Gaps and Barriers to Stacking Federal, State, and Local Incentives

This RMI report analyzes the barriers and gaps associated with 'stacking' (combining) federal, state, and local financial incentives for residential clean energy retrofits in the US. It identifies significant complexities in application processes, unclear guidance on the order of funding, and critical funding gaps for health and safety repairs and pre-electrification upgrades. The report provides a framework for program administrators to improve accessibility, particularly for low-income households, to ensure the Inflation Reduction Act (IRA) and other funds effectively drive decarbonization.

• Residents face significant barriers to stacking incentives, including the need to submit up to six different applications for a single project and a lack of comprehensive resources to guide them through the process.
• There are critical funding gaps for health and safety measures, cold climate heat pumps, and pre-electrification upgrades, which are necessary to make whole-home retrofits cost-effective and safe.
• Federal IRA tax credits (25C and 25D) generally allow stacking with other incentives, but utility subsidies and rebates must be applied first, reducing the cost basis for the tax credit.
• The Home Efficiency Rebate (HER) and Home Electrification and Appliance Rebate (HEAR) can be stacked for the same project, but cannot be used for the same individual efficiency or electrification measure.
• Low-income residents face a specific inequity because federal tax credits are neither transferable nor refundable, meaning those with low or no tax liability cannot access them.
• Application variability creates confusion due to differing performance standards (e.g., ENERGY STAR vs. CEE), varying qualified contractor lists, and inconsistent income eligibility requirements.
• RMI recommends three primary actions for program administrators: prioritizing funding for electric appliances and health/safety repairs, simplifying the stacking process through consolidated applications and public guidance, and prioritizing underserved communities and multi-family housing.

APA

RMI (2023). Gaps and Barriers to Stacking Federal, State, and Local Incentives. https://rmi.org/app/uploads/dlm_uploads/2023/12/stacking_federal_state_and_local_incentives.pdf

Chicago

RMI. Gaps and Barriers to Stacking Federal, State, and Local Incentives. 2023. https://rmi.org/app/uploads/dlm_uploads/2023/12/stacking_federal_state_and_local_incentives.pdf.

Wikipedia

{{cite report |author=RMI |title=Gaps and Barriers to Stacking Federal, State, and Local Incentives |date=December 2023 |url=https://rmi.org/app/uploads/dlm_uploads/2023/12/stacking_federal_state_and_local_incentives.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2023gaps, author = {{RMI}}, title = {{Gaps and Barriers to Stacking Federal, State, and Local Incentives}}, institution = {RMI}, year = {2023}, month = dec, url = {https://rmi.org/app/uploads/dlm_uploads/2023/12/stacking_federal_state_and_local_incentives.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }