Home Energy Rebates

The federal Inflation Reduction Act and the Washington State Legislature will provide funds to support home improvements like energy efficiency and home electrification measures.

Federal initiatives and funding for decarbonizing buildings

Over the past two years, two major federal initiatives prioritized funding for decarbonizing buildings. The 2021 Infrastructure, Investment and Jobs Act (IIJA) (also referred to as the Bipartisan Infrastructure Law, or “BIL”) represents an investment of $1.2 trillion for expansive transportation and infrastructure spending. $107.5 billion of this funding is focused on energy, power, and grid reliability, including opportunities for building decarbonization, the advancement of codes, and bolstering of the buildings technologies workforce.

The 2022 Inflation Reduction Act (IRA) directs $500 billion towards accelerating clean energy investments and reducing carbon emissions, in addition to other healthcare and tax investments. The suite of buildings-related rebates and incentives under the IRA will support electrification and efficiency, with a special focus on low-income households. Households will be able to take advantage of a range of upfront rebates and tax credits towards energy efficient electric appliances and energy efficiency improvements in their homes.

Commerce’s Energy Office is working to make these resources available to households and other partners in a timely, equitable, and effective manner.

IRA Rebates

Washington expects to receive IRA funding for home energy improvement rebates in late 2023 or early 2024 and will begin to make these available in 2024. The Washington State Legislature also appropriated additional funding to support these programs.

The U.S. Department of Energy released guidelines on these programs on July 27, 2023. In the coming months, Commerce plans to conduct public listening sessions to determine how Washington’s rebate programs will be structured.

The State Energy Office will receive federal funding to develop a new high efficiency electric home rebate program. This new program will allow rebates at the point of sale for income-eligible consumers on a range of highly efficient electric equipment and electrification projects, including:

  • Heat pumps for space and water heating
  • Heat pump dryers
  • Electric stoves, cooktop range, or oven (includes induction)
  • Electric load service center upgrade
  • Insulation, air sealing, and ventilation
  • Electric wiring

Current Status: The DOE is expected to release funds to states in late 2023 or early 2024. Rebates are expected to be available in 2024. Commerce expects to combine this funding with additional funding allocated by the state legislature for the 2023-2025 biennium.

The State Energy Office will receive federal funding to develop and implement an efficiency rebate program, which will provide rebates to homeowners and aggregators for whole-house energy savings retrofits. Rebates will vary by depth of energy savings and income qualification.

Current Status: The DOE is expected to release funds to states in late 2023 or early 2024. Rebates are expected to be available in 2024.

Frequently Asked Questions (FAQs)

The Inflation Reduction Act introduced two new programs for home energy upgrades.

The first is for electrification rebates, sometimes referred to as the High Efficiency Electric Home Rebate Program (HEEHR), which will provide point-of-sale rebates to low- and moderate-income customers, defined as households with incomes up to 150% of Area Median Income, for home electrification measures, including heat pumps.

The second program is for efficiency rebates, also referred to as the Home Energy Performance Based, Whole House Rebates (HOMES) program. This program will grant funds to states, who will then develop rebate programs for whole-house energy saving retrofits.

At this time, Commerce expects rebates to be available in 2024. Commerce will develop the program throughout fall 2023, and federal funding is expected to be available in late 2023 or early 2024. It may take some time to establish contracts and program processes before money can be distributed to households.

Based on U.S. Department of Energy guidance, projects eligible for these rebates will be those initiated after the states have federal funding, meaning that eligible purchases will likely need to be made after the program officially launches in Washington. However, the federal tax credits renewed under the IRA are currently in effect, meaning purchases in 2023 qualify for these tax credits. You can find more information about tax credits on the clean energy tax credit webpage. If you have further questions, we recommend you consult a licensed tax professional for information that pertains to your situation.

While the IRA provides some federal guidelines for what products qualify and who may be eligible, the state of Washington will design its own program to distribute rebates. Until program design is complete, we cannot guarantee who will qualify when we begin providing rebates in 2024, or that sufficient funds will be available for all who apply. Commerce plans to hold listening sessions later this year to gather input from Washingtonians on how we should design these programs – please enter your email address in the subscribe box on the right-hand side of this webpage to receive notice when the sessions are scheduled.

Commerce expects to hold one or more listening sessions in fall 2023 — please enter your email address in the subscribe box on the right-hand side of this webpage to receive notice when the sessions are scheduled.

Commerce staff also welcome the opportunity to attend virtual or in-person community events to hear feedback from Washingtonians on what they are interested in with regards to these programs. Reach out to HomeRebates@Commerce.wa.gov to notify us of an upcoming event.

IRA Tax Credits

Tax credits under the IRA are made available through the Internal Revenue Service (IRS) and are available beginning in tax year 2023. For more on tax credits under IRA, please visit the US Department of Energy’s Clean Energy Tax Credit webpage.

Solar (electricity), fuel cells, wind turbines, and battery storage are eligible for a tax credit of 30% of the cost in tax years 2023-2032. See the US DOE’s Clean Energy Tax Credit webpage to find a list of eligible products and additional information.

  • Heat pumps, heat pump water heaters, and biomass stoves are eligible for a tax credit of 30% of the cost, up to $2,000 per year.
  • Geothermal heat pumps and solar (water heating) are eligible for tax credits of 30% of the cost.
  • Efficient air conditioners, heating, and water heating equipment is eligible for 30% of the cost, up to $600.

See the US DOE’s Clean Energy Tax Credit webpage to find a list of eligible products and additional information.

  • Electric panel or circuit upgrades for new electric equipment, and windows (including skylights) are eligible for a tax credit of 30% of cost, up to $600.
  • Exterior doors are eligible for a tax credit of 30% of cost, up to $250 each
  • Home energy audits are eligible for a tax credit of 30% of cost, up to $150.
  • Insulation materials are eligible for a tax credit for 30% of cost.

See the US DOE’s Clean Energy Tax Credit webpage to find a list of eligible services and additional information.

Resources

Events

We will be hosting public listening sessions in 2023 related to IRA Home Energy Rebates. Please subscribe to our mailing list to be notified of home energy rebate updates.

Contact

Liz Reichart, MPA, Sr. Energy Policy Specialist
Email: HomeRebates@Commerce.wa.gov

Subscribe

To sign up for updates or access your subscriber preferences, please enter your contact information below.