While the IRA has something for everyone, the most extensive benefits are focused on low-and moderate-income customers (LMI). Traditionally, these folks pay much higher proportions of their household income toward electricity, and therefore, need the most help. Since many LMI communities also live in the least energy-efficient homes, the opportunity for energy savings is even greater. Every improvement made will reduce energy demands, giving utilities a much-needed break.

The funding for most energy efficiency incentives will be distributed on a local level by state energy offices. Each state will have the opportunity to apply or request funds to support the IRA legislation. The details of the application process have not yet been determined. This is different from the 2008 American Recovery and Re-investment Act (ARRA) where states were directly allocated funds.

The implications for utilities will vary state by state. In some states, utilities already collaborate closely with state energy offices and will be able to leverage each other's best practices to roll out the new initiatives and programs successfully.  

Timelines and commitments are still being determined. Legislators are optimistic that the state energy office application process will start in early 2023, and incentives will begin rolling out to customers in the second half of 2023. Stay tuned for more updates—we’re just as eager to learn more.

The bill referenced two different standards, and it’s not yet clear if one or both will be adopted. Most state energy offices and utilities already have standard approaches for confirming customers’ income and benefits. It’s likely the Department of Energy will simply leverage existing standards used in the marketplace.

“Double dipping” is an industry term for when customers receive different rebates for the same work. The IRA specifically says that customers will not be able to access rebates from both the “HOMES Rebate Program” and “The High-Efficiency Electric Home Rebate Program” for the same measure or work. However, people will likely be able to claim tax credits, in addition to the rebates.

All the programs and initiatives established through the IRA will be designed to help lower your energy costs and make it easier to transition to cleaner, more sustainable energy choices. The IRA specifically provides:

• Direct funding for energy efficiency improvements

• A path to create new state rebate programs

• Plans for contractor training grants

• Modified, extended and new tax credits for a variety of energy conservation methods and alternative energy sources

There is new program funding through two residential energy efficiency and electrification programs—the Homeowner Managing Energy Savings (HOMES) Rebate Program and the High-Efficiency Electric Home Rebate (HEEHR) Program.