In August 2022, the Biden Administration signed into legislation the landmark Inflation-Reduction Act (PUBLIC LAW 117–169—AUG. 16, 2022). This legislation, in addition to billions in grant funding and tax credits, includes two categories of home rebates: Home Efficiency Rebates (HOMES) and Home Electrification and Appliance Rebates (HEAR).
Retrofitting single-family homes under HOMES has three distinct cases:
- Modeled energy system savings of not less than 20 percent but less than 35 percent
- Provides up to $2,000, or 50% of the project cost.
- Modeled energy system savings of not less than 35%
- Provides up to $4,000 or up to 50% of the project cost.
- Measured energy savings of not less than 15%
- Provide a payment rate per kilowatt hour saved, equal to the $2,000 for Case 1, or 50% of the project cost.
For multifamily buildings, these same cases and amounts apply, but Case 1 is capped at $200,000 and Case 2 is capped at $400,000. For single or multifamily homes where not less than 50% of the residents are low-income (by state definition), these dollar amounts are doubled and the percent of project cost is raised to 80% from 50%.
HEAR dollar amounts are a bit more straightforward. It provides flat rebate amounts for different appliances and non appliance upgrades:
- Up to $1,750 for a heat pump water heater
- Up to $8,000 for a heat pump for space heating or cooling
- Up to $840 for an electric stove, cooktop, range or oven, or an electric heat pump clothes dryer.
- Up to $4,000 for an electric load service center upgrade
- Up to $1,600 for insulation, air sealing, and ventilation
- Up to $2,500 for electric wiring
The total limit is $14,000. However, there are specific requirements to be considered an eligible entity for HEAR rebates. Outlined below are the three cases of eligibility under HEAR:
(ii) 100 percent of the cost of the qualified electrification project for a household the annual income of which is less than 80 percent of the area median income;
(i) 50 percent of the cost of the qualified electrification project for a multifamily building not less than 50 percent of the residents of which are households the annual income of which is not less than 80 percent and not greater than 150 percent of the area median income; and
(ii) 100 percent of the cost of the qualified electrification project for a multifamily building not less than 50 percent of the residents of which are households the annual income of which is less than 80 percent of the area median income; or
(i) 50 percent of the cost of the qualified electrification project for a household—
(I) on behalf of which the eligible entity is working; and
(II) the annual income of which is not less than 80 percent and not greater than 150 percent of the area median income; and
(ii) 100 percent of the cost of the qualified electrification project for a household—
(I) on behalf of which the eligible entity is working; and
(II) the annual income of which is less than 80% of the area median income.
Here in Missouri, we are not entirely sure how these programs will be rolled out; the state plans to submit their applications by January 2025 and have the rebates accessible by spring 2026. It is likely that local organizations will be funded to administer these programs. New York is the only state to currently have these IRA rebates available, and they provide a free home energy audit and assess retrofits and implementations through such local organizations. You can read more about other states’ program progress through this tracker.
Programs like this are almost never seamless. You may be thinking: How will low-income communities have equal access to this funding compared to more affluent and prepared communities? Our cities need density, how will multifamily housing be emphasized? Ultimately, it is paramount for local organizations and nonprofits to work together in this time leading up to release and ensure proper answers are available. Additionally, the Midwest Climate Collaborative, Washington University, and other financial and educational institutions are constantly working to optimize incentive stacking (Renew Missouri Navigator) and multi-sector collaboration so this process can be as streamlined as possible. Residents of St. Louis and other respective cities in this process should be engaged with their communities, local organizations, and institutions to engage and work towards the greater good of their region!
Additionally, there are other sources of funding such as local utility rebates, 25C and 45L tax credits, the Weatherization Assistance Program, many of which are listed in the Renew Missouri Navigator Tool linked above. Happy saving!