Incentives under the Inflation Reduction Act for Home Energy Efficiency and Electrification
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What is the Inflation Reduction Act?
The Inflation Reduction Act (IRA) is a federal law that provides roughly $370 billion for national investments in clean energy and energy efficiency, including programs to help households and taxpayers upgrade their homes to save money and reduce energy use. By reducing our energy consumption and expanding clean energy sources, these investments will make our air cleaner and help meet the District’s goal of carbon neutrality by 2045.
IRA Rebates-Funded Programs to Improve Home Energy Efficiency
The IRA created the Home Energy Rebates Programs under the federal Department of Energy to assist households with energy-efficient home upgrades. DOEE will use this funding to expand the Affordable Housing Retrofit Accelerator (AHRA) and the Affordable Home Electrification Program (AHEP), existing low-income programs that reduce energy use in homes through energy efficiency and electrification upgrades that help households transition from gas-powered to electric-powered appliances and systems. These programs are run under contract with the DC Sustainable Energy Utility (DCSEU) and are re-launching in fall 2024 to enroll eligible customers and reflect new requirements under the federal IRA rebates funds. Property owners/managers and residents are encouraged to learn more about these programs. Federally funded IRA rebates will not be available outside of participation in AHRA or AHEP.
- Learn more about the IRA rebates programs
- Learn more about AHRA
- Learn more about and sign up for AHEP
As part of its grant from the federal Department of Energy, DOEE is required to make program implementation documents publicly available. Those documents, including consumer protection and community benefits plans, can be accessed below.
Other Sources of Support
DCSEU offers other incentives for home energy efficiency and electrification for residents that do not income-qualify for AHEP or AHRA. DCSEU’s Residential Rebates – distinct from the IRA rebates – are available to District residents who want to upgrade appliances and systems in their homes, regardless of income level.
The District also offers other forms of assistance to residents and homeowners to reduce energy use and save money on utilities. Additional information can be found on frontdoor.dc.gov.
The Inflation Reduction Act extended some tax credits and created new ones to help households with energy-efficient home upgrades. Tax credits are available now and are managed by the Internal Revenue Service (IRS). Taxpayers must claim credits when filing their annual federal tax return.
Information about tax credits can be found at the following links. Please consult a financial or tax advisor for further assistance.
Frequently Asked Questions
What is the difference between the IRA Rebates Programs and DCSEU’s Residential Rebates?
DOEE is using federal funding from the IRA Department of Energy Home Energy Rebates Programs to expand two existing District programs that are available for low-income households and eligible multifamily housing properties, the Affordable Home Electrification Program and the Affordable Housing Retrofit Accelerator. Interested residents and building owners must apply with DCSEU to participate in these programs. Under these programs, DCSEU provides direct financial and technical assistance to homeowners and building owners for home energy upgrades, including connecting participants directly to qualified contractors, advising on specific upgrades, and ensuring quality installation. Participation in these programs minimizes upfront costs to the homeowner or building owner.
Separately, DCSEU offers electrification HVAC and appliance rebates to households at any income level. These rebates are funded using local dollars and are issued typically after proof of purchase is provided. To find out if your purchase or installation is eligible, please visit DCSEU’s website: dcseu.com/residential-rebates.
What is the difference between a rebate and a tax credit?
A tax credit is a dollar-for-dollar reduction in the amount of federal income tax paid. That is, a tax credit can reduce the amount of taxes owed or can increase your tax refund. Taxpayers must claim credits when filing their annual tax return with the Internal Revenue Service. DOEE does not have a role in administering tax credits. Please consult a financial or tax advisor for further information on claiming tax credits on your return.
A rebate is a discount associated with the purchase of a specific product or service and can occur either as a point-of-sale discount or as a partial or full refund after proof of purchase is submitted. DOEE will be managing and overseeing the distribution of federal Department of Energy Home Energy Rebates Programs funding within the District.
Am I eligible for a tax credit for an appliance that I've already purchased or an upgrade I’ve already made to my home?
Many of the tax credits extended or created under IRA are effective starting in calendar year 2023. Please consult a financial or tax advisor for further information about claiming a tax credit on your annual tax return for a past purchase.
Am I eligible for AHEP assistance or a DCSEU rebate for an appliance I’ve already purchased or an upgrade I’ve already made to my home?
AHEP does not offer rebates or assistance for purchases or upgrades completed outside of program participation. Residents interested in AHEP must apply directly with DCSEU and be approved to participate in the program.
DCSEU Residential Rebates will be available for eligible purchases and upgrades made on or after October 1, 2024. To find out if your installation is eligible, please visit DCSEU’s website: https://www.dcseu.com/residential-rebates.
What is electrification?
Electrification involves replacing home appliances and systems that burn fossil fuels with appliances and systems that are powered by electricity; for example, replacing a gas stove with an induction stove, or a gas-powered furnace with a heat pump for home heating and cooling. Electrification can help reduce harmful greenhouse gas emissions that cause climate change.
How do these programs relate to the District’s Healthy Homes and Residential Electrification Amendment Act of 2023?
The Healthy Homes and Residential Electrification Amendment Act of 2023 is a local law that directs DOEE to provide residential electrification retrofits at no cost to low-income households and qualifying multifamily housing buildings. DOEE’s planned implementation of the Act is built on DOEE’s applications for federal rebates under the Department of Energy’s Home Energy Rebates Programs.
If you have any questions, complaints, or feedback on these programs, please email [email protected].
