Department of Energy opens applications for $8.5 billion home energy efficiency rebates
Breanne Deppisch
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The Biden administration on Thursday launched its long-awaited $8.5 billion home energy efficiency rebate program, the first step in its effort to help consumers upgrade older, fossil fuel devices in favor of new and more energy-efficient models.
The program was created under the Inflation Reduction Act nearly a year ago.
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In order for consumers to qualify for the program, each state or territory must first apply to the program and meet DOE’s guidance for distributing the funds to residents.
After the application is approved, DOE will allocate a lump sum to applicants in amounts ranging from $50 million for smaller, less populated areas to $690 million for larger and more populous states.
The funds will help consumers insulate homes, install new appliances, and cover higher up-front costs of more efficient appliances such as heat pumps, heat pump water heaters, or other Energy Star appliances, DOE said in a statement.
Under the program, low-income households in some states will be eligible for up to $14,000 in rebates if they switch to more efficient devices.
“We expect these rebates will start to be available to consumers in some states as early as the end of this year and continuing on a rolling basis in 2024,” U.S. deputy energy secretary David Turk told reporters Thursday, though he added the timeline will depend largely on how quickly states and territories submit their applications and fulfill the necessary requirements.
DOE said the new rebate programs are expected to save consumers up to $1 billion in energy costs annually and will support some 50,000 jobs in the manufacturing and construction sectors, among others.
The announcement comes as the Biden administration looks to help consumers upgrade their appliances to more energy-efficient appliances, including heat pumps, clothes dryers, and costs of installation, which tack on thousands more in costs.
The IRA allocates $8.5 billion to create a Home Efficiency Rebates program, which offers $4.3 billion in grants to state energy offices to help slash upfront costs for efficiency upgrades, and $4.27 to create the Home Electrification and Appliance Rebate program, aimed at reducing the costs of efficient electric technologies. (It also allocates $225 million to tribes under a similar program.)
It’s possible that some Republican-led states could turn down the funds, though to date none have committed publicly to doing so.
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Asked about that possibility Thursday, Turk said the administration hopes “all our partners across the country” would view the program as a value add for their respective states and apply.