When Congress passed the Inflation Reduction Act (IRA) in 2022, it created two new programs, Home Efficiency
Rebates (HER, formerly HOMES) and Home Electrification and Appliance Rebates (HEAR). HER and HEAR can provide a once-in-a-generation opportunity to substantially expand and diversify your contracting business.
IRA’s $8.8 billion in home energy rebates are the largest federal investment in residential electrification and decarbonization programs in history. The Department of Energy (DOE) estimates these programs will support more than 50,000 jobs across the U.S. Many will be filled by contractors who specialize in energy audits or energy-efficient HVAC, solar, lighting, or plumbing installations. It’s important to know that much of the available information is from the DOE. Still, each state will determine their own rules for qualifications and eligibility with more resources being available in the coming months. Here’s what you need to know about the IRA and the HER and HEAR programs.
Understanding the IRA Home Energy Rebate Programs
The IRA’s home energy rebate programs are designed to weatherize 2 million American residences and cut the country’s greenhouse gas emissions by at least half before 2030. Specifically, the HER and HEAR programs offer single-family or multifamily homeowners with rebates for energy-efficiency improvements to their dwellings.
Both programs will be administered through state energy offices (SEOs), and there will be a separate program for American Indian Tribes. Funding varies by state, depending on factors like population and energy usage.
Each state has leeway about how it wants to spend its IRA money, but it must follow certain parameters for both the HEAR and HER programs.
Understanding HEAR
The HEAR program works like a traditional rebate/point-of-sale program. Homeowners can receive up to $14,000 for ENERGY STAR ®-certified electric appliances or other energy-efficient equipment.
For instance, installing a heat pump could net an $8,000 rebate. Other rebates include $4,000 for an electrical service panel box; $2,500 for an electrical wiring upgrade; $1,750 for a heat pump water heater; and $1,600 for air sealing, insulation or ventilation.
One of HEAR’s goals is to encourage energy efficiency in traditionally underserved or disadvantaged communities. Consequently, HEAR is only available for households that earn up to 150% of the area median income (AMI), and rebates are higher for households that earn less than 80% of the AMI.
Understanding HER
HER provides single-family or multifamily homeowners an opportunity to unlock significant rebates by improving their homes’ overall energy use by at least 20%. All U.S. households will be eligible for HER rebates, but those that make or less of the AMI can qualify for higher rebates, up to $8,000. Products and services provided by contractors can include insulation, air sealing, heat pump/HVAC, water heating upgrades and more. The IRA recommends home energy audits to determine which projects qualify for HER rebates.
HER energy savings will be calculated through either measured or modeled pathways. Measured savings are evaluated at the meter nine to 12 months post-installation and can net homeowners rebates ranging from $2,000 to $4,000. Modeled savings estimate energy use through computer modeling and simulations, using the BPI-2400 standard. Depending on the needs of the customer, a measured or modeled approach may be preferred. Rebates based on modeled savings can range from $2,000 to $8,000 per household.
The role of Snugg Pro
Snugg Pro is an energy auditing and productivity program that provides comprehensive solutions for contractors. BPI-2400 compliant and DOE approved platform, Snugg Pro meets all legislative requirements and is ideal for meeting HER’s modeled savings requirement.
Snugg Pro can create easy-to-understand proposals that help you close sales opportunities on the spot. In addition, it can calculate savings for energy upgrades; educate homeowners about comfort, health, and safety upgrades; create detailed cost templates; model HVAC systems; track job-stage pipelines; apply dynamic financing; and manage crew communications.
Learn more about how Snugg Pro supports contractors and what it can do for your business.