IRA Home Rebates are on the Horizon!

For the last year, Viridiant staff has worked with your support to promote consumer-friendly, building science-based strategies to include in Virginia’s deployment of the home energy rebate programs funded by the IRA. Rebates were first announced in August 2022 and should be available to Virginia consumers in 2025. The rebates are split into two buckets: technology neutral efficiency (HER) and efficient electrical appliance upgrades (HEAR).

Our goal is to keep partners informed and solicit ideas for program design such that Virginia not only deploys these IRA funds efficiently and effectively, but also stands up an enduring program to provide deep energy retrofits to Virginia residents for years to come.
One project we’ve worked on is mapping potential incentives typical Virginia homes might receive. These case studies have yielded insights into challenges consumers might face as they seek to maximize their financial benefits from the rebates while also utilizing tax credits and existing efficiency programs. We hope these lessons and our collective feedback will help inform the plan Virginia Energy, our state energy office, submits to the US Dept. of Energy for approval. Here’s one example:

It’s a 1976 framed ranch with a propane furnace/AC with leaky, uninsulated ductwork in a vented crawlspace. The local electric utility is Southside Co-op. This working family’s household income is 90% area median income (AMI).

This optimization exercise often started with the HER rebate, wherein $2000-$8000 is awarded based on the actual energy saved. HER has fairly high standards and covers 50-80% of the project cost. Obtaining a minimum 20% savings via a particular measure or package of measures means finding the most problematic energy features of the home. Leaky ductwork in a vented crawl or attic often presents that kind of opportunity.
HEAR rebates are specific to individual products and can be very generous, especially for a new heat pump. The gaming exercise highlighted how a home’s existing heating source is a key factor, with electricity provider and household income also playing major roles in how to “braid” this rebate into the best plan for the home. IF the existing heat had been a heat pump, even a 25-year-old one, HEAR would not support upgrading. IF the local utility was different, there could have been a utility rebate to upgrade an old heat pump.
So, “braiding” of different incentives based on building features & conditions, fuels used, local utilities, and household income is critical. Equally important is how to address the balance due once all incentives are applied. Assuming this household has $2400 in federal income tax liability, they could qualify for $13,020 total federal incentives to make their home a lot more comfortable and cheaper to operate. But they still need to come up with $9,380. 

Overall, this exercise produced two key insights for program design:

Virginia Energy will be launching a stakeholder engagement process for these programs in March. Look for announcements from that office starting in late February.

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