States Roll Out Energy Efficiency Rebates Under Inflation Reduction Act, South Dakota Opts Out

Six states have launched programs offering rebates to homeowners who make energy-efficient improvements to their residences, utilizing funding provided by the Inflation Reduction Act (IRA). The IRA, a landmark climate law enacted in 2022, earmarked $8.8 billion for two consumer rebate programs: Home Efficiency Rebates (up to $8,000 per household) and Home Electrification and Appliance Rebates (up to $14,000 per household).

These rebates aim to reduce the financial burden of upgrading homes and appliances to be more energy-efficient, enabling consumers to lower their utility bills while simultaneously reducing carbon emissions. Eligibility and rebate amounts vary by state and often depend on factors such as household income and the extent of energy savings achieved.

New York was the first state to launch its rebate program in May, followed by Arizona, Maine, New Mexico, Rhode Island, and Wisconsin. Many other states, including California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Michigan, Minnesota, New Jersey, New Hampshire, Massachusetts, North Carolina, Oregon, Tennessee, Vermont, Washington, and West Virginia, have either submitted applications or received approval for their programs.

South Dakota is the only state to publicly decline the federal funds. Governor Kristi Noem, a Republican, has cited philosophical objections to the program and concerns about administrative burdens.

“We do not believe that this program is right for South Dakota,” stated a spokesperson for Governor Noem. “We disagree with the policy direction and believe the administrative costs associated with managing such a program outweigh the benefits.”

The federal funds that were allocated to South Dakota will be redistributed among the participating states.

Key Takeaways:

• Six states have launched energy efficiency rebate programs for homeowners using IRA funding.
• Most U.S. states and territories have applied for funding or are in the process of developing their programs.
• South Dakota is the only state to have declined participation, citing policy disagreements and administrative concerns.
• The rebate programs aim to encourage energy-efficient home upgrades and reduce carbon emissions.

The rollout of these state-level rebate programs marks a significant step toward achieving the IRA’s climate goals. By incentivizing energy efficiency improvements, the programs aim to reduce energy consumption, lower household costs, and contribute to a cleaner energy future. The success of these programs will depend on effective implementation, public awareness, and ongoing support from policymakers at both the state and federal levels.