Home Efficiency Rebates (HER)

Efficiency Rebates

The Home Efficiency Rebates (HER) are designed to reward energy efficiency retrofits that are modeled to achieve or have achieved verifiable minimum energy use reductions. A retrofit is an upgrade that makes your home more energy efficient. Eligible retrofits will probably include weatherization, space heating and cooling, and water heating, among other measures.

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Disclaimer: All values listed below are estimates. The rebates will be implemented differently in each state, so we cannot guarantee final amounts, eligibility, or timeline. Without additional appropriations from Congress, the rebate programs will end once their initial IRA funding is exhausted.

Upfront Discount

Up to $8,000, varies by state

Expected in 2025 or later

These rebates are not available yet. 

The rebates will roll out state by state, and the timing and structure of the rebates will vary. These programs will be tailored to the unique needs of each state, and may vary significantly in who is eligible, what projects are covered, what building types are supported, when the rebates will be available, and how people will claim rebates. The structure of the Efficiency Rebates are even more uncertain than the Electrification Rebates.

Based on the latest information, we think that most states will not launch their Efficiency Rebates until 2025 or later. But you can start preparing to take advantage of these rebates right now. 

Before your state’s program launches, you can:

  • Get an energy audit to understand how much you can save

  • Apply for tax credits for efficiency upgrades

  • If you have a lower income, you can apply for your state’s Weatherization Assistance Program to get assistance paying to improve the efficiency of your home

  • Check if your state or utility has any existing programs to help residents pay for efficiency upgrades. We will be adding more of these programs to our calculator in the coming months.

For the latest information about the rebates rollout and to track your state’s status, see the Home Energy Rebates page on the Department of Energy website.

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Continue reading to learn what we know so far about income eligibility, home upgrades, and how much you might save.

What are the Efficiency Rebates?

In the Inflation Reduction Act, the federal government created the Efficiency Rebates to reward energy efficiency retrofits.

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The Efficiency Rebates are not yet available, and when they do become available state-by-state, they will be performance-based, meaning that the level of rebate will be based on the modeled energy savings or measured energy savings achieved by the retrofit. 

Modeled savings means that an energy professional will gather information about your current home and run a simulation to show how much energy you are projected to save with eligible project upgrades. 

Measured savings means that you will submit bill and energy use data from your utility to show how much energy you have saved with eligible project upgrades.

Many details of the program will be determined by the states. Exact rebate amounts for modeled and measured savings may vary widely. Based on federal government guidance, performance levels and rebate amounts might match the chart below. We will update this information as we learn how state programs are designed.

Energy Savings: > 15% MeasuredSingle-Family Homes:$1000 per 10% energy savings or 50% of project costs Multifamily Buildings:$1000 per 10% energy savings per unit or 50% of project costs Low-income Home or Dwelling Unit:$2000 per 10% energy savings or 80% of project costs
Energy Savings:20% to 35% ModeledSingle-Family Homes:

$2000 or 50% of project costs (whichever is less)

Multifamily Buildings:

$2000 per unit or 50% of project costs (whichever is less)

Max $200,000 per building

Low-income Home or Dwelling Unit:

$4000 or 80% of project costs (whichever is less)

Energy Savings: > 35% ModeledSingle-Family Homes:

$4000 or 50% of project costs (whichever is less)

Multifamily Buildings:

$4000 per unit or 50% of project costs (whichever is less)

Max $400,000 per building

Low-income Home or Dwelling Unit:$8000 or 80% of project costs (whichever is less)

As designed in the legislation, the Efficiency Rebates are quite broad and could cover a range of homes.

  • Both multifamily and single-family homes are eligible

  • Owners and units with residents of all income levels can qualify, although higher rebate amounts are provided for low income homes (<80% of area median income)

  • Only retrofits of existing homes or units are eligible

However, the details and timing of how the Efficiency Rebates roll out are highly dependent on how the states choose to design their programs. A state could choose to allocate all their funding to multifamily or to low-income single-family homes.

Stay tuned for more about the details of individual state programs as they roll out over the next few years.

Because the Efficiency Rebates are dependent on modeled or actual energy savings, just about any energy efficiency improvement to a home might qualify, although since significant (>15%) energy savings are required in order to claim the rebates, most projects will likely focus on weatherization and building envelope improvements and improving the efficiency of large systems in the home like space heating and cooling and water heating.

The Efficiency Rebates can be claimed along with tax credits for the same project, although you should consult with your personal tax advisor for details. The Efficiency Rebates cannot be combined with the Electrification Rebates (or any other federal grant or rebate) for the same upgrade (e.g. a heat pump), but the two programs can be combined for different upgrades within the same home (e.g. heat pump and weatherization).

The details of how performance will be modeled and how actual energy reductions will be measured are still being finalized, but either option will involve specific criteria that must be met. We recommend working with a knowledgeable, participating contractor if you are seeking to claim an Efficiency Rebate. 

For states that allow a modeled energy savings approach, the energy modeling software used must be consistent with the BPI-2400 standard to estimate energy savings prior to the upgrades, and provide rebates for homes predicted to achieve a minimum of 20% energy savings.

For states that allow a measured energy savings approach, the method used to measure home energy savings post-installation must be approved by the Department of Energy. The method for collecting and verifying energy use for the measured savings track is still being determined. This will probably involve comparing utility bills before and after the upgrades.

For all homes, an energy audit will be required in order to produce an accurate baseline of energy use for the home.

The Efficiency Rebates should generally be implemented as upfront discounts applied on the contractor invoice for the efficiency upgrades. The contractor (or a third-party “aggregator”) should be reimbursed by the state after modeled or measured energy savings are verified. An aggregator is a company or nonprofit organization that basically assumes the administrative responsibility for processing the efficiency rebate—so contractors can focus on the installation. 

All the details of how reimbursement will work—and who will be approved to complete eligible projects—will be determined by officials in your state. 

Discover other incentives with the incentives calculator!

There are other incentives that you may qualify for. Our incentive calculator will show you a personalized list of incentives.

Go to Incentive Calculator

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