While the IRA has something for everyone, the most extensive benefits are focused on low-and moderate-income customers (LMI). Traditionally, these folks pay much higher proportions of their household income toward electricity, and therefore, need the most help. Since many LMI communities also live in the least energy-efficient homes, the opportunity for energy savings is even greater. Consumers can potentially get up to $14,000 or more toward the partial or full cost of an efficiency project.

The IRA has allocated $8.8 billion for two initiatives: the Home Efficiency Rebates Program (previously HOMES), which offers up to $8,000, and the Home Electrification and Appliance Rebates Program (previously HEEHRA), which offers up to $14,000.

States and territories can apply to one or both of the IRA’s home energy rebate programs and will receive funding once the DOE approves their plans. Programs will be available until the funds are used entirely or September 30, 2031, whichever comes first.

A Quick Start Program lets states and territories who plan to launch their home energy rebate program in 2023 apply for up to 25% of their funding allocation. These applications will be prioritized for approvals by the DOE and are intended for states and territories that plan to use existing programs in the area to rapidly launch the new IRA rebates.

The DOE’s guidance strongly encourages states to collaborate with utilities and their energy efficiency programs, but it does not specifically require it. Existing utility program infrastructure, such as branding and outreach, qualified contractor networks, and rebate delivery should be strongly considered when developing an application. This is especially important for states and territories who want to launch in 2023 with a quick start program. 

State programs can choose between several verification options to confirm what level of rebates a household is eligible for based on income. Traditional income documentation, such as a Form 1040, is one option.

At the start of 2023, several home energy tax credits became available for consumers. This includes the Energy Efficiency Improvement Credit, often referred to as the 25C tax credit, that can save you 30% on qualifying upgrades. Many of these upgrades also qualify for home energy rebates funded by the IRA.

Previously known as HOMES, the Home Efficiency Rebates Program lets states and territories provide rebates to households for whole-house energy-saving retrofits.

Previously known as the High-Efficiency Electric Home Rebate Act (HEEHRA), the Home Electrification and Appliance Rebates Program helps low- and moderate-income (LMI) households save on energy-efficient electric home upgrades. 

The deadline for applications is January 31, 2025. States or territories must provide notice of their intent to apply by August 16, 2024, otherwise their allocation will be redistributed to other State Energy Offices that applied for funding. It’s important to keep in mind that the application process is complex, and it will likely be several weeks or months before many states and territories are ready to submit their program applications for DOE approval.