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A handful of states have provided rebates to consumers who make their homes more energy efficient, just months after New York became the first state to do so, in May.
Meanwhile, South Dakota officials in August turned down federal funding, which is tied to two new programs created by the Inflation Reduction Act, a landmark climate law signed into law in 2022.
The IRA reserved $8.8 billion for consumers through two Home Energy Rebates programs.
Consumers can access up to $8,000 of Home Efficiency Rebatesand up to $14,000 of Discounts on home electrification and household appliances.
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Together, the two rebate programs aim to cover – or in some cases fully offset – the cost of renovating homes and upgrading appliances to make them more energy efficient. Such adjustments can help consumers lower their utility bills while reducing carbon emissions that cause global warming, officials said.
The two programs have different rules that determine which consumers are eligible and how much money they can access. In some cases, rebates will depend on household income and the overall energy reduction of a home.
Nearly every state has indicated it will launch a resident rebate program, according to a U.S. Department of Energy spokesperson.
State officials had until August to officially decline the federal funds. They have a January 31, 2025 deadline submit a program application to the DOE.
South Dakota is the only state so far that has publicly signaled that it will not administer the rebates.
“In good faith, we have looked into this matter,” said Jim Terwilliger, commissioner of the South Dakota Bureau of Finance and Management. said on July 30 credits hearing. “We just don’t think it’s the right thing for South Dakota.”
Here are the states that applied
States, which administer federal funds, have some flexibility in program design. They must apply for financing and can distribute rebates to consumers once their application is approved.
new York launched the first phase of its discounts on May 30.
Five others – Arizona, Maine, New Mexico, Rhode Island and Wisconsin – have since launched discount programsalso, according to data from the US Department of Energy as of September 24.
“I expect there will be more and more,” said Kara Saul-Rinaldi, president and CEO of AnnDyl Policy Group, a consulting firm focused on climate and energy policy.
Many other states, as well as Washington, D.C., have submitted applications or had them approved, according to DOE data: California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Michigan, Minnesota, New Jersey, New Jersey. Hampshire, Massachusetts, North Carolina, Oregon, Tennessee, Vermont, Washington and West Virginia.
Together, these 26 states and the District of Columbia have requested a total of $4 billion in funding so far, the DOE said.
Rebates are a new program, and “implementing complex government programs like these takes time and coordination,” according to a DOE spokesperson.
“The Inflation Reduction Act places responsibility on states to design and implement home energy rebate programs tailored to their local needs,” the spokesperson wrote in an email. “As each state has different resources and capabilities, each state’s timeline will be different.”
South Dakota does not participate
South Dakota Governor Kristi Noem at the Republican National Convention on July 15, 2024.
Scott Olson | Getty Images News | Getty Images
However, South Dakota officials signaled in August that they would not participate, the only state to have refused federal funding for the rebate.
“South Dakota will play no role in facilitating the Green New Deal,” Ian Fury, a spokesperson for Gov. Kristi Noem, a Republican, said in an emailed statement.
States had a Deadline August 16, 2024 to officially refuse the funds.
“We do not believe that the administrative burden and expense of administering a program like this is the appropriate thing to do, and we generally disagree with that policy,” said Terwilliger, of the Bureau of South Dakota Finance and Management, in a July release. audience.
The Inflation Reduction Act allows states to use up to 20% of its financing for administrative purposes.
Fifty-one states and territories have requested advance administrative funding from the DOE, the agency said.
THE $68.6 million Federal money that had been set aside for South Dakota’s rebates will be redistributed among participating states.
Fury also noted that this isn’t the first time South Dakota has rejected federal spending. It was the only state to reject extended unemployment benefits in 2020 during the Covid-19 pandemic, Fury said.
The Green New Deal is a climate change policy initiative supported by Congressional Democrats around 2019. Bipartisan legislation to create an energy rebate program existed nearly a decade earlier, as Home Star Energy Renovation Act in 2010.
The concept of consumer rebates tied to energy efficiency “predates the Green New Deal by several years,” Saul-Rinaldi said.
Florida backtracks
It appears Florida officials have reversed course from their original stance on rebates.
Republican Gov. Ron DeSantis had vetoed the state’s authority in 2023 to spend about $5 million in federal funds to administer the energy rebate program. At the time, a spokesperson for the state’s Department of Agriculture and Consumer Services told CNBC that Florida would therefore not seek a rebate.
Florida Governor Ron DeSantis at the Republican National Convention on July 16, 2024.
Robert Gauthier | Los Angeles Times | Getty Images
Now Florida getting ready for a soft launch of rebate programs in late 2024 and a full launch in early 2025, according to information on a state website.
A spokesperson for the Department of Agriculture and Consumer Services did not respond to a request for comment on the change in position.
“Each state is approaching [its program] differently’
At a high level, consumers will be able to obtain rebates at the point of sale, when they purchase an appliance directly from a retailer or from a qualified contractor who is helping a household complete an energy efficiency project.
“Every state is approaching [its program] differently, for many reasons,” Saul-Rinaldi said.
Many are rolling them out in stages. For example, New Mexico begins with offering a $1,600 rebate for low-income consumers living in single-family homes who purchase insulation from a participating retailer.
Like other states, eligible New Mexico residents will later be able to access additional discounts such as:
- $8,000 for an ENERGY STAR certified electric heat pump for space heating and cooling;
- $4,000 for an electrical panel;
- $2,500 for electrical wiring;
- $1,750 for an ENERGY STAR certified electric heat pump water heater;
- $1,600 for air sealing; And
- $840 for an ENERGY STAR certified electric heat pump dryer and/or electric stove.
Consumers and business owners should check the state Department of Energy’s website to learn more about their specific programs and eligibility, Saul-Rinaldi said.
The U.S. Department of Energy suggests that households should not wait to make necessary home improvements or energy projects if their state has not officially implemented rebates. They may be eligible for other federal programs, “including tax creditsTHE Weatherization Assistance Programand others state, local, and utility programs“, the agency said.