New Government Programs in 2023 to Save Money on Energy

Electric heat pump clothes dryer

There are two new federal programs in 2023 that will help to lower the costs of home energy upgrades. Low and moderate income households will be able to receive up to $14,000, through rebates or tax credits, on the purchase on energy saving home appliances and other upgrades. Heat pump clothes dryer photo credit: Suzyj, Public domain via Wikimedia Commons

As part of the newly passed the Inflation Reduction Act there are two new federal programs that will help lower the costs of home energy upgrades by up to $14,000 through rebates or tax credits that are completed before September 30, 2031.

HOMES Rebate Program

The $4 billion HOMES rebate program, which isn’t expected to be widely available until around mid-2023, will offer up to $8,000 to consumers who lower their energy use through energy efficient upgrades to their home – such as by installing new insulation or upgrading their HVAC system. How much money they will be able to save will depend on their household income level and how much energy they save, which will have to be calculated.

Homeowners that can cut their energy use by 35% or more will be able to get up to $4,000 in direct rebates, while low to middle income households could get up to $8,000.

High Efficiency Electric Home Rebate Act (HEEHRA)

The 10-year, High-Efficiency Electric Home Rebate Act (HEEHRA) will help low to middle income families save money on their energy bills by providing point of sale rebates for purchasing efficient electric appliances. These rebates will occur at the time of sale as a discount when the purchase is made, look for more information in stores beginning in late 2022. Other home energy improvements, like upgrading the home’s electric wiring, also qualifies for HEEHRA.

For low income households, this program will cover 100 percent of the project costs (up to $14,000) and 50 percent of the costs (up to $14,000) for middle income homes. Households will have to earn 150% or less of their area’s median income to qualify for HEEHRA rebates.

Qualifying appliance and energy efficient upgrades and their rebates include:

• $8,000 – Heat pump (for heating and cooling)
• $4,000 – Electric load center upgrade/circuit panels
• $2,500 – Electrical wiring upgrade
• $1,750 – Heat pump water heater
• $1,600 – Insulation/sealing/ventilation
• $840 – Energy efficient electrical appliances including stoves/ovens/cooktops/clothes dryers

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The new incentives will take effect on January 1, 2023, and rebates will be administered by individual states. The U.S. Department of Energy should provide guidelines by around mid-2023, but it’s possible some states may not participate in the rebate program. Check with your state to see what energy policies and incentive programs are available to you, and start lining up contractors now for your home energy upgrade projects when these rebates and tax credit become available.


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