IMPLEMENTATION GUIDANCE FOR STATES: HOME EFFICIENCY REBATE PROGRAM

This guide by RMI provides implementation recommendations for state energy offices (SEOs) to design and deploy the Home Efficiency Rebate program established by the Inflation Reduction Act (IRA). The $4.3 billion program incentivizes whole-home retrofits for single-family and multifamily dwellings, with higher rebate amounts for greater energy savings and doubled benefits for low-income households.

• The Home Efficiency Rebate program, funded at $4.3 billion and distributed by formula, provides rebates to homeowners, multifamily building owners, or aggregators for whole-home retrofits. Rebate amounts are tiered based on energy savings (modeled or measured) and are doubled for low-income households, defined as those at 80% or below area median income (AMI). Additionally, contractors completing retrofits in "disadvantaged community" areas can receive a rebate of up to $200.
• To maximize the program's climate impact, RMI recommends that states avoid using rebates to subsidize new fossil fuel appliances, such as gas ranges or space heaters, to prevent locking in fossil fuel infrastructure for 10–20 years. States are also encouraged to align minimum equipment performance standards regionally to provide clear market signals to manufacturers and ensure the installation of efficient technology.
• RMI suggests that states implement both 'measured' and 'modeled' pathways for calculating energy savings to provide flexibility and allow for new business models, such as performance-based contracts. Modeled performance requires BPI-2400 compliant software, while measured performance requires approved open-source measurement and verification (M&V) software like OpenEE Meter.
• To improve access for low-income households, RMI recommends setting spending goals of at least 40% (aligning with Justice40) and ideally 60%–80% of program funding for this demographic. Other recommendations include providing rebates upfront to reduce cash flow burdens, minimizing income documentation through categorical eligibility, and implementing tenant protections to prevent inappropriate rent increases or displacement following upgrades.
• For affordable housing utilizing Low Income Housing Tax Credit (LIHTC), RMI advises providing zero-interest, long-term loans instead of rebates. This approach avoids treating the funds as taxable income for the partnership or reducing the eligible basis of the LIHTC property.
• State energy offices must submit a DOE-approved program plan to receive funding. These plans are legislatively mandated to include procedures for determining energy use reduction for modeled performance, a plan to value savings based on location, time, and greenhouse gas emissions, and a process for contractors in disadvantaged communities to claim rebates.

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} }