DOE now accepting applications for $8.5B home energy efficiency rebates.
The Biden Administration Launches $8.5 Billion Home Energy Efficiency Rebate Program
The Biden administration has taken a significant step towards promoting energy efficiency with the launch of its highly anticipated $8.5 billion home energy efficiency rebate program. This initiative aims to assist consumers in upgrading their outdated fossil fuel devices to newer, more energy-efficient models.
The program, which was established under the Inflation Reduction Act almost a year ago, requires each state or territory to apply and adhere to the Department of Energy’s (DOE) guidelines for distributing the funds to residents.
Upon approval of the application, the DOE will allocate a lump sum to applicants, ranging from $50 million for smaller areas to $690 million for larger states. These funds will enable consumers to insulate their homes, install new appliances, and cover the higher upfront costs associated with energy-efficient devices like heat pumps, heat pump water heaters, and other Energy Star appliances, according to a statement from the DOE.
Notably, low-income households in certain states may be eligible for rebates of up to $14,000 if they make the switch to more efficient devices.
“We expect these rebates to become available to consumers in select states by the end of this year, with a rolling basis implementation throughout 2024,” stated U.S. Deputy Energy Secretary David Turk during a press briefing on Thursday. However, he emphasized that the timeline is contingent on the prompt submission of applications and fulfillment of necessary requirements by states and territories.
The DOE estimates that these new rebate programs will save consumers up to $1 billion in energy costs annually and will create around 50,000 jobs in sectors such as manufacturing and construction.
This announcement aligns with the Biden administration’s commitment to assisting consumers in upgrading their appliances to more energy-efficient options, including heat pumps, clothes dryers, and installation costs, which can add thousands of dollars to the overall expense.
Under the Inflation Reduction Act, $8.5 billion has been allocated to establish the Home Efficiency Rebates program, providing $4.3 billion in grants to state energy offices to reduce upfront costs for efficiency upgrades. Additionally, $4.27 billion has been allocated to create the Home Electrification and Appliance Rebate program, aimed at lowering the costs of efficient electric technologies. (An additional $225 million has been allocated to tribes under a similar program.)
While it is possible that some Republican-led states may decline the funds, no public commitments to do so have been made thus far.
When asked about this possibility, Deputy Energy Secretary Turk expressed hope that “all our partners across the country” would recognize the value of the program for their respective states and apply.
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