It took a long time to get from the passing of the Inflation Reduction Act (IRA) into law (August 2022) to the first official state launch of the program in New York (May 2024). Since then, though, we’ve seen 10 more state-level programs get up and running, and momentum is building in many others.

What is the next step for the appliance retailers in the launched states? You might think the next step is to get on the list of approved retailers so you can sell some products. That is an important step, but there is more to understand besides getting registered with your state.

There are two IRA programs that tie into the residential market – one has a focus on home electrification (often referred to as HEAR) and the other has a focus on measures to reduce energy consumption (often referred to as HOMES). The funding from the DOE for both programs is about $8.8 billion and it is split almost evenly between the two programs.

As a retailer, the HEAR program is the more interesting one because it involves electric/induction cooking products as well as heat pump dryers with rebates of up to $840 for the consumer. Both are product categories you commonly sell and install. HOMES is not as interesting because it starts with an energy audit to determine which upgrades will deliver sufficient energy savings to qualify for the rebates. The auditor then plans the upgrade path for the homeowner, and it will very likely include the two largest electric consuming devices in the home – HVAC and water heating.

As states began to apply for the IRA, some only applied for one of the two programs and requested all the funds to be applied to that program. For the states that applied for both programs, and have launched, they may have not launched both programs at the same time. What we have found based on various data sources is that every state is taking a different path related to launching. Understanding the launch schedule and timeline will help you best time your entry into the program.

Here are six examples of state launches and the implication to retailers. These will give you a good sense for how each state is taking a specific approach that best suits that state’s goals, and, for larger states like NY and CA, how they’re leveraging existing energy efficiency programs:

1.

NY, with $317 million in consumer rebates and administration, was the first state to launch their IRA program on May 30, 2024. They took some of their awarded IRA funds and applied the money towards an existing energy savings program in NY. The announcement said “NYSERDA is rolling out these rebates through its existing EmPower+ program, which serves income-eligible owners and renters through a network of participating installers.” If you were not already part of the EmPower+ program as a participating installer, this launch would not create any opportunity for you.

On November 21, 2024, almost six months later, the NY Department of Energy announced they were expanding the reach of IRA to the Home Electrification and Appliance Rebates (HEAR). This provided in-store and online appliance rebates across the state to eligible New Yorkers. This next Phase of the NY launch creates an opportunity for retailers that register with NYSERDA.

 2.

WI was the first state to launch the HOMES portion of the IRA on August 5, 2024. That program begins with a licensed energy auditor to determine the home’s upgrade needs and establish the estimated energy savings each upgrade would provide. When the HEAR program launches at a later but
not specified date, that will be an opportunity for retailers in WI.

3.

AZ launched the Efficiency Arizona HEAR program, in partnership with regional community action agencies on August 29, 2024. Initial focus is on providing heat pumps under an air-conditioning replacement program addressing heat relief emergencies and/or financial hardships. This fall, Arizona planned to roll out the remainder of its HEAR program providing lower- and middle-income homeowners rebates to upgrade equipment and appliances. The launch of HEAR in the retail channel will create an opportunity for AZ retailers. The expected fall 2024 launch has slipped.

4.

NM was the third state to launch a Home Electrification and Appliance Rebates (HEAR) program on September 3, 2024 and the first one to launch with retail! On day one, low-income single-family homeowners could receive up to $1,600 in rebates for insulation from participating retailers including Lowe’s.

On Black Friday, NM’s HEAR program expanded to provide low-income single-family homeowners and low- and middle-income renters rebates on eligible equipment and appliances — from a heat pump and heat pump water heater to heat pump clothes dryer and induction stove. In preparation, Nationwide introduced the Builders Source team to the NM State Energy Office in late September. This HEAR expansion presents an opportunity for all retailers operating in NM.

5.

CA launched the first phase of its Home Electrification and Appliance Rebates (HEAR) program on October 8, 2024. The California Energy Commission is utilizing federal rebates to expand state-level incentives that TECH Clean California implements to support even more Californians. This program is for HVAC and plumbers; requires registration and training. It adds funds to an existing program.

On November 12, 2024, rebates under California’s HEAR program became available to eligible California single-family households. This warrants further investigation and may be an opportunity for appliance retailers.

6.

MI started their IRA program on October 29, 2024, in two regions, the utility service areas of the Holland Board of Public Works and the Upper Peninsula Power Company (UPPCO). Pilot versions of the Home Efficiency Rebates (HOMES) and Home Electrification and Appliance Rebates (HEAR) programs will be available to up to 50 households. Eligible consumers will have state certified contractors guide them through their upgrades. This is a very limited launch in two small utilities and not of much interest to appliance retailers.

Nationwide’s Frank Sandtner is the industry’s leading expert on the IRA and how retailers across the US can, and should, benefit from the billions of dollars available to consumers. To learn more about the IRA program launches and discuss strategies on how to be best positioned to leverage IRA funds, contact him at frank.sandtner@nationwidegroup.org.