Last year, Congress passed the High-Efficiency Electric Home Rebate Act, which provides an assortment of incentives to encourage people to make their homes more efficient by switching to electric appliances and heat pumps. The benefits of the act are designed primarily to help low and middle income Americans lower their carbon footprint. Jeff Bezos and Elon Musk can buy their own induction stoves without any help from the taxpayers.
The US Department of Energy isn’t expected to issue guidance on how states should implement the rebate program until later this year. After that, state energy offices will still need to develop their own systems for administering benefits to eligible residents. In other words, it’s going to be a while before the rebates — which apply at the time of purchase — become available. But that doesn’t mean people can’t start planning for them now.
Recently, Canary Media spoke with Jennifer Amann, an expert on residential decarbonization and a senior fellow at the American Council for an Energy-Efficient Economy’s building program in Washington, DC, about what people can do today to take advantage of those rebate programs when they become available. “Now is a great time for people to be planning and thinking about what they might do” to electrify their homes, she said, and offered these five tips on things people can do now to prepare.
How To Prepare For Federal Rebate Programs
First, find out if you’re eligible: The HEEHRA program provides up to $14,000 per household point of purchase rebate for low and moderate income families who are looking to replace fossil fuel burning equipment such as oil boilers or gas clothes dryers with more efficient electricity powered units. Rebate programs are available to both homeowners and renters. Low income households are defined as earning less than 80% of the median family income in their area. Moderate income households earn 80 to 150% of their area’s median income for families.
The US Department of Housing and Urban Development has an online tool to help households determine which category they fall into. HEEHRA’s upfront discounts can be paired with federal energy efficiency and electrification tax credits, some of which became available on January 1. Still, Amman noted that low-income households might not owe enough in taxes to qualify for the credits. And other families might not have the financial flexibility to wait for months until the tax credits appear on their annual tax returns.
Second, take stock of your home: Leaky windows, thin wall insulation, inefficient light bulbs and poor ventilation can all increase a home’s energy consumption and raise utility bills. Figuring out where a home is losing energy and how to plug those gaps can not only help reduce a family’s monthly expenses. It can also enable them to potentially buy smaller appliances when it comes time to access HEEHRA rebates. “If your home is tight, you may be able to downsize your equipment and get a system that costs less [upfront], costs less to install and less to run,” Amann said.
A do-it-yourself assessment is the simplest way to pinpoint a home’s weak spots. The Department of Energy provides a thorough guide for inspecting every nook and cranny and, for those who can wield a screwdriver or caulk gun, some tips for quick fixes. Households should also contact their utilities to see what services (and financial incentives) are available for more professional energy assessments. Many utilities are increasingly offering virtual home audits that allow experts to spot flaws and identify efficiency improvements using FaceTime and other apps. In-person auditors use infrared cameras to measure insulation levels and perform blower door tests to see precisely how much air is entering or escaping from a home.
Major fixes can cost a lot of money. Both the Inflation Reduction Act and the Biden administration’s $1 trillion infrastructure law include significant new funding for the Department of Energy’s existing Weatherization Assistance Program, which helps low-income households to make energy-efficiency upgrades. Find out how to apply using this link. The HEEHRA program will also provide discounts for weatherization projects at some point.
Third, make a list and check your electrical panel: A quick survey of a home’s appliances can help a family decide which equipment they want or need to replace using HEEHRA rebates, and which appliances they should tackle first. According to the nonprofit Rewiring America, low and moderate income households can expect to see rebate programs that cover 100% and 50%, respectively, of the following items:
- Heat pump installation for heating-and-cooling system (up to $8,000)
- Heat pump water heater (up to $1,750)
- Heat pump clothes dryer (up to $840)
- Electric or induction stove (up to $840)
- Upgraded electrical wiring (up to $2,500)
- Upgraded electrical panel (up to $4,000)
- Home insulation, ventilation and sealing (up to $1,600)
Before residents go out and buy a new induction stove, Amann suggests they take a look at their electrical panel. Many older homes across the country have a 100-amp panel, which might not be able to handle the additional flow of electricity from new equipment. Most likely, a home will need a 200-amp panel and it’s better to know ahead of time how much time and money such an upgrade will require. “That’s something that can hold up your whole project,” she said, noting that families can solicit bids from electricians early on to plan and budget accordingly. A panel upgrade “is often the first hurdle you have to get over in going to a fully electrified home.”
Besides the HEEHRA rebates for panels and wiring, the Inflation Reduction Act separately offers tax credits for upgrades triggered by electrification projects. It’s not yet clear whether households that install new electric appliances today will be able to receive HEEHRA rebates retroactively. As such, Amann advises anyone considering ditching their old stoves, boilers, and dryers to wait until the discounts are officially available unless there’s an urgent need to replace equipment sooner.
Fourth, seek out other financial tools: While HEEHRA rebates offer significant savings, they likely won’t cover every single penny of a home electrification project. Households may still need to spend thousands of dollars, or tens of thousands of dollars, beyond the rebate offerings to install a ducted heat pump system or a heat pump water heater.
A growing number of state and local governments have established “green banks” and other programs to help low and moderate income households and individuals with low credit scores power their homes with clean energy and become more energy efficient. Connecticut offers a low interest Smart-E Loan with fixed monthly payments and no money down required. Maryland’s Clean Energy Advantage Loan Program offers loans with 0% financing for 12 months and reduced interest rates.
“We’re seeing more and more financing tools coming out to support these purchases,” Amann said. “It’s a great idea for people to start thinking about what opportunities may be available that they qualify for.” Such programs are likely to expand under the Inflation Reduction Act, which allocates $27 billion for a new grant program run by the US Environmental Protection Agency. Like the HEEHRA program, the finer details of when and how the money will be made available are still being finalized. But Amann said she expects a significant portion of the funding will go to support state green banks nationwide.
Fifth, expect speed bumps: For all the ways that households can prepare, there are still many factors that could delay or complicate the process of electrifying their homes. The US is facing a major shortage of electricians who can install heat pumps, induction stoves, and other clean energy equipment, as this recent Grist investigation explained. In the story, a duplex owner in Oakland, California described his ordeal in upgrading the electrical panel on his building. He said it took eight months between when the electrician first came by and when the project was finally completed. Homeowners and renters waiting for HEEHRA rebates will likely need to keep practicing patience as they seek out contractors to inspect, weatherize and electrify their dwellings.
Navigating the maze of available rebates, tax credits, low-interest loans, and other incentives offered by utility, state, and federal programs may likewise be a time consuming and confusing endeavor. Fortunately, organizations like ACEEE are launching new training and technical assistance initiatives to help contractors and community-based organizations to make sense of it all and help households to “stack and braid all these resources” together, Amann said. “As a nation, we need to make this transition to electrification,” she said. “And we need to take the extra steps to make sure that those least able to afford this transition are given the support they need to be part of it, as well.”
There are billions of dollars in incentives coming available soon, but navigating the process of identifying and qualifying for those incentives will take patience and determination. We trust the links provided above will help readers access all the rebates and incentives they are eligible for. It’s all about decarbonizing America, one heat pump and one induction stove at a time.
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