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Inflation Reduction Act Includes Federal Energy Retrofits Funds

Feb 9, 2023 GeneralProvidersRaters

Earlier this year Congress passed and President Biden signed into law the Inflation Reduction Act (IRA).

The legislation included the 10-year extension and reform of the 45L federal tax credit for energy-efficient homes.

RESNET was active in working with the House and Senate tax-writing committees on 45L reform and extension.

The IRA also included nearly $9 billion in funds to the U.S. Department of Energy (DOE) for state energy offices to support the energy and electrification retrofits of existing homes.

The two components of the program are

• Whole home energy performance-based, whole house rebates (The Home Owner Managing Energy Savings program) is allocated $4.3 billion for whole home energy retrofits for:
o  Tiered rebates for energy efficiency retrofits range from $2,000-$4,000 for individual households and up to $400,000 for multifamily buildings.
o  Grants to states to provide rebates for home retrofits.
o Up to $2,000 for retrofits reducing energy use by 20% or more, and up to $4,000 for retrofits saving 35% or more.
o The maximum amount of the rebates doubles for retrofits of low- and moderate-income homes.

• Electrification Rebate Program that allocates $4.5 billion to:
o   Includes point-of-sale rebates, administered by states.
o   Includes means testing and will provide 50% of the cost for incomes 80 to 150% of area median income, and 100% of the cost for incomes 80% of area medium income and below and similar tiers for multifamily buildings.
o  Includes a $14,000 cap per household, with an $8,000 cap for heat pump costs, $1,750 for a heat pump water heater, and $4,000 for panel/service upgrade.
o Other eligible rebates include electric stoves and clothes dryers, and insulation/air sealing measures.

The whole house energy rebates will require energy modeling to project energy savings. This can provide an opportunity for HERS® Raters.

The federal government will need to develop program guidelines for the two programs prior to releasing funding to state energy offices.

DOE announced that it will issue a Request for Information for public input on the funding in early 2023. DOE anticipates that the funding to states will be available by Spring 2023, and the rebates will be available to the public later in the year.

DOE has released the allocation of these funds to the state energy offices – https://www.energy.gov/articles/biden-harris-administration-announces-state-and-tribe-allocations-home-energy-rebate

It would be wise for individuals interested in taking advantage of this opportunity to begin a dialogue with their state energy offices.

For a listing and contact information on state energy offices go to https://www.naseo.org/members-states

RESNET is developing a web page dedicated to providing resources to its members on effectively communicating with their state energy offices that will be posted early in 2023.