Home Energy Rebates Are on the Way. Here’s What to Know. | Reviews by Wirecutter

By Rachel Wharton

Rachel Wharton is a writer covering kitchen appliances. She used 72 bags of popcorn to find the best microwave (and set the office on fire only once).

We have updated this article with new information about home energy rebates established by the Inflation Reduction Act, including all appliance types covered by the bill.

The Inflation Reduction Act (IRA)—the biggest climate bill in US history—is helping push more Americans toward electric vehicles, solar panels, and other renewable energy sources. It may also change how people cook, do laundry, and heat their homes: The bill sets aside at least $4.5 billion for the first-ever federal consumer rebates on Energy Star–approved electric ranges, ovens, cooktops, heat pumps, and heat pump water heaters or dryers.

The Home Energy Rebates programs will help shift more people away from gas-powered home appliances, said Ari Matusiak, chief executive officer of Rewiring America, a nonprofit research and policy group focused on energy efficiency. “It really is a transformative deal,” he explained.

Depending on your eligibility, the rebates could cut thousands of dollars off the cost of purchasing and installing electric appliances, including the costs of rewiring or hiring a contractor.

Rebate programs will be offered either until funding runs out or September 30, 2031, whichever comes first, and they will be managed by individual state offices. Although a few programs have begun to launch, most won’t roll out completely until later in 2024 or beyond, according to the US Department of Energy. You can track your state’s progress on its rebate portal.

If you are eligible for rebates, we strongly recommend waiting until your state program begins before making a purchase, since reimbursements may not be possible. In the meantime, we have guidance on how to prepare for when it’s time to buy.

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There are two types of IRA rebates, each with its own specific stipulations. (Both will be managed by individual state offices, and you may also be able to combine them with other financial incentives or tax credits.) Here’s a rundown of each:

Home Electrification and Appliance Rebates (HEAR) cover the purchase and installation of certain Energy Star–certified appliances and are only available to households making up to 150% of their local area median income, a number calculated every year by the US Department of Housing and Urban Development. (You can find your area median income with this tool.)

These programs were primarily designed to make switching from gas to electric appliances more economical for many people, including those who can least afford it, Matusiak said. But some states may choose to extend the rebate program to cover new construction.

Instead of requiring you to file for a refund, the rebates will be deducted by a retailer or contractor from the total cost of an Energy Star–certified appliance and costs associated with installation, rewiring work, and ventilation.

Low-income households (those making below 80% of their area median income) are potentially eligible to have 100% of their costs covered. Moderate-income households (essentially everyone else who is eligible for the rebates) could get up to 50% of their costs covered.

For either tier, rebates are capped at specific dollar amounts:

The IRA’s appliance rebate programs also apply to landlords and builders of single- and multifamily buildings where at least 50% of the residents are low- or moderate-income households, as well as to those living in US territories, such as Puerto Rico, and to federally recognized tribes. If you rent your home, you may be able to ask your landlord to replace an old gas stove with an electric or induction model in the coming years, especially as more cities pass legislation that limits the installation of gas appliances.

Home Efficiency Rebates (HER) apply to more general certified home-efficiency projects that together reduce an existing home’s energy usage by at least 20%. This could include replacing windows, upgrading your HVAC system, improving insulation, or upgrading your home’s wiring or electrical panel.

The HER program does not have income restrictions, though “lower income residents will receive a higher rebate amount,” said Brian Lips, an energy policy expert for the NC Clean Energy Technology Center and manager of the Database of State Incentives for Renewables & Efficiency (DSIRE). The maximum rebate is $8,000. Even if you don’t qualify for HEAR, you may be able to use the HER program to offset some of the cost of the electrical work required for installation.

Details for acceptable projects will be managed by states, but most will involve starting the process with a home energy assessment by a certified auditor. These are offered as a tax credit through 2032, and many state governments or utilities already offer them for free (you can search for offers through DSIRE). Most also require that any new products you install in your home (such as new windows) be either Energy Star–approved or meet other efficiency specifications.

Most rebate programs, which will be managed by individual state offices, are still under development. Some states will likely allow you to apply entirely through one application portal, such as the one already in use by New York. (Currently, the rollout covers installation, efficiency, and electrical work, as well as heat pumps and heat pump water heaters, for low-income New Yorkers, but it should expand to cover all appliances and income levels by the end of 2024.) Wisconsin has also launched a portal that currently accepts applications for Home Efficiency Rebates only.

Other states may require you to work through a certified contractor or retailer, like an appliance or electronics store. Either would potentially manage all or part of the application process for you, including confirming your eligibility and deducting the rebates before you pay.

If you are eligible for a rebate but can’t wait until your state’s programs are up and running to buy, be sure to research additional financial programs and keep all your receipts and paperwork. Additionally, make sure you buy an Energy Star–approved appliance or product where applicable, which is required by the federal rules establishing the rebate programs.

We don’t yet know if states will allow retroactive HEAR reimbursement for appliances purchased before the new programs debut. It may be possible, considering that the rebates legally took effect when the bill was signed, said Whitney Potter, deputy chief of staff for Senator Martin Heinrich of New Mexico at the time of our interview, who was instrumental in creating the rebate programs.

Reimbursements may be available for some of the work under the HER program, such as upgrading your home’s wiring or electrical panel. These rebates can be applied retroactively, as long as work meets your state’s requirements, you keep records, and the project began on or after August 16, 2022. (Your state’s program needs to launch before you can apply for reimbursement.)

But it’s best to wait, if you can. The IRA’s rebates, which apply at the time of purchase or installation, are easiest for buyers, Lips said. But Lips counsels against putting off a purchase for too many years: Even though the rebate programs are set up to last until September 30, 2031, the money allocated to each state may run out before then.

In the meantime, you may want to find out what other work you potentially need to do to prepare to switch to electric appliances or upgrade to newer ones. This could include electrical improvements or changes to your ventilation, and it may require speaking with an electrician, installer, or contractor.

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If you’re not eligible for IRA appliance rebates (or can’t wait until your state program is ready), you may have alternatives for financial support.

If you live in an existing home—as in, you’re not building or buying a new one—you likely qualify for new IRA tax credits under the expanded energy efficient home improvement credit (25C on tax forms). Through 2032, you may be able to deduct up to 30% of the costs of qualified energy efficiency improvements each year, including upgrading to a heat pump, improving your insulation or windows, upgrading your electrical systems, or getting a professional energy assessment, which the Department of Energy recommends as a first step. (Any new products you install in your home need to be either Energy Star–approved or meet other specifications.)

Tax credits can even be applied to the remaining costs after an IRA rebate is deducted, said Lips, who recommends talking to your accountant or making sure your tax software includes up-to-date information on the new bill.

You could also qualify for other electric appliance rebates or tax credits from your electric utility, city, or state, Lips said, adding that IRA rebates and tax credits can be layered with these alternative programs. He recommends checking DSIRE occasionally before you buy, whether or not you qualify for an IRA rebate or if you need to purchase an appliance before the programs begin.

If you can wait for the IRA rebates and tax credits, get familiar with appliances and products that will fulfill their requirements. Any appliance purchased with a rebate must be Energy Star–approved if Energy Star certifies that category. Here is a list of qualifying appliances:

Electric heat pump dryers: Our research has shown that electric heat pump dryers are far more efficient than regular vented dryers, though they take longer to dry clothes and have traditionally been more expensive. Because they do not have a condenser, heat pump dryers do not emit heat or moisture, which means they can be installed in a closet or in hot or humid conditions. One of the recommendations in our guide to compact washers and dryers is an Energy Star–approved heat pump model, and we also have advice on this type of dryer in our guide to dryers.

Radiant electric or induction cooktops and ranges and electric wall ovens: There are two primary reasons to ditch gas cooking appliances for electric models, or to switch from radiant electric to induction. The first is improved cooktop efficiency. A representative from Energy Star told us that induction cooktops are the most efficient at transferring heat to your food (as opposed to the outside air), running at about 85% efficiency; traditional radiant electric cooktops operate at 75% to 80% efficiency, and most gas ranges are only 32% efficient. (Higher efficiency also means your kitchen stays cooler.) Gas cooktops and stoves have also been shown to be potentially risky even with ventilation, in part because they emit pollutants such as benzene and methane.

Earlier this year the Environmental Protection Agency added Energy Star certification for electric cooktops and ranges, and most manufacturers are currently in the process of getting their products certified. We have recommendations for freestanding radiant electric and induction ranges, radiant electric and induction slide-in ranges, and induction cooktops, and we expect many of our current picks to have Energy Star–approved versions by the time rebates are widely available. We are also updating our guides as more Energy Star products become available. (All certified models are added to the Energy Star product finder as soon as they are approved.)

In addition, we recommend electric wall ovens: Standalone ovens without a cooktop don’t yet have an Energy Star certification process, so you would only need to buy an electric version to meet the rebate requirements.

Heat pumps for home cooling and heating systems: Our guide to buying a heat pump explains how heat pumps work, the various styles, and why you might want to install one. (Our experts say they’re the “cheapest and most efficient way to handle both heating and cooling for your home, no matter where you live.”) We also have guidance on ductless mini-split air conditioners, which are one or more wall-, floor-, or ceiling-mounted indoor units connected to an outdoor compressor. All four of the brands we recommend have many Energy Star–approved models.

Heat pump water heaters: According to our experts, heat pump water heaters can help reduce the costs of heating your water by up to 75%. Heat pump water heaters are the future for most homes: The Department of Energy proposed a new set of standards in 2023 that, if adopted, would essentially phase out most non-heat pump models by 2029. All of our recommendations will be Energy Star–approved.

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Rewiring America has many helpful resources, including a calculator to show rebate and tax credit possibilities based on your household income and size, zip code, tax filing, and whether you own or rent your home. For zip codes in many states, these calculations also include other state and local incentives.

The NC Clean Energy Technology Center manages DSIRE and has also created a rebate guide for homeowners (in English and Spanish) that includes information on finding and managing contractors who will be knowledgeable about using these rebates, as well as other useful information about home-efficiency projects.

In addition, the Department of Energy has illustrated fact sheets that describe the steps to apply for both HEAR (PDF) and HER (PDF) programs, as well as a page covering frequently asked questions.

This article was edited by Ingrid Skjong and Courtney Schley.

James Armstrong, director of advanced systems for cooking products, GE Appliances, video interview, June 26, 2024

Alex Amend, director of communications of Rewiring America, email interview, June 24, 2024

Doreen Harris, president and chief executive officer, NYSERDA, phone interview, May 30, 2024

US Department of Energy, video press conference, May 29, 2024

Ari Matusiak, chief executive officer of Rewiring America, phone interview, August 9, 2024

Brian Lips, energy policy expert for the NC Clean Energy Technology Center and manager of the Database of State Incentives for Renewables & Efficiency, phone interview, August 12, 2022

Whitney Potter, deputy chief of staff for Senator Martin Heinrich of New Mexico, email interview, August 11, 2022

US Environmental Protection Agency Energy Star program, email interview, August 19, 2022

Alicia Cafferty, vice president of government relations (North America), BSH Home Appliances Corporation, email interview, August 11, 2022

Rachel Wharton

Rachel Wharton is a senior staff writer at Wirecutter covering ovens, stoves, fridges and other essential kitchen appliances. She has more than 15 years of experience reporting on food issues and a master's degree in food studies, and has helped write more than a dozen books on that topic (including her own, American Food: A Not-So-Serious History). One of her first real gigs was reviewing kitchen gadgets in less than 50 words for the New York Daily News.

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