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Inflation Reduction Act to Bolster Vermont Weatherization and Electrification Efforts

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Update May 9, 2024:

Home Energy Rebates Program Public Meeting (virtual), June 4, 2024, 6 PM.

The Public Service Department will hold a virtual public information session at 6 PM on Tuesday, June 4, 2024.  The purpose of the meeting is to have a public discussion about Vermont's Home Energy Rebate Program design.  Public participation is encouraged.  The Department's proposal will be published on this website at least 10 days before the session.   To register, click here.  

Update March 22, 2024:

Vermont Home Energy Rebate Program 

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. The IRA included $8.8 billion in funding for the Department of Energy (DOE) to allocate to the states for home energy efficiency and electrification projects. 

The Home Energy Rebates program is made up of two distinct programs: Home Efficiency Rebates (HER) and Home Electrification and Appliance Rebates (HEAR). HER (also referred to as HOMES) focuses on comprehensive home efficiency projects and weatherization. HEAR provides rebate funding for electrification measures. Vermont expects to receive roughly $29 million under each of these two residential energy programs.  

The Department of Public Service, which serves as Vermont’s State Energy Office, is currently working with DOE and energy efficiency service providers in the State to develop an application for the Home Energy Rebate funds that will have the greatest impact on lowering energy bills for the most energy-burdened Vermonters and enabling greater electrification of homes, while complying with federal requirements. 

Vermont plans to submit an application to DOE during in Summer 2024. Rebates are anticipated to be available beginning early 2025. 

Funding available under the IRA 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. 

Specifically, the Department anticipates allocating the majority of its HER funding to the State’s Weatherization Assistance Program (WAP) administered by the Office of Economic Opportunity to provide comprehensive efficiency services to Vermont households with incomes below 80% of the Area Median Income. For the HEAR program, Department anticipates allocating some of the money to supplement weatherization in WAP projects and is in discussions with the Energy Efficiency Utilities to identify gaps in Vermont’s residential efficiency programming that can best be served by IRA funds.  

Opportunities for Public Comment 

A draft proposal for Vermont’s plan for deploying IRA Home Energy Rebates will be made available in 2024 on this website.   

A virtual public meeting will be held in 2024.  Details will be posted on this website. Interested parties may provide comments at the public meeting and/or in writing. More information on how to submit written comments will be provided upon the circulation of the draft plan. 

Application Process 

To receive this federal funding, Vermont must submit an application demonstrating how its proposed programs will be implemented consistent with DOE rules. In early 2024, PSD is working with Vermont stakeholders to determine best uses of the funds based on federal regulations and guidelines as well as existing programmatic activities. In addition, PSD is working to ensure Vermont’s HER and HEAR programs will reduce energy burden and serve disadvantaged and underserved communities (including low-income communities and multifamily residences, among others). 

For more information  

If you have specific questions about Vermont’s federally funded Home Energy Rebates program, please contact:  

Ian Lund, Energy Program Specialist, Vermont Department of Public Service 
Ian.Lund@vermont.gov
.  

 

Update August 22, 2023:

The Department of Energy (DOE) has issued the amount of funding allocated and guidance to the State Energy Offices (the Department of Public Service is the State Energy Office for Vermont) regarding Home Energy Rebates funded through the Inflation Reduction Act. Vermont's total allocation amount is $58,555,020.00.

The next step is for the State Energy Offices to submit applications to the DOE, including program logistics and timelines for rebate programs that will be developed. Applications submitted to the DOE will be reviewed on a rolling basis and accepted through January 31, 2025.

The Department has not yet developed the plan and materials required for the rebate programs, which will be submitted with the application to the DOE, but is currently working on developing both. As more information about this becomes available, it will be posted on this webpage.

In the meantime, the DOE has developed a FAQ document that includes helpful information for consumers.

Update February 14, 2023: 

The Internal Revenue Service (IRS) Inflation Reduction Act of 2022 webpage includes information and guidance documents about how the Inflation Reduction Act (IRA) will be implemented with regards to tax law changes, clean vehicle credits, and energy projects in low-income communities, among other issues. The page is updated as new information becomes available. 

Update January 25, 2023: 

The U.S. Department of Energy (DOE) has advised that they will issue two separate formula grant application opportunities for the Home Energy Performance-Based Whole-House Rebate Allocations and the High Efficiency Electric Home Rebate Allocations funds, with the first expected in Spring 2023 and the second in Summer 2023.

The first grant opportunity will allow states to apply for a portion of funds for a limited set of eligible program activities (not yet determined). The second grant opportunity will detail the full DOE rebate program requirements and allow states to apply for the remaining formula rebate allocations. 

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 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.

For more information, please contact Ian Lund, Energy Program Specialist, at Ian.Lund@vermont.gov

Helpful links (updated July 12, 2023):