Two years after the landmark Inflation Reduction Act passed, the $8.5 billion initiative aimed at making homes more energy-efficient and electrified is gaining serious momentum. States like New York and Massachusetts have already kicked off funding for efficiency and electrification rebates, while others, such as Minnesota and Pennsylvania, are rolling out their plans to distribute funding by 2025. These early steps are setting the stage for a greener, more electrified future—and it's a future that's already beginning to take shape.
What’s Happening With the Money?
Under the IRA, funding is split across two main incentive programs: one focused on home efficiency upgrades and the other on home electrification. These programs—often abbreviated as HOMES (Home Energy Performance-Based, Whole-House Rebates) and HEAR (Home Electrification and Appliance Rebates)—are essentially identical in concept, though they may look slightly different from state to state.
These programs run in tandem, so homeowners can focus first on efficiency through building envelope measures—sealing up leaks, upgrading insulation, and fixing old wiring. Once that’s done, they can begin replacing their old appliances with new, electric-powered systems. The big focus here is on heat pumps and electric water heaters.
Why the Building Envelope Matters
The building envelope—which includes the walls, roof, windows, and doors—is key to making your home energy efficient. If you have drafty windows, poor insulation, or outdated wiring, your new electric appliances won’t work as effectively and could result in wasted energy and potentially even increase energy bills. The idea behind the two-pronged approach is simple: seal the house first, then electrify.
By structuring the rebates this way, the Department of Energy is addressing not only the aging appliances in most homes but also the dated infrastructure that often holds back energy efficiency. Importantly, a big chunk of the funding is directed to low- and middle-income households—those who typically can’t afford the upfront costs of these upgrades.
What Does This Mean for You?
The big win for many homeowners is that these rebates will make electrification and efficiency upgrades affordable. The Department of Energy made it clear that half of the funding for each rebate program is earmarked for households making less than 80% of the area median income (AMI)—a crucial step in ensuring that lower-income families can also benefit from this transition to clean energy.
This means that if you’re eligible, you could potentially get new appliances like heat pumps, electric stoves, or water heaters for little to no cost through these programs. Contractors and developers working on affordable housing projects can also take advantage of these rebates to make larger-scale residential projects greener and more energy-efficient.
A Broader Vision for Electrification
This isn’t just about homeowners—it’s about building a sustainable, electrified future for everyone. States are rolling out these rebates with an eye on reducing carbon emissions, cutting energy costs, and improving the overall energy performance of homes. And with UtilityGenius aiming to track these new rebates alongside existing commercial incentives, there’s even more opportunity for contractors to help homeowners and multi-family building owners save money while modernizing their properties.
“We’re excited to bring these state-level rebates into the UtilityGenius ecosystem,” says DeThomas. “We already track a wide range of commercial rebates, and this is a natural next step. Adding these IRA-funded rebates will help us give homeowners, contractors, and developers the tools they need to build a cleaner, greener economy.”
The Bottom Line: A Green Future for All
As more of these programs come online, the momentum is building for a future where energy efficiency and electrification aren’t just buzzwords—they’re realities. The Inflation Reduction Act is unlocking the potential for homeowners to upgrade their homes, reduce their carbon footprints, and save on utility bills. And for contractors, developers, and anyone involved in home renovation or construction, it’s a golden opportunity to be part of the green economy while passing those savings on to consumers.
With states now launching these rebate programs, there’s no better time than now to start taking advantage of the funding available. Whether you're a homeowner ready to electrify your appliances or a contractor looking to build energy-efficient homes, the future is looking cleaner and more affordable than ever.