number of tax incentives and financing to strengthen consumer home energy rebate programs which are vital for enhancing air quality and consumer health and reducing greenhouse gas emissions. Funding will be made accessible through states and tribes for consumer home energy rebate packages, centred on low-earning customers, this will allow people to electrify home appliances and execute energy efficient reconstructions.

States are expected to implement a number of programs, which include home energy performance based and whole house rebates. Allowances for energy efficiency reconstructions range from $2,000-$4,000 for households and up to $400,000 for multifamily structures. Moreover, maximum reimbursements for retrofits of low and modest earning households. High efficiency electric home rebate programs will develop a high efficiency electric home rebate program with $225 million earmarked for tribes. Moreover, the program incorporates a $14,000 cap per household, with a $8,000 cap for heat pump costs,  $1,750 for a heat pump water heater, and $4,000 for panel/service upgrade.

The department is expected to hold a number of listening conferences from Nov. 22 through until Jan. 2023 to connect with a wide range of stakeholders, including direct engagement with states and tribes, among others to discuss consumer rebate programs. Following these sessions, the department will issue a request for information for public comment at the start of 2023. Moreover, the department expects that the funding to states and tribes will be obtainable by Spring 2023, and the rebates will be available at a later date in 2023.