The Inflation Reduction Act energy rebates are being implemented by states, except for South Dakota, which has opted out.

• The Inflation Reduction Act created two consumer rebate programs tied to energy efficiency.
• The value of these products for consumers can range from $8,000 to $14,000, based on various factors such as income and specific efficiency-related upgrades or purchases.
• Several states, including Arizona, Maine, New York, New Mexico, Rhode Island, and Wisconsin, have initiated their rebate programs. However, many others have also applied. In contrast, South Dakota has opted not to participate.

Several states have recently introduced rebates for energy-efficient home upgrades, following New York's lead in May.

In August, South Dakota officials rejected federal funding linked to two programs established under the Inflation Reduction Act, a landmark climate law passed in 2022.

Two Home Energy Rebates programs received a total of $8.8 billion from the IRA.

Up to $8,000 in Home Efficiency Rebates and up to $14,000 in Home Electrification and Appliance Rebates are available for consumers to access.

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The two rebate programs aim to reduce the cost of retrofitting homes and upgrading appliances to be more energy-efficient, thereby helping consumers cut their utility bills and reduce carbon emissions.

The eligibility and amount of money that consumers can access through two different programs are determined by varying rules. In certain instances, rebates are dependent on household income and a home's energy reduction.

According to a U.S. Department of Energy spokesperson, almost every state plans to introduce a rebate program for its residents.

Officials have until January 31, 2025 to submit a program application to the DOE.

So far, only South Dakota has publicly announced that it will not distribute rebates.

"Jim Terwilliger, commissioner of the South Dakota Bureau of Finance and Management, stated during a July 30 appropriations hearing that although they looked into the matter with good faith, they do not believe it is the right thing for South Dakota."

Here are the states that have applied

Federal funds are administered by states, which have some flexibility in designing their programs. After their funding application is approved, they can issue rebates to consumers.

New York launched the first phase of its rebates May 30.

As of September 24, data from the U.S. Department of Energy shows that five other states - Arizona, Maine, New Mexico, Rhode Island, and Wisconsin - have also launched rebate programs.

Kara Saul-Rinaldi, president and CEO of AnnDyl Policy Group, stated that she anticipates further developments.

According to DOE data, many more states, including Washington, D.C., have submitted or had their applications approved, 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.

The 27 states, including the District of Columbia, have collectively requested $4 billion in funding from the DOE.

The DOE spokesperson stated that complex government programs like rebates require time and coordination to establish.

"The Inflation Reduction Act gave states the authority to create Home Energy Rebate programs tailored to their local requirements. Since each state possesses unique resources and abilities, their implementation timelines will differ."

South Dakota is not participating

In August, South Dakota officials announced that they would not participate in the federal rebate funding, making it the only state to do so.

Gov. Kristi Noem's spokesperson, Ian Fury, stated in an e-mailed statement that South Dakota will not support the Green New Deal.

States had an Aug. 16, 2024 deadline to officially decline the funds.

The administrative burden and expense of administering a program like that are not appropriate, according to Terwilliger of the South Dakota Bureau of Finance and Management, who generally disagrees with the policy.

Up to 20% of the funding from the Inflation Reduction Act can be used by states for administrative purposes.

Early administrative funding has been requested by fifty-one states and territories, according to the DOE.

The federal money allocated for South Dakota rebates, amounting to $68.6 million, will be redistributed among the participating states.

During the Covid-19 pandemic, South Dakota was the only state to reject extended unemployment benefits, according to Fury.

The Green New Deal, a climate-change policy initiative backed by congressional Democrats, was introduced around 2019. Prior to this, bipartisan legislation for an energy rebate program, such as the Home Star Energy Retrofit Act in 2010, had already existed.

Saul-Rinaldi stated that the idea of consumer rebates linked to energy efficiency has existed for several years prior to the Green New Deal.

Florida reverses course

It appears Florida officials reversed course from their original stance on the rebates.

In 2023, Republican Gov. Ron DeSantis vetoed the state's authority to spend approximately $5 million of federal funds to administer an energy rebate program. As a result, the state's Department of Agriculture and Consumer Services announced that Florida wouldn't be applying for the rebates.

According to information on a state website, Florida is planning to launch its rebate programs in late 2024 with a full launch in early 2025.

The Department of Agriculture and Consumer Services declined to comment on the change in position.

'Every state is approaching [its program] differently'

Consumers can obtain rebates at the time of purchase when they buy an appliance from a retailer or a qualified contractor assisting with an efficiency project.

Saul-Rinaldi stated that each state is implementing its program differently due to various reasons.

In phases, many are introducing incentives for low-income consumers in single-family homes to purchase insulation from participating retailers. For instance, New Mexico is offering a $1,600 rebate.

Additional rebates will be accessible to New Mexico residents who meet the qualifications.

• An ENERGY STAR-certified electric heat pump for space heating and cooling costs $8,000.
• $4,000 for an electrical panel;
• $2,500 for electrical wiring;
• $1,750 for an ENERGY STAR-certified electric heat pump water heater;
• $1,600 for air sealing; and
• An ENERGY STAR-certified electric heat pump clothes dryer and/or an electric stove cost $840.

To determine their specific programs and eligibility, consumers and contractors should visit their state energy department website, advised Saul-Rinaldi.

If a state hasn't formally rolled out rebates for home energy upgrades, households may still be eligible for other federal programs such as tax credits, the Weatherization Assistance Program, and state, local, and utility programs, according to the U.S. Energy Department.