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.

Inflation Reduction Act Home Energy Rebates

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The 2022 Inflation Reduction Act (IRA) directs $500 billion toward 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. Rebate programs are expected to be available to consumers later in 2024 or 2025.

IRA Rebates

Washington expects to receive IRA funding for home energy improvement rebates in 2024. The Washington State Legislature also appropriated additional funding to support investments in high-efficiency electric appliances for households and small businesses.

The U.S. Department of Energy released guidelines on these programs on July 27, 2023 and updated guidance on October 13, 2023. 

Following application to DOE, 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.

Current Status: The DOE is expected to release funds to Washington in 2024, following review of Washington’s application. IRA-funded rebates are expected to be available to consumers no earlier than mid-2024.

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 2024. Rebates are expected to be available no earlier than mid-2024.

Frequently Asked Questions (FAQs)

Here are the most frequently asked questions that Washington’s State Energy Office has received about these programs. Please submit other questions you have to HomeRebates@commerce.wa.gov, or review DOE’s Frequently Asked Questions page.

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. This program will grant funds to states, who will then develop rebate programs for home electrification measures.

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 commence program development in fall 2023, and federal funding is estimated to be available in 2024. It may take some time to establish contracts and program processes before money can be distributed to households.

For the Home Efficiency Rebate program it is unlikely that rebates will be retroactive: given the requirement that states must establish programs that ensure compliance with the law (e.g., eligibility of household, technology, program reporting) in addition to the state’s requirements, it will be difficult to offer rebates for projects completed before program requirements are fully defined and programs are operational. The federal law does not authorize states to offer Home Electrification and Appliance Rebates retroactively. If you have further questions, you can visit the DOE frequently asked questions website.

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 held listening sessions in the fall of 2023 on initial program design questions. Any future public events will be noticed through the Home Energy Rebate listserv – please enter your email address in the subscribe box on the right hand side of this webpage to receive notices.

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

The Washington State Energy Office is currently designing programs to determine household eligibility and how to verify income levels for income-qualified requirements. While the Inflation Reduction Act sets specific income qualification levels as a maximum ceiling for these programs, the State may choose to further target programs to ensure that the limited amount of funds are directed to those households most in need. It is likely that all of these rebates will be targeted to households with incomes less than 150% area median income (AMI) and entities that own multifamily buildings primarily serving lower incomes households. The State Energy Office is required to target a large portion of the funds toward low income households, defined as those with incomes less than 80% AMI. Until program design is complete, we cannot guarantee who will qualify when we begin providing rebates, or that sufficient funds will be available for all who apply.

To find information on AMI levels for specific areas of Washington and certain household levels, please review this resource on income limits from the U.S. Department of Housing and Urban Development. This resource is for fiscal year 2023; income limits may change for future years.

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.

Events

We have hosted public listening sessions related to IRA Home Energy Rebates. Please subscribe to our mailing list to be notified of home energy rebate updates and any future public engagement opportunities.

Contact

Home Energy Rebates Team
Email: HomeRebates@Commerce.wa.gov

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