Inflation Reduction Act to Bolster Vermont Weatherization and Electrification Efforts

The federal Inflation Reduction Act, signed into law on August 16, 2022, will help Vermont households reduce their energy costs while also cutting greenhouse gas emissions that contribute to climate change. Funding available under the law will build on substantial state investments made in 2021 and 2022 to significantly increase the pace of weatherization and building electrification in Vermont through 2026. Programs funded under the Inflation Reduction Act will help ensure that sustained investments are made through 2031.

Guidance for these programs will be issued by the Department of Energy to the states in 2023. Consumers can sign up for updates and/or get more information about existing programs as well as what will be available in 2023 through the IRA. 

The Department of Public Service will fund two new residential energy programs to run through 2031:

  • The Home Energy Performance-Based Whole-House Rebates (HOMES) Program will provide eligible households with rebates of $2,000 to $8,000 for whole-home energy-saving retrofits and weatherization such as improving insulation and methodically sealing air leaks. Rebates will help Vermont make progress towards its goal of weatherizing an additional 90,000 homes by 2030.
  • The High-Efficiency Electric Home Rebate Program will provide point-of-sale rebates to low- and moderate-income households for a variety of electric technologies, including heat pumps for space heating and cooling, heat pump water heaters, electric stoves and ovens, and electric service upgrades. Eligible households will be able to receive up to $14,000 for installing energy efficient electric equipment, including up to $8,000 for heat pumps, $1,750 for heat pump water heaters, and $840 for electric stoves.

Weatherization helps Vermonters stay comfortable in their homes while spending less of their income on heating and cooling bills. Energy costs are especially burdensome for the lowest income households in Vermont, who spend an average of 18% of their incomes on heating and electricity. The residential energy efficiency programs in the Inflation Reduction Act include enhanced rebates for low-income Vermonters and provide rebates to cover up to 100% of the cost to install efficient technologies.

The Inflation Reduction Act includes Energy Efficiency Contractor Training Grants to support workforce development to ensure that qualified contractors are available to do this crucial work. The law also increases the federal investment tax credit for homeowners who install solar panels (up to 30%, through 2032) and expands this tax credit to include battery storage technology. Tax credits for energy efficiency home improvements are increased to 30%, through 2032 as well.

Inflation Reduction Act programs will build on Vermont’s existing incentives and free technical assistance to weatherize homes and reduce fossil fuel consumption, including:

  • Weatherization rebates and incentives through Efficiency Vermont: call (888) 921-5990 or visit EfficiencyVermont.com
  • Free weatherization services for income-eligible Vermonters through the Weatherization Assistance Program: call 211 for your local provider or visit Weatherization.Vermont.gov
  • Heat pump and water heater rebates available through many electric utilities’ energy transformation programs

Visit EnergySaver.Vermont.gov for more resources on saving energy.