IMPLEMENTATION GUIDANCE FOR STATES: HOME EFFICIENCY REBATE PROGRAM

The Home Efficiency Rebate program, established by the Inflation Reduction Act, provides $4.3 billion to incentivize whole-home retrofits for single-family and multifamily dwellings. Funding is distributed to state energy offices (SEOs) via formula, with rebate amounts scaling based on energy savings and doubling for low-income households. The guide recommends that states avoid subsidizing new fossil fuel appliances, stack incentives, and prioritize low-income access by setting spending goals of 40% to 80% of program funds for these households. It also suggests providing upfront rebates and utilizing zero-interest loans for Low Income Housing Tax Credit (LIHTC) properties to avoid tax complications.

• The Home Efficiency Rebate program is a $4.3 billion initiative under the Inflation Reduction Act designed to incentivize whole-home retrofits for single-family and multifamily units, with funding allocated to state energy offices (SEOs) upon approval of a state program plan.
• Rebate amounts are determined by the level of building-wide energy savings and the income level of the household, with low-income rebates being double those of standard rebates. For example, single-family low-income households can receive up to $8,000 or 80% of project costs for savings of 35% or more.
• To maximize climate impact, the guide advises states to ensure that new fossil fuel appliances—such as gas ranges, clothes dryers, and space or water heaters—do not count toward the energy savings required to qualify for rebates.
• The guide recommends that states prioritize low-income households by setting measurable spending goals for program funding, suggesting a minimum of 40% to align with Justice40 goals, and ideally between 60% and 80%.
• For affordable housing utilizing Low Income Housing Tax Credit (LIHTC), the guide suggests providing zero-interest, long-term loans instead of rebates to prevent the funds from being treated as taxable income or reducing the property's eligible basis.
• States are encouraged to offer both 'measured' and 'modeled' pathways for calculating energy savings to provide market flexibility and support different business models, such as performance-based contracts.
• To reduce barriers for low-income participants, the guide recommends providing rebates upfront at the time of installation for modeled savings and minimizing income documentation through categorical eligibility based on other existing programs.

APA

RMI (2023). IMPLEMENTATION GUIDANCE FOR STATES: HOME EFFICIENCY REBATE PROGRAM. https://rmi.org/app/uploads/dlm_uploads/2023/02/home_efficiency_rebate_program.pdf

Chicago

RMI. IMPLEMENTATION GUIDANCE FOR STATES: HOME EFFICIENCY REBATE PROGRAM. 2023. https://rmi.org/app/uploads/dlm_uploads/2023/02/home_efficiency_rebate_program.pdf.

Wikipedia

{{cite report |author=RMI |title=IMPLEMENTATION GUIDANCE FOR STATES: HOME EFFICIENCY REBATE PROGRAM |date=February 2023 |url=https://rmi.org/app/uploads/dlm_uploads/2023/02/home_efficiency_rebate_program.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2023implementation, author = {{RMI}}, title = {{IMPLEMENTATION GUIDANCE FOR STATES: HOME EFFICIENCY REBATE PROGRAM}}, institution = {RMI}, year = {2023}, month = feb, url = {https://rmi.org/app/uploads/dlm_uploads/2023/02/home_efficiency_rebate_program.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }