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“That’s going to cause confusion.”
It’s been nearly two years since the Inflation Reduction Act passed, and two of its programs designed to encourage home electrification and energy efficiency — worth a combined $8.8 billion — are still not operational.
The delay has already caused consternation among homeowners who can’t understand why they still don’t know when the rebates will be available or what they will cover. Now it’s becoming apparent that these programs could look quite different state by state.
This is, to some extent, by design. The rebates will be distributed by state governments, who must first apply to the Department of Energy for their share of the funding. Most states are still in the process of putting together their applications. The law laid out some rules for how these programs would work, e.g. which kinds of appliances and upgrades the rebates will subsidize and the maximum subsidy per appliance and per household. It also put restrictions on who could benefit from the programs, with most of the money earmarked for low- and moderate-income households. But it left plenty of flexibility for states to tailor the programs to their own needs.
That’s mostly a good thing. Many states already offer robust electrification and efficiency rebates, but their existing programs have major shortcomings. Apartment buildings, in particular, have been hard to reach — both because landlords have little incentive to make upgrades and because it’s much more complicated to retrofit a big apartment building than a single-family home. The IRA rebates create an opportunity to try and fill these kinds of gaps.
But the result is also, frankly, messy. The money is taking a long time to get out the door, and when it does the programs are going to be convoluted and challenging to communicate to consumers.This could turn out to be a missed opportunity for Biden. When the polling nonprofit Data for Progress asks voters about their greatest concerns relating to climate, they point to energy costs, pollution, and extreme weather. The IRA rebates are an opportunity to address these concerns, and 71% of voters support the programs — including majorities across party lines — according to the group’s surveys.
“Nobody would say that this rollout has been as fast as they would have wanted,” Sage Briscoe, the federal policy director for Rewiring America, told me. “But I’m hopeful that it's going to be really impactful, and at the end of the day, that’s the main thing.”
Information on how states are thinking about distributing the money is scarce. Some did extensive stakeholder engagement prior to submitting their applications and made their proposed plans public, while others are saving that process until after they apply. I combed through as much publicly available information as I could find and discovered a number of ways in which these rebate programs could diverge. The programs may go by different names in different states. Moreover, a heat pump discount in Maine may not exist in Rhode Island, or a family that qualifies for funding in Wisconsin may not have qualified had they lived in New Jersey.
Here are some of the big themes.
The challenge in understanding these programs starts with their most basic feature. What are they called?
One of the programs will provide point-of-sale rebates on specific appliances and upgrades such as heat pumps, insulation, or a new electric panel. This was originally called the High-Efficiency Electric Home Rebate Act, or HEEHRA. Some states have continued to use that acronym. Others have adopted the name the Home Electrification and Appliance Rebates, or HEAR. (For the sake of brevity, I’ll use HEAR.)
The other program, which is a bit more complicated, provides rebates based on the amount of energy a home retrofit project saves. For example, if a homeowner implements a bunch of improvements that will reduce their energy consumption by at least 20%, they could get up to $4,000 back, while upgrades that result in a 35% reduction are eligible for up to $8,000. This was originally called the HOPE for HOMES Act, and many states simply refer to it as HOMES. Others prefer the title Home Efficiency Rebates, or HER. (To make things more confusing, the Department of Energy refers to its two programs together as the Home Energy Rebates and also uses the acronym HER. For the sake of clarity, I’ll refer to this one as HOMES.)
Meanwhile, some states are funneling the money into their own pre-existing rebate programs or creating new programs with new names. For example, New York — the only state to have received funding under the IRA rebate programs so far— will distribute at least some of the HEAR money through its Empower+ program, which already helps low- and moderate-income households save energy. The state will be able to expand the program’s offerings to include paying for electrical upgrades needed to install heat pumps or induction stoves. Vermont wants to allocate most of the HOMES funding to its Weatherization Assistance Program, which is an older, federally funded, state-implemented efficiency program for low-income households. New Jersey is considering putting most of the funding from both pots toward a new program called M-RISE.
Ultimately, this could mean that many people who apply for or receive these rebates will have no idea that they’re benefiting from Biden’s Inflation Reduction Act.
“That was baked in the cake the way the law was written,” Andy Frank, the founder of the home electrification company Sealed, told me. He said he thinks the bigger communication challenge will be when the first few states start launching their programs. Biden officials may take the opportunity to do a victory lap, inviting national press. People in other states may see the news and think they can get rebates too. “That’s going to cause confusion,” he said.
Briscoe acknowledged the branding challenge but said it was not the most important part of the legislation. “The most important thing is getting families the help that they need, and I think that’s rightfully where the emphasis has been,” she told me.
Congress included a long list of technologies that would be eligible for discounts under the HEAR program: Heat pump space heaters, heat pump water heaters, heat pump clothes dryers, electric stoves, electric panels, electric wiring, insulation, air sealing, and ventilation systems.
While it seems that most states plan to copy and paste the whole list into their plans, a few are narrowing it down. Maine, for example, has proposed offering rebates only for heat pumps, plus electric wiring and panel upgrades if needed. Its draft strategic plan from January says that the state has alternative funding streams to sustain its existing programs for water heaters and insulation, and that the other appliances, like stoves and clothes dryers, “have less impact on home energy costs and carbon emissions.”
Rhode Island, on the other hand, may not allocate any of the funding for heat pumps. The state conducted a “gap analysis” to identify which of the technologies have the least funding support under its existing programs and determined that stoves, clothes dryers, electric panels, and wiring were the best use of the HEAR funds. That doesn’t mean Rhode Islanders wouldn’t be able to get rebates for heat pumps — the state energy office offers incentives, as do all of its utilities. It just means they wouldn’t be able to get more funding on top of what’s already offered.
Wisconsin, which is further behind these Northeast states in promoting electrification, is opting to make all of the technologies eligible. Though narrowing the list would extend the budget for each one, state officials noted, it would also “preclude the state from accelerating market adoption for those upgrades.”
Congress restricted HEAR program funding to low-income households, defined as those making less than 80% of the area median income, and moderate-income households, or those making between 80% and 150% of the area median income. The HOMES program is not income-restricted, though states were instructed to offer higher rebates for low-income households.
There’s going to be a lot of variation between states regarding how much funding they dedicate to each income bracket. But there also may be some variation in the types of buildings that are eligible.
Maine has proposed dedicating 100% of the funding under the HOMES program and much of the funding under HEAR to multifamily buildings. For the HEAR program, it might also prioritize subsidizing heat pump retrofits in manufactured housing, formerly referred to as “mobile homes.” That means if you’re a single family homeowner in Maine, you probably won’t benefit from the program — although Maine already has extensive subsidies for single-family homes and has completed more than 100,000 heat pump retrofits since 2019.
“They're taking this funding to try and move beyond that section of housing and open up robust programs for areas where they still have really high need,” said Briscoe.
New Jersey has proposed a similar approach, dedicating 100% of HOMES funding and 85% of HEAR funding to multifamily buildings in low-income neighborhoods. The remaining 15% will go toward an existing state program called Comfort Partners that subsidizes energy efficiency measures to expand its offerings to heat pumps, electrical panels, wiring, and water heaters.
Sealed and Rewiring America are both working on tools to help consumers and contractors navigate all of this confusion. Frank told me Sealed was developing software for contractors that will help them determine customer eligibility and calculate total savings at the point of sale, and then process the rebate paperwork as quickly and easily as possible. Rewiring America is building what it intends to be a user-friendly calculator in which a homeowner will be able to enter their zip code and income and get information about all of the programs they are eligible for, including state, local, and utility-run offerings.
Or at least Californians are. Dozens have written to the California Energy Commission to ask when the rebates will be available, whether they will qualify, or to express their frustration with how long it’s taking to get the program up and running.
Consider the following comment submitted in April by Kristen Talley, a homeowner who wants to replace her gas furnace with an electric heat pump. “We’d hoped to do the project last fall … and we can’t proceed until the rebates are available,” she wrote. “Please establish criteria and make applications available NOW!!! It’s crazy that it's taken this long!”
Richard Pellin, a 77-year-old retiree who does not have enough income to qualify for the tax credits, wrote that he wants to install a new heat pump system so that he can have air conditioning. “We suffered badly last year from the summer heat … Waiting until the state programs are ready to issue rebates would cause us to suffer longer,” he said. He implored the commission to allow the rebates to be claimed retroactively, warning that otherwise there might be “a surge of activity when rebates are approved” that will tax supply chains and labor and cause further delays. (The Department of Energy has specified that the HEAR rebates cannot be claimed retroactively, but it may be possible for the HOMES rebates.)
Some of this frustration is misplaced. California submitted its application for the HEAR program in January and is waiting on the Department of Energy to approve it. In the meantime, it may even be possible that Talley and Pellin are eligible for existing California rebate programs, though discounts through those are significantly lower.
Another public comment from Richard Bailey had the subject line: “Time is of the essence.” Bailey warned that the rebates could be “canceled, denied, delayed, etc” if Trump was elected. “Much is at risk. Do not delay,” he wrote.
I asked Briscoe how much of a risk this was. She said it would require an act of Congress to cancel the programs — in other words, it’s not something Trump could do on day one. Even then, money that’s already been awarded to states cannot be clawed back. Fifteen states have already submitted their applications, and are expected to receive funding by the end of the year.
“Hopefully, we can get a lot of these applications in and processed before any new administration were to take over,” said Briscoe.
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What if, instead of maintaining old pipelines, gas utilities paid for homes to electrify?
California just hit a critical climate milestone: On September 1, Pacific Gas and Electric, the biggest utility in the state, raised natural gas rates by close to $6 due to shrinking gas demand.
I didn’t say it was a milestone worth celebrating. But experts have long warned that gas rates would go up as customers started to use less of the fossil fuel. PG&E is now forecasting enough of a drop in demand, whether because homeowners are making efficiency improvements or switching to electric appliances, that it needs to charge everyone a bit more to keep up with the cost of maintaining its pipelines.
Shortly after the rate increase went into effect, however, Governor Gavin Newsom signed a bill aimed at addressing this exact problem. The new law gives PG&E and other utilities permission to use money they would have spent to replace aging, leaky pipelines to pay for the electrification of the homes served by those pipes — as long as electrifying the homes is cheaper. Instead of investing millions of ratepayer dollars into the gas system, utilities can start to decommission parts of it, shrinking gas use and fixed costs in tandem.
PG&E actually already has the freedom to do this, and has even completed a fair number of projects. But the utility has had limited success, mainly because of an anti-discrimination law that gives building owners the right to stick with natural gas. It only takes one gas stalwart to thwart a whole neighborhood’s prospects for free electric appliances, since in order to keep delivering gas to that one household, the utility has to invest in the entire section of pipeline serving the area. A 2023 report showed that while PG&E had completed more than 100 projects, it hadn’t been able to convince clusters of customers larger than five at a time to convert.
The new law doesn’t fundamentally change the anti-discrimination rule, known as a utility’s “duty to serve,” but it does relieve PG&E and others of this duty if at least two-thirds of the homeowners served by a given section of pipeline consent to getting off gas. For now, the legislation limits utilities to executing 30 such projects. But for those 30, as long as two-thirds consent, the utility can now tell the holdouts that it is retiring the pipeline, and that they have no choice but to get on the electric bandwagon.
“If a supermajority wants it, it can move forward,” Matt Vespa, a senior attorney from Earthjustice who worked on the legislation, told me. “Which I think is probably a good place to start from. You want to have a place where there’s significant buy-in.”
This strategy, sometimes called “zonal decarbonization” or “targeted electrification,” is one that many climate groups are advocating for as a way to achieve an orderly and equitable transition off of natural gas. The approach most states have taken so far — providing subsidies that gently prod consumers into going electric — results in a random pattern of adoption that can benefit some homeowners while harming others. It also does nothing to deter gas utilities from investing hundreds of millions of dollars in maintaining, replacing, or building new pipelines each year — investments that are set up to be recouped from ratepayers over the course of decades.
California isn’t the first place in the world to experiment with targeted electrification. The Swiss city of Zurich began systematically shutting down sections of its gas system in 2021, giving affected users about a decade of warning and offering partial compensation for the cost of new equipment. In Massachusetts, the utility Eversource is piloting a unique neighborhood-scale electrification project. The company hooked up 32 residential buildings and a few commercial businesses in the city of Framingham to a new underground network of pipes that carry water rather than natural gas, which in turn connect to geothermal heat pumps that use the water to heat or cool the air inside. There are more than a dozen such “thermal energy network” pilot projects in various stages in Massachusetts, New York, Colorado, Washington, Vermont, Maryland, and Minnesota.
But the new California program is unique in its scale and approach. For one thing, it applies to all gas utilities in the state. Beginning next summer, they will each need to submit maps to the utility commission that identify potential pipeline replacement projects; then, in 2026, regulators will use those maps to designate priority areas, giving precedence to low-income communities and households that lack heating or cooling. By July of that year, the commission must establish the rules of the pilot program, including a methodology for utilities to determine when electrification is more cost-effective than pipeline replacement, and rules for how utilities can pay for the projects and recover costs.
PG&E supported the bill and worked closely with its authors on the language. The utility declined an interview, but emailed me a statement saying the legislation “enables cost-effective, targeted electrification projects which will help avoid more expensive gas pipeline replacements, reducing gas system operating costs, and support the state’s and PG&E’s decarbonization goals.”
Utilities will still be spending ratepayer money on the electrification projects, but far less than they would have spent on pipeline infrastructure. For the remaining gas customers, it’s still possible rates will go up, though by less than they would have otherwise. Mike Henchen, a principal in the carbon-free buildings program at RMI, told me these pilot projects alone are not going to pull so many customers away from the gas system that it will put upward pressure on rates. The law caps the program at no more than 1% of a utility’s customers.
Vespa, the Earthjustice attorney, told me he originally worked on a more ambitious version of the bill that would have required utilities to avoid any new investments in the gas system when electrification was a cheaper alternative. But it was pared back and made voluntary in order to get it through the legislature. “The hope is that we'll get projects off the ground, we’ll get proof-of-concept,” he said. “I think there was a need to demonstrate some successful stories and then hopefully expand from there.”
While these pilots make sense, economically, for a dual gas and electric company like PG&E, one big question is whether the state’s gas-only utilities like Southern California Gas will take the initiative. (SoCalGas did not respond to my inquiry prior to publication, but the company did support the legislation.)
Looking ahead, even if lawmakers do expand the program to authorize every cost-effective project, this model can’t transition the entire state away from gas. These projects are more likely to pencil out in places with lower housing density, where a given section of pipeline is serving only a handful of homes. A fact sheet about the bill published by its lead sponsor, state senator David Min, says that “zero emissions alternatives” to pipeline replacement are only technically feasible and cost effective for about 5% of PG&E’s territory. “Gas customers won't be able to pay for the decommissioning of the whole gas system, or even 50% of it,” said Henchen.
In the meantime, however, there’s lots of low-hanging fruit to pluck. Targeted electrification of just 3% to 4% of gas customers across the state could reduce gas utility spending by $15 billion to $26 billion through 2045, according to an analysis by Energy and Environmental Economics.
“It’s a modest step,” said Vespa of the new law. “But I do think it’s meaningful to start moving forward and developing the frameworks for this.”
Revoy is already hitching its power packs to semis in one of America’s busiest shipping corridors.
Battery swaps used to be the future. To solve the unsolvable problem of long recharging times for electric vehicles, some innovators at the dawn of this EV age imagined roadside stops where drivers would trade their depleted battery for a fully charged one in a matter of minutes, then be on their merry way.
That vision didn’t work out for passenger EVs — the industry chose DC fast charging instead. If the startup Revoy has its way, however, this kind of idea might be exactly the thing that helps the trucking industry surmount its huge hurdles to using electric power.
Revoy’s creation is, essentially, a bonus battery pack on wheels that turns an ordinary semi into an EV for as long as the battery lasts. The rolling module carries a 525 kilowatt-hour lithium iron phosphate battery pack attaches to the back of the truck; then, the trailer full of cargo attaches to the module. The pack offers a typical truck 250 miles of electric driving. Founder Ian Rust told me that’s just enough energy to reach the next Revoy station, where the trucker could swap their depleted module for a fresh one. And if the battery hits zero charge, that's no problem because the truck reverts to its diesel engine. It’s a little like a plug-in hybrid vehicle, if the PHEV towed its battery pack like an Airstream and could drop it off at will.
“If you run out of battery with us, there's basically no range anxiety,” Rust said. “And we do it intentionally on our routes, run it down to as close to zero as possible before we hit the next Revoy swapping station. That way you can get the maximum value of the battery without having to worry about range.”
To start, a trucker in a normal, everyday semi pulls up to a Revoy station and drops their trailer. A worker attaches a fully charged Revoy unit to the truck and trailer—all in five minutes or less, Revoy promises. Once in place, the unit interfaces seamlessly with the truck’s drivetrain and controls.
“It basically takes over as the cruise control on the vehicle,” he said. “So the driver gets it up to speed, takes their foot off the gas, and then we actually become the primary powertrain on the vehicle. You really only have to burn diesel for the little bit that is getting onto the highway and then getting off the highway, and you get really extreme MPGs with that.”
The Revoy model is going through its real-world paces as we speak. Rust’s startup has partnered with Ryder trucking, whose drivers are powering their semis with Revoy EVs at battery-swap stops along a stretch of Interstate 30 in Texas and Arkansas, a major highway for auto parts and other supplies coming from Mexico. Rust hopes the next Revoy corridor will go into Washington State, where the ample hydropower could help supply clean energy to all those swappable batteries. Happily, he said, Revoy can expand piecemeal like this because its approach negates the chicken-and-egg problem of needing a whole nation of EV chargers to make the vehicles themselves viable. Once a truck leaves a Revoy corridor, it’s just a diesel-powered truck again.
Early data from the Ryder pilot shows that the EV unit slashed how much diesel fuel a truck needs to make it down the designated corridor. “This is a way we can reduce a path to reduce the emissions of our fleet without having to buy anything — and without having to have to worry about how much utilization we're going to have to get,” Mike Plasencia, group director of New Product Strategy at Ryder, told me.
Trucking represents one of the biggest opportunities for cutting the carbon emissions of the transportation sector. It’s also one of the most challenging. Heatmap has covered the problem of oversized SUV and pickup truck EVs, which need larger, more expensive batteries to propel them. The trucking problem is that issue on steroids: A semi can tow up to 80,000 pounds down an American highway.
There are companies building true EV semi trucks despite this tall order — Tesla’s has been road-testing one while hauling Pepsi around, and trucking mainstays like Peterbilt are trying their hand as well. Although the EV model that works for everyday cars — a built-in battery that requires recharging after a couple hundred miles — can work for short-haul trucks that move freight around a city, it is a difficult fit for long-haul trucking where a driver must cover vast distances on a strict timetable. That’s exactly where Revoy is trying to break in.
"We are really focused on long haul,” he told me. “The reason for that is, it's the bigger market. One of the big misconceptions in trucking is that it's dominated by short haul. It's very much the opposite. And it's the bigger emission source, it's the bigger fuel user."
Rust has a background in robotics and devised the Revoy system as a potential solution to both the high cost of EV semis and to the huge chunks of time lost to fueling during long-distance driving. Another part of the pitch is that the Revoy unit is more than a battery. By employing the regenerative braking common in EVs, the Revoy provides a redundancy beyond air brakes for slowing a big semi—that way, if the air brakes fail, a trucker has a better option than the runaway truck lane. The setup also provides power and active steering to the Revoy’s axle, which Rust told me makes the big rig easier to maneuver.
Plasencia agrees. “The feedback from the drivers has been positive,” he said. “You get feedback messages like, it felt like I was driving a car, or like I wasn't carrying anything.”
As it tries to expand to more trucking corridors across the nation, Revoy may face an uphill battle in trying to sell truckers and trucking companies on an entirely new way to think about electrifying their fleets. But Rust has one ace up his sleeve: With Revoy, they get to keep their trucks — no need to buy new ones.
On the DOE’s transmission projects, Cybertruck recalls, and Antarctic greening
Current conditions: Hurricane Kirk, now a Category 4 storm, could bring life-threatening surf and rip currents to the East Coast this weekend • The New Zealand city of Dunedin is flooded after its rainiest day in more than 100 years • Parts of the U.S. may be able to see the Northern Lights this weekend after the sun released its biggest solar flare since 2017.
The Energy Department yesterday announced $1.5 billion in investments toward four grid transmission projects. The selected projects will “enable nearly 1,000 miles of new transmission development and 7,100 MW of new capacity throughout Louisiana, Maine, Mississippi, New Mexico, Oklahoma, and Texas, while creating nearly 9,000 good-paying jobs,” the DOE said in a statement. One of the projects, called Southern Spirit, will involve installing a 320-mile high-voltage direct current line across Texas, Louisiana, and Mississippi that connects Texas’ ERCOT grid to the larger U.S. grid for the first time. This “will enhance reliability and prevent outages during extreme weather events,” the DOE said. “This is a REALLY. BIG. DEAL,” wrote Michelle Lewis at Electrek.
The DOE also released a study examining grid demands through 2050 and concluded that the U.S. will need to double or even triple transmission capacity by 2050 compared to 2020 to meet growing electricity demand.
Duke Energy, one of the country’s largest utilities, appears to be walking back its commitment to ditch coal by 2035. In a new plan released yesterday, Duke said it would not shut down the second-largest coal-fired power plant in the U.S., Gibson Station in Indiana, in 2035 as previously planned, but would instead run it through 2038. The company plans to retrofit the plant to run on natural gas as well as coal, with similar natural-gas conversions planned for other coal plants. The company also slashed projects for expanding renewables. According toBloomberg, a Duke spokeswoman cited increasing power demand for the changes. Electricity demand has seen a recent surge in part due to a boom in data centers. Ben Inskeep, program director at the Citizens Action Coalition of Indiana, a consumer and environmental advocacy group, noted that Duke’s modeling has Indiana customers paying 4% more each year through 2030 “as Duke continues to cling to its coal plants and wastes hundreds of millions on gasifying coal.”
The Edison Electric Institute issued its latest electric vehicle forecast, anticipating EV trends through 2035. Some key projections from the trade group’s report:
Tesla issued another recall for the Cybertruck yesterday, the fifth recall for the electric pickup since its launch at the end of last year. The new recall has to do with the rearview camera, which apparently is too slow to display an image to the driver when shifting into reverse. It applies to about 27,000 trucks (which is pretty much all of them), but an over-the-air software update to fix the problem has already been released. There were no reports of injuries or accidents from the defect.
A new study published in Nature found that vegetation is expanding across Antarctica’s northernmost region, known as the Antarctic Peninsula. As the planet warms, plants like mosses and lichen are growing on rocks where snow and ice used to be, resulting in “greening.” Examining satellite data, the researchers from the universities of Exeter and Hertfordshire, and the British Antarctic Survey, were shocked to discover that the peninsula has seen a tenfold increase in vegetation cover since 1986. And the rate of greening has accelerated by over 30% since 2016. This greening is “creating an area suitable for more advanced plant life or invasive species to get a foothold,” co-author Olly Bartlett, a University of Hertfordshire researcher, told Inside Climate News. “These rates of change we’re seeing made us think that perhaps we’ve captured the start of a more dramatic transformation.”
Moss on Ardley Island in the Antarctic. Dan Charman/Nature
Japan has a vast underground concrete tunnel system that was built to take on overflow from excess rain water and prevent Tokyo from flooding. It’s 50 meters underground, and nearly 4 miles long.
Carl Court/Getty Images