FAQ: IRA Residential Efficiency and Electrification Rebates

The Inflation Reduction Act (IRA) provides states with funding for the Home Energy Rebates Programs which consist of 1) Home Efficiency Rebates (HOMES) and 2) Home Electrification and Appliance Rebates (HEEHRA). The U.S. Department of Energy estimates the rebates will support more than 50,000 jobs and save Americans $1 billion every year by lowering energy bills. Even though the IRA authorizes funding for states, each state must submit a comprehensive application to the U.S Department of Energy to receive and spend/disburse the funding.

California is one of the first states in the U.S. to apply for Home Electrification and Appliance Rebates (HEEHRA), funded through the Federal Inflation Reduction Act (IRA).

Even though the IRA legislation sets aside money for states and territories, each state must apply for and receive the U.S. Department of Energy’s approval prior to launching its Home Energy Rebate Programs. The U.S. Department of Energy released updated program guidance to states in July 2023 and October 2023, and the CEC submitted an application for its allocated funding on January 12, 2024.

The U.S. Department of Energy is reviewing California’s application for the HEEHRA Program. At this time, no IRA-funded home rebates are available. Californians are expected to be able to apply for HEEHRA rebates in 2024.

For the Home Efficiency Program (HOMES), the CEC published a Request for Information in December 2023 to collect public input, and plans a public workshop in spring 2024. The CEC expects to submit an application to the U.S. Department of Energy later in 2024 and launch the program in 2025.

To learn about workshop details and other program updates, please subscribe to the program subscription list.

The CEC submitted an application to the U.S. Department of Energy for the Home Electrification and Appliance Rebates (HEEHRA) Program January 12, 2024. The CEC will seek public input on the development and implementation of its HEEHRA Program and expects to hold workshops in 2024.

The CEC released a Request for Information in December 2023 to seek public input on its plan to incorporate California’s Home Efficiency Rebates (HOMES) funding with the Equitable Building Decarbonization Direct Install Program. The CEC plans a public workshop on HOMES in spring 2024 and plans to submit an application to the U.S. Department of Energy later in 2024.

Subscribe on this page for announcements about requests for information and workshops.

Additionally, the CEC welcomes public comments on the Inflation Reduction Act (IRA) Residential Energy Rebate Programs at any time. Comments may be submitted to the docket at 23-DECARB-01.

Federal statute does not authorize states to offer rebates retroactively for Home Electrification and Appliance Rebates (HEEHRA) under the Inflation Reduction Act (IRA).

For Home Efficiency Rebates (HOMES), the IRA authorizes states to provide rebates for projects begun on or after enactment of the law on August 16, 2022, and completed by no later than Sept. 30, 2031. However, given the requirement that states must establish programs that ensure compliance with the law (e.g., eligibility of household, technology, program reporting, etc.) in addition to their own requirements, it will be difficult to offer rebates for projects completed before program requirements are fully defined and programs are operational.

Although the Inflation Reduction Act (IRA)-funded Home Energy Rebates are not yet available, you might be eligible for other federal, state, local, and utility programs for Californians.

• Financial assistance, rebates, and incentives are payments that cover all, or a portion, of the cost of equipment.
  • Energy Savings Assistance (ESA) Program is offered through utilities and provides no-cost weatherization services (such as weatherstripping of doors and windows or adding insulation) to customers who met California Alternate Rates for Energy (CARE) income limits.
  • California Department of Community Services & Development administers energy efficiency and weatherization programs for qualifying low-income households.
  • The Switch Is On allows you to search for incentives available in your area, including those available through the TECH Clean California initiative.
• Tax credits for residential energy efficiency and clean energy projects were extended and expanded through the IRA.
  • The U.S. Department of Energy has a publication on Federal Energy Tax Credits for Consumers.
  • The IRS has published a guide to Home Energy Tax Credits.
• Financing refers to loans or equipment leases that must be paid back.
  • GoGreen Home Energy Financing is a state-administered, utility-supported program that provides affordable financing options for customers in many utility service areas, with no out-of-pocket costs or property liens.
  • Home equity loans or home equity lines of credit (HELOC) offered through credit unions or banks can have attractive rates and facilitate home energy projects.

Also check your utility or local government websites for additional information on their energy efficiency, electrification equipment, appliance, and building decarbonization (activities and equipment that reduce greenhouse gas emissions from buildings) incentives. You may also qualify for programs that lower your utility bill rates, such as CARE/FERA. Your local utility website will have information on these programs, as well.

Home Efficiency Rebates (HOMES): The Inflation Reduction Act (IRA) does not set any income limits but does direct a percentage of rebate dollars go to low-income households. States may set their own income restrictions on eligibility or may set higher rebate amount targets for low-income households.

Home Electrification and Appliance Rebates (HEEHRA): The IRA only allows for participation of low- and moderate-income households. Low-income households are households with total family income of less than 80% of the Area Median Income (AMI). Moderate-income households have total family income between 80% and 150% of AMI.

In a future update, the CEC will provide more information to help residents determine if they fall within the low- or moderate-income category.

An aggregator is defined by the U.S. Department of Energy for Inflation Reduction Act (IRA)-funded energy rebates programs as “an entity that engages with multiple single-family homes and/or multifamily buildings for the purpose of combining or streamlining projects as allowed by the State."

For Home Efficiency Rebates (HOMES), an “aggregator” refers to an entity that completes home upgrade projects across a portfolio of homes to receive rebates. Aggregators must be pre-approved by the State. An example might be a contractor, project developer, energy consultant, or energy technology company.

For Home Electrification and Appliance Rebates (HEEHRA), an aggregator can be a governmental, commercial, or nonprofit entity carrying out a qualified electrification project on behalf of an eligible entity.

Prospective aggregators should refer to the U.S Department of Energy's DOE Program Guidance. As California’s Programs are under development, potential aggregators are encouraged to subscribe on this page to the CEC’s program announcements.

For both Home Efficiency Rebates (HOMES) and Home Electrification and Appliance Rebates (HEEHRA), California’s program design will determine which residential equipment, appliances, and improvements are eligible. The rebates will align with state climate goals, which include installing 6 million electric heat pumps by 2030. For HOMES, projects must also generate a certain level of energy savings, per the U.S. Department of Energy rules.

Subscribe on this page for announcements of program developments.

Yes. Under the Home Efficiency Rebates (HOMES) Program and the Home Electrification and Appliance Rebates (HEEHRA) Program, the owner of rental homes, including both single-family and multifamily buildings, may apply for rebates. The CEC is seeking to support and accelerate the electrification of multifamily homes.

Please subscribe on this page for information on California’s program launches and how rebates will apply to multifamily owners and operators.

There are many licensed contractors across California who can help with your home electrification and energy efficiency projects. Some resources for finding contractors include:

• The Switch Is On Contractor Database, which helps you to find a contractor servicing your area by location, specialty, and more.
• The Clean Energy Connection which provides direct access to Clean Energy Contractors by allowing you to search for a local California contractor by location, specialty, and more.
• The CEC Building and Home Energy Resource Hub, with Homeowner and Renter Energy Resources offers helpful information and links for choosing a contractor.

The CEC does not endorse contractors. Please also see the question below regarding choosing a contractor.

When choosing a contractor, it’s important to:

1. Obtain referrals, get multiple estimates, and check references in advance of entering agreements. Ask for and review written estimates that include the specific work; equipment names; and cost breakdowns for equipment, labor, and permits for the installation.
2. Ensure the contractor is familiar with the equipment you are installing, such as heat pumps for heating or cooling. Select contractors who are experienced or have received recent trainings and certifications for these improvements. Verify they understand equipment warranties and service options.
3. Confirm through the Contractors State License Board that the contractor has a license in good standing. Confirm also that the contractor is insured.

The Contractors State License Board has additional resources and tips for hiring the right contractor.

The U.S. Department of Energy guidance requires states to develop a qualified contractor list for both the Home Efficiency Rebates (HOMES) program and Home Electrification Equipment and Appliance Rebates (HEEHRA) Program. The CEC will release more information regarding requirements for contractor participation during program development.

The CEC has applied to the U.S. Department of Energy for more than $10 million in grant funding from the Inflation Reduction Act’s (IRA) Training Residential Energy Contractors (TREC) Program. The TREC program will support general workforce development for residential electrification projects, as well as help ensure sufficient skilled contractors for installations through the Home Efficiency Rebates (HOMES), Home Electrification and Appliance Rebates (HEEHRA), Equitable Building Decarbonization Direct Install, and other residential improvement programs for low-income and disadvantaged communities.

The TREC contractor training program is expected to be available in California in 2024.

Please subscribe on this page to be notified of updates and announcements.

• The CEC’s Building and Home Energy Resource Hub provides resources for homeowners and renters about water and space heating, cooking, electric vehicle charging, and more. For contractors, the Hub provides information about training, tools, incentives, and more. For local government representatives, the Hub provides information about model policies, permitting, training, and more.
• The U.S. Department of Energy's site for Home Energy Rebates includes a FAQ page with questions and answers on program overview, household and technology eligibility, state applications, and tribal applications.