Federal Rebate Summary
In response to the 2020 COVID-19 pandemic, the federal government enacted the Inflation Reduction Act (IRA), allocating $4.5 billion for home electrification upgrades, including heat pumps. Soon, low income homeowners across all 50 states will be eligible for rebates ranging from $1,750 to $8,000 for the purchase and installation of a heat pump.
Additionally, currently heat pump purchasers may qualify for up to $2,000 annually in tax credits, reducing installation costs by up to 30 percent. Other home electrification upgrades, such as circuit panel upgrades and EV chargers, may also be eligible for tax deductions.
Timeline & Process
Under the IRA, each state must apply for its share of the $4.5 billion, which will be distributed to its residents. Washington State has submitted its application and is awaiting approval. To access these grants, primarily targeted at low-income households, homeowners will need to work with contractors listed in the state's qualified contractor directory, which is yet to be finalized and published.
What Happens When Washington Receives Its Funding?
Once Washington is granted its approximate $82 million share, it may take a few months for the state to implement its distribution system. These funds will be provided as point-of-sale rebates, with lower-income households receiving larger amounts, meaning homeowners will know before purchase and installation if they qualify.
Stay tuned to this blog for updates on the IRA rebates and visit the Washington State Department of Commerce IRA Homepage for more information.
Washington State's Use of Federal IRA Funds
Washington State is committed to using the federal IRA funds to support home electrification upgrades, focusing on improving energy efficiency and reducing carbon emissions. The state plans to allocate these funds strategically to maximize their impact.
Low-Income Requirement for State Funds
It's important to note that the $82 million allocated by Washington State under the IRA is primarily targeted towards low-income households. Eligibility for these funds will be based on income requirements, ensuring that the benefits reach those most in need.
Timeline & Process
The state is currently in the process of dispersing these funds to statewide organizations. These administrators will then distribute funds to eligible low-income homeowners.
Administrators can be any of the following:
- 501(c)(3) Non-Profit Organizations
- Community Action Agencies
- Housing Providers
- Local Governments
- Tribal Governments and Tribal supporting entities
- Electric Utilities
For updates on your area’s administrator, refer to this blog and the Washington State Department of Commerce website. The state aims to select administrators by the latest August 31, 2024, with the earliest selection by June 30, 2024.
What Low-Income Homeowners Can Do Now
Stay informed by checking this blog regularly and visiting the Washington State Department of Commerce Website for more information.
By ensuring these funds are directed towards low-income households, Washington State is committed to making home electrification upgrades accessible and affordable for those who need it most. The state’s approach aims to improve energy efficiency, reduce greenhouse gas emissions, and support a more sustainable future for all residents. For more detailed information on how Washington State plans to use federal IRA funds, visit the Washington State Department of Commerce's page on federal funding for buildings here.
