Rebates for home energy upgrades are coming soon. Here’s how to plan
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Americans who want to electrify their homes will soon have access to billions of dollars in federal incentives under the High-Efficiency Electric Home Rebate Act (HEEHRA). Low- and moderate-income households specifically will be able to fetch discounts that sharply reduce the cost of replacing polluting gas stoves and furnaces with cleaner electric appliances and heating systems.
The problem is, nobody knows exactly how soon those incentives will be made available. Congress passed HEEHRA last summer as part of the sweeping Inflation Reduction Act. But the U.S. Department of Energy isn’t expected to issue guidance on how states should implement the program until later this year. After that, state energy offices will still need to develop their own systems for administering benefits to eligible residents.
Households eager to save up to $8,000 on a new heat pump or shave up to $840 off the cost of an electric stove — two discounts offered under HEEHRA — have plenty they can do to prepare in the meantime.
Canary Media spoke with Jennifer Amann about what steps people can take today to smooth and accelerate the process of applying for and receiving rebates, whenever those are finally on offer. Amann is an expert on residential decarbonization and is a senior fellow in the American Council for an Energy-Efficient Economy’s building program in Washington, D.C.
“Now is a great time for people to be planning and thinking about what they might do” to electrify their homes, she said.
1. Find out if you’re eligible
The HEEHRA program provides up to $14,000 per household in point-of-purchase rebates 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. Rebates are available to both homeowners and renters.
Low-income households are defined as earning less than 80 percent of the median family income in their area. Moderate-income households earn 80 to 150 percent of their area’s median income for families. The U.S. 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.
2. 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, of course, can also 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. (Here’s how to apply.) The HEEHRA program will also provide discounts for weatherization projects at some point.
3. Make a list and check your 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 rebates covering 100 percent and 50 percent, 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 shiny new induction stove, Amann suggests that 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 (see above list), 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.
4. 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, say, 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, for instance, 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 percent 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 U.S. 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.
5. Expect speed bumps anyway
For all the ways that households can prepare, there are still many factors that could delay or complicate the process of electrifying their homes.
To start, the U.S. 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 (or grinding their teeth) 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, ultimately, to 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.”
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