DOE releases updated guidance for IRA Home Energy Rebate Programs

The Department of Energy has issued new rules for the $8.8 billion Home Energy Rebate Programs created under the Inflation Reduction Act. These rebates, known as HOMES and HEEHR, are meant to help homeowners pay for energy-efficiency and electrification upgrades, but most states have been stuck waiting for federal approval to launch their programs. The updated guidance is meant to clear that logjam. So far, twelve states and Washington, D.C. have started one or both programs; the rest have been in limbo.

One change worth knowing about: under HEEHR, rebates can no longer be used to switch from gas to electric appliances, such as replacing a gas water heater or stove with an electric one. Rebates now apply only to upgrading equipment that is already electric to a more efficient version. There is one exception — if you have a fossil-fuel heating and cooling system, you can still get a rebate to add a heat pump, as long as you keep the old system in place rather than removing it. The guidance also drops the previous rule requiring 40% of each state's rebate money to go to low-income households, though a separate rule reserving 10% for low-income multifamily buildings stays in place.

States with active programs now have until August 31 to update their plans to match these new rules. It's not yet clear how quickly other states will get approval to launch their own programs, so anyone hoping to use these rebates should watch for updates on what their own state offers.