South Dakota is waiving the Inflation Reduction Act’s energy rebates

A handful of states have offered rebates to consumers who make their homes more energy efficient, just months after New York became the first state to do so in May.

Meanwhile, South Dakota officials in August rejected federal funding tied to two new programs created by the Inflation Reduction Act, a landmark climate law passed in 2022.

The IRA set aside $8.8 billion for consumers through two funds Energy discounts for the home programs.

Consumers can access up to $8,000 Home efficiency rebatesand up to $14,000 Electrification of homes and rebates on appliances.

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Together, the two rebate programs are intended to defray – or in some cases completely offset – the costs of modernizing homes and upgrading appliances to make them more energy efficient. Such changes could help consumers lower their energy bills while reducing carbon emissions that are warming the planet, officials said.

The two programs have different rules that determine which consumers are eligible and how much money they can access. In some cases, the discounts depend on family income and the total energy reduction of a home.

Nearly every state has indicated it will launch a rebate program for residents, according to a spokesperson for the U.S. Department of Energy.

State officials had an August deadline to officially deny the federal funds. They have a date of January 31, 2025 term to submit a program application to the DOE.

So far, South Dakota is the only state that has publicly indicated that it will not implement the reductions.

“We looked at this with good faith,” said Jim Terwilliger, commissioner of the South Dakota Bureau of Finance and Management, said during a July 30th credits. “We just don’t believe this is the right choice for South Dakota.”

States, which administer federal funds, have some leeway regarding program design. They must apply for financing and can hand out rebates to consumers after their application is approved.

New York launched the first phase of its discounts on May 30.

Five others – Arizona, Maine, New Mexico, Rhode Island and Wisconsin – have since launched discount programsAlso according to data from the US Department of Energy as of September 24.

“I expect more and more to be rolled out,” said Kara Saul-Rinaldi, president and CEO of AnnDyl Policy Group, a consultancy focused on climate and energy policy.

According to DOE data, many more states, as well as Washington, DC, have submitted or approved applications: California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Michigan, Minnesota, New Jersey, New Hampshire, Massachusetts, North Carolina, Oregon, Tennessee, Vermont, Washington and West Virginia.

Together, these 26 states plus the District of Columbia have applied for a total of $4 billion in funding to date, the DOE said.

The rebates are a new program, and “complex government programs like this take time and coordination to set up,” a DOE spokesperson said.

“The Inflation Reduction Act puts states in charge of designing and implementing Home Energy Rebate programs that meet their local needs,” the spokesperson wrote in an email. “As each state has different resources and capabilities, each state’s timeline will be different.”

However, South Dakota officials signaled in August that they would not participate, the only state so far to decline federal rebate funding.

“South Dakota will have no role in facilitating the Green New Deal,” Ian Fury, a spokesperson for Republican Gov. Kristi Noem, said in an emailed statement.

States had one Deadline August 16, 2024 to officially refuse the money.

“We do not believe the administrative burden and cost of administering such a program is appropriate, and we generally disagree with the policy,” Terwilliger of the South Dakota Bureau of Finance and Management said in a statement July post. hearing.

The Inflation Reduction Act gives states the opportunity to do that use up to 20% of its funding for administrative purposes.

Fifty-one states and territories have applied to DOE for early administrative funding, the agency said.

The $68.6 million of the federal money set aside for the South Dakota rebates will be redistributed to participating states.

Fury also noted that this isn’t the first time South Dakota has rejected federal spending. It was the only state to do so reject extended unemployment benefits in 2020 during the Covid-19 pandemic, Fury said.

The Green New Deal is a climate change policy initiative supported by upstart Democrats in Congress around 2019. Nearly a decade earlier, bipartisan legislation to create an energy rebate program already existed Home Star Energy Retrofit Act in 2010.

The concept of consumer rebates tied to energy efficiency “predates the Green New Deal by many years,” Saul-Rinaldi said.

It appears Florida officials have changed course from their original position on the rebates.

Republican Gov. Ron DeSantis in 2023 vetoed the state’s authority to spend about $5 million in federal funds to administer the energy rebate program. At the time, a spokesperson for the state Department of Agriculture and Consumer Services told CNBC that Florida would not apply for the rebates as a result.

Now Florida is preparing for a soft launch of the discount programs in late 2024 and a full launch in early 2025, according to information on a state website.

A spokesperson for the Department of Agriculture and Consumer Services did not return a request for comment on the change in position.

At a high level, consumers can get the discounts at the point of sale, when they purchase an appliance directly from a retailer or from a qualified contractor who is helping a household complete an efficiency project.

“Every state is closing in.” [its program] different for many reasons,” Saul-Rinaldi said.

Many are rolling them out in phases. For example, New Mexico starts with offering a $1,600 rebate for low-income consumers in single-family homes who purchase insulation from a participating retailer.

As in other states, eligible New Mexico residents can later access additional discounts, such as:

• $8,000 for an ENERGY STAR certified electric heat pump for space heating and cooling;
• $4,000 for an electrical panel;
• $2,500 for electrical wiring;
• $1,750 for an ENERGY STAR certified electric heat pump water heater;
• $1,600 for air sealing; And
• $840 for an ENERGY STAR certified dryer with electric heat pump and/or an electric stove.

Consumers and contractors should check the state energy department website for more information about their specific programs and eligibility, Saul-Rinaldi said.

The U.S. Energy Department suggests that households not wait to make necessary energy upgrades or projects if their state has not formally implemented rebates. They may be eligible for other federal programs,” including tax creditsthe Weatherization Assistance Programand others state, local, and utility programs”, the agency said.