Home Energy Rebate Programs

The Inflation Reduction Act (IRA) includes $8.8 billion for two residential energy efficiency and electrification rebate programs, the Home Energy Performance-Based Whole House Rebate (Home Efficiency Rebates) and the High-Efficiency Electric Home Rebate Program (Home Electrification and Appliance Rebates). These Programs will be administered by the U.S. Department of Energy (DOE) at the federal level and State Energy Offices at the state level (TDEC’s Office of Energy Programs functions as the State Energy Office for Tennessee). Please note that IRA rebate funds are expected to impact approximately 1-2% of households nationwide.

 Funding for these programs is not yet available to State Energy Offices. On July 27, 2023, U.S. DOE released program guidance for States to apply for the Home Energy Rebate Programs funding. TDEC OEP is designing the programs in alignment with the U.S. DOE guidance and will prepare program applications to be submitted for U.S.  DOE’s review and approval.

Households looking for home energy retrofit assistance today cannot yet access these rebates but may be eligible for TVA EnergyRight Residential Energy Efficiency Rebates or currently active federal programs, including tax credits or the Weatherization Assistance Program.

To learn more about how home energy efficiency and electrification rebates available through the Inflation Reduction Act can benefit your family, visit https://cleanenergy.gov.

Sign up here for the Tennessee Department of Environment and Conservation Office of Energy Program’s (TDEC OEP) email list for updates regarding the Inflation Reduction Act Rebate Programs, as well as our two monthly newsletters, which highlight timely news items, upcoming events, funding opportunities, and new resources regarding energy and energy in transportation.

Public Input Session

TDEC OEP hosted a public input session on May 3 at 1:00 PM Central to provide an update on the status of the Inflation Reduction Act’s Home Energy Rebate Programs and solicit community input. Interested stakeholders were given the opportunity to provide feedback at the end of the public input session. Public comments were also collected via survey through May 24, 2024.

View the presentation from the public input session

Home Energy Performance-Based Whole House Rebate (Home Efficiency Rebates)

Tennessee’s allocation for the Home Efficiency Rebate Program is $83,877,940. Rebates for energy efficiency retrofits will range from $2,000-$8,000 for individual households and up to $400,000 for multifamily buildings based on both income qualification as well as the amount of energy saved. 

The State must reserve portions of its rebate program funding to serve low-income, single-family households and low-income, multifamily buildings; for Tennessee, the minimum amount that must be allocated for low-income, single-family households is $26,820,076, and the minimum amount that must be allocated for low-income, multifamily buildings is $6,710,235.

Eligibility:

Any household is eligible for Home Efficiency Rebates, and rebate amounts will be determined based on energy saved and income qualification.

Single Family Household:

Modeled Energy Savings

Income Level

Rebate Amount

20%-34%

Less than 80% AMI*

Lesser of $4,000 or 80% of project cost

80% AMI and greater

Lesser of $2,000 or 50% of project cost

35% and greater

Less than 80% AMI*

Lesser of $8,000 or 80% of project cost

80% AMI and greater

Lesser of $4,000 or 50% of project cost

Multifamily Household:

Modeled Energy Savings

Income Level

Rebate Amount

20%-34%

A building with at least 50% of households with incomes less than 80% AMI*

Lesser of $4,000 per dwelling unit or 80% of project cost

A building with at least 50% of households with incomes 80% AMI* and greater

$2,000 per dwelling unit up to $200,000 per building

35% and greater

A building with at least 50% of households with incomes less than 80% AMI*

Lesser of $8,000 per dwelling unit or 80% of project cost

A building with at least 50% of households with incomes 80% AMI* and greater

$4,000 per dwelling unit up to $400,00 per building

*To determine the applicable area median income (AMI), please visit the Housing and Urban Development Median Income Tool.

High-Efficiency Electric Home Rebate Program (Home Electrification and Appliance Rebates)

Tennessee’s allocation to administer the Home Electrification and Appliance Rebate Program is $83,390,060. Rebates for electric appliances are set by legislation and are specifically targeted to low-income households. 

The State must reserve portions of its rebate program funding to serve low-income, single-family households and low-income, multifamily buildings; for Tennessee, the minimum amount that must be allocated for low-income, single-family households is $26,664,075, and the minimum amount that must be allocated for low-income, multifamily buildings is $6,671,205.

Appliance purchases must be carried out as:

  • part of a new construction project;
  • to replace a non-electric appliance;
  • or as a first-time purchase of a heat pump for space conditioning in an existing home that is installed to provide the primary heating and cooling for the household.


Eligibility:

The law specifies that Home Electrification and Appliance Rebates are available to (1) low- or moderate-income (LMI) households, (2) individuals or entities that own a multifamily building with low- or moderate-income households comprising at least 50% of the residents, and (3) governmental, commercial, or nonprofit entities that are carrying out projects for low- or moderate-income households or multifamily building owners.

A low- or moderate-income household is one where an individual or family has a total annual income less than 150% of the median income of the area where the individual or family resides. For households with a total annual income below 80% of the area median income (AMI), rebates can cover a higher percentage of the total project costs.

Rebate Limitations:

*To determine the applicable area median income (AMI), please visit the Housing and Urban Development Median Income Tool.

Measures Proposed for the Tennessee Program Rebate Amount
Heat pump water heater Up to $1,750
Heat pump for space heating & cooling Up to $8,000
Electrical load service center upgrade Up to $4,000
Insulation, air sealing & ventilation Up to $1,600
Electric wiring Up to $2,500

There is a maximum rebate of $14,000 per building, with percentage caps varying by income and building type.

Currently, consumers can take advantage of a variety of tax credits, including the Energy Efficient Home Improvement Credit. The IRS webpage, Credits and Deductions Under the Inflation Reduction Act of 2022, overviews the various tax incentives available.

Although not an incentive under the Inflation Reduction Act (IRA), there are residential energy efficiency rebates available from TVA EnergyRight for qualifying HVAC systems, duct and air sealing, heat pump water heaters, insulation, windows, and HVAC tune-ups. Learn more about TVA EnergyRight Residential Rebates here.

In accordance with the IRA Home Energy Rebates Program Requirements and Application Instructions, section 3.1.2, the State will provide rebates only for projects under the Home Efficiency Rebate (HER) Program that 1) were initiated on or after August 16, 2022, 2) meet all DOE requirements within this document (HER Rebate Programs Requirements and Application Instructions), and 3) meet any additional requirements determined by the State of Tennessee.

The State is not authorized to offer Home Electrification and Appliance Rebates retroactively, as stated in the U.S. DOE Home Energy Rebates Frequently Asked Questions.

  • July 2023: U.S. DOE guidance available to States to apply for funding for IRA residential energy rebate programs
  • 2023 and 2024: Program development
  • Early 2025: Programs launch and rebates available to the public
     

Single-family dwellings and multi-family buildings are eligible for the Home Energy Rebate Programs.

A single-family dwelling is a building that contains at least one but not more than two dwelling units with independent mechanical systems (e.g., heating, cooling, water heating, and ventilation) for each dwelling unit, and each dwelling unit must have its own active electric meter. A dwelling unit may include a single-family home, an apartment, or a condominium unit in a multifamily building. Single-family dwellings include manufactured homes built after 1976 and on a permanent foundation.

Multifamily buildings are defined as a single building containing at least two dwelling units used for residential purposes.

TDEC OEP will coordinate with TVA to ensure that members of TVA’s Quality Contractor Network are informed on all aspects of the Home Energy Rebate Programs, including participant eligibility, eligible upgrades and appliances, and any other Program requirements.

 

Any household is eligible for Home Efficiency Rebates, and rebate amounts will be determined based on energy saved and income qualification. Please note that the Home Efficiency Rebates are only available to retrofit existing homes and buildings.

The IRA does not establish a specific list of eligible products and building materials for the Home Efficiency Rebate Program. The Program will provide rebates for a combination of energy-efficiency products and building material installations that together are predicted to save at least 20% of the household's total energy use.

The law specifies that Home Electrification and Appliance Rebates are available to (1) low- or moderate-income households, (2) individuals or entities that own a multifamily building with low- or moderate-income households comprising at least 50% of the residents, and (3) governmental, commercial, or nonprofit entities that are carrying out projects for low- or moderate-income households or multifamily building owners.

A low- or moderate-income household is one where an individual or family has a total annual income less than 150% of the median income of the area where the individual or family resides. For households with a total annual income below 80% of the area median income (AMI), rebates can cover a higher percentage of the total project costs. To determine the applicable area median income (AMI), please visit the Housing and Urban Development Median Income Tool.
 

TDEC OEP is partnering with TVA and its Quality Contractor Network (QCN) to install appliances under the Home Electrification and Appliance Rebate Program. The participating household will choose a QCN contractor who will reserve the rebate, install the appliance, and receive the rebate funds directly.

Appliance purchases under the Home Electrification and Appliance Rebate Program in Tennessee must be carried out as:

  • part of a new construction project;
  • or as a first-time purchase of a heat pump for space conditioning in an existing home that is installed to provide the primary heating and cooling for the household.

Contact OEP Senior Grants Program Coordinator Nola Hastings for additional questions regarding the Inflation Reduction Act at Nola.Hastings@tn.gov.

This Page Last Updated: May 28, 2024 at 9:07 AM