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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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A longtime climate messaging strategist is tired of seeing the industry punch below its weight.
The saga of President Trump’s One Big Beautiful Bill Act contains at least one clear lesson for the clean energy industry: It must grow a political spine and act like the trillion-dollar behemoth it is. And though the logic is counterintuitive, the new law will likely provide an opportunity to build one.
The coming threat to renewable energy investment became apparent as soon as Trump won the presidency again last fall. The only questions were how much was vulnerable, and through what mechanisms.
Still, many clean energy leaders were optimistic that Trump’s “energy abundance” agenda had room for renewables. During the transition, one longtime Republican energy lobbyist told Utility Dive that Trump’s incoming cabinet had a “very aggressive approach towards renewables.” When Democratic Senator John Hickenlooper introduced would-be Secretary of Energy Chris Wright at the fracking executive’s confirmation hearing, he vouched for Wright’s clean energy cred. Even Trump touted Wright’s experience with solar.
At least initially, the argument made sense. After all, energy demand is soaring, and solar, wind, and battery storage account for 95% of new power projects awaiting grid connection in the U.S. In red states like Texas and Oklahoma, clean energy is booming because it’s cheap. Just a few months ago, the Lone Star State achieved record energy generation from solar, wind, and batteries, and consumers there are saving millions of dollars a day because of renewables. The Biden administration funneled clean energy and manufacturing investment into red districts in part to cultivate Republican support for renewables — and to protect those investments no matter who is president.
As a result, for the past six months, clean energy executives have absorbed advice telling them to fly below the radar. Stop using the word “climate” and start using words like “common sense” when you talk to lawmakers. (As a communications and policy strategist who works extensively on climate issues, I’ve given that specific piece of advice.)
But far too many companies and industry groups went much further than tweaking their messaging. They stopped publicly advocating for their interests, and as a result there has been no muscular effort to pressure elected officials where it counts: their reelection campaigns.
This is part of a broader lack of engagement with elected officials on the part of clean energy companies. The oil and gas industry has outspent clean energy on lobbying 2 to 1 this year, despite the fact that oil and gas faces a hugely favorable political environment. In the run up to the last election, the fossil fuel industry spent half a billion dollars to influence candidates; climate and clean energy advocates again spent just a fraction, despite having more on the line. My personal preference is to get money out of politics, but you have to play by the rules as they exist.
Even economically irresistible technologies can be legislated into irrelevance if they don’t have political juice. The last-minute death of the mysterious excise tax on wind and solar that was briefly part of the One Big Beautiful Bill Act was a glaring sign of weakness, not strength — especially given that even the watered-down provisions in the law will damage the economics of renewable energy. After the law passed, the President directed the Treasury Department to issue the strictest possible guidance for the clean energy projects that remain eligible for tax credits.
The tech industry learned this same lesson over many years. The big tech companies started hiring scores of policy and political staff in the 2010s, when they were already multi-hundred-billion dollar companies, but it wasn’t until 2017 that a tech company became the top lobbying spender. Now the tech industry has a sophisticated influence operation that includes carrots and sticks. Crypto learned this lesson even faster, emerging almost overnight as one of the most aggressive industries shaping Washington.
Clean energy needs to catch up. But lobbying spending isn’t a panacea.
Executives in the clean energy sector sometimes say they are stuck between a rock and a hard place. Democrats and the segment of potentially supportive Republicans at the local and federal levels talk and think about clean energy differently. And the dissonance makes it challenging to communicate honestly with both parties, especially in public.
The clean energy industry should recognize that the safest ground is to criticize and cultivate both parties unabashedly. The American political system understands economic self interest, and there are plenty of policy changes that various segments of the clean energy world need from both Democrats and Republicans at the federal and state levels. Democrats need to make it easier to build; Republicans need to support incentives they regularly trumpet for other job-creating industries.
The quality of political engagement from clean energy companies and the growing ecosystem of advocacy groups has improved. The industry, disparate as it is, has gotten smarter. Advocates now bring district-by-district data to policymakers, organize lobby days, and frame clean energy in terms that resonate across the aisle — national security, economic opportunity in rural America, artificial intelligence, and the race with China. That’s progress.
But the tempo is still far too low, and there are too many carrots and too few sticks. The effects of President Trump’s tax law on energy prices might create some leverage. If the law damages renewable energy generation, and thereby raises energy prices as energy demand continues to rise, Americans should know who is responsible. The clean energy sector has to be the messenger, or at least orchestrate the messaging.
The campaigns write themselves: Paid media targeting members of Congress who praised clean energy job growth in their districts and then voted to gut jobs and raise prices; op-eds in local papers calling out that hypocrisy by name; energy workers showing up at town halls demanding their elected officials fight for an industry that’s investing billions in their communities; activating influencers to highlight the bright line between Trump’s law and higher electricity bills; and more.
If renewable energy is going to grow consistently in America, no matter which way the political wind blows, there must be a political cost to crossing the sector. Otherwise it will always be vulnerable to last-minute backroom deals, no matter how “win-win” its technology is.
On IRA funds, rescissions, and EV battery technology
Current conditions: The National Weather Service is advising Americans in 11 states affected by heat waves to avoid coffee and alcohol due to dehydration risk • There have been more wildfires in London this summer than in all of 2024 • We’re at the halfway point in climatological summer and the United States’ hottest day of the year — 124 degrees Fahrenheit in Death Valley, California, on Monday — may now be behind us.
It has long been a “big mystery” how much grant funding from the Inflation Reduction Act the Biden administration ultimately got out the door before leaving the White House. Previously, the administration had announced awards for about 67% of the $145.4 billion in grants. Still, it wasn’t until Republicans in Congress began their rescissions of the bill’s unobligated funds that a fuller picture began to emerge.
According to reporting by my colleague Emily Pontecorvo, the Biden administration spent or otherwise obligated about $61.7 billion before leaving office, with President Trump’s One Big Beautiful Bill clawing back $31.7 billion from 47 IRA programs. Programs that had the greatest proportion of their funding obligated include:
There’s a lot more in the data to dig through, too, which Emily does here.
Senate Republicans voted narrowly Tuesday evening to advance President Trump’s $9.4 billion rescissions package, with Vice President JD Vance casting the tie-breaking vote. Three Republican senators — Mitch McConnell of Kentucky, Susan Collins of Maine, and Lisa Murkowski of Alaska — joined Democrats in opposing the package. Congress must vote to approve the rescissions by Friday to meet a statutory 45-day deadline that began when President Trump sent his proposal on June 3. The vote-a-rama is set to begin Thursday afternoon.
The proposed package would eliminate $1.1 billion from the Corporation for Public Broadcasting, which funds PBS and NPR, as well as large portions of foreign assistance programs. (A controversial plan to cut $400 million from the country’s AIDS relief program, known as PEPFAR, was ultimately removed to convince Republican holdouts.) But as I’ve written before, the package also takes aim at $1.7 billion of the $3.6 billion appropriated for the Economic Support Fund, which has historically been used to work with international partners to mitigate the impacts of climate change, as well as $125 million from the Clean Technology Fund, which provides financial resources for developing countries to invest in clean energy projects. The White House has said the programs do not “reflect America’s values or put the American people first.”
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China announced Tuesday that to protect the valuable breakthroughs that have allowed it to produce inexpensive electric vehicles, it will begin to restrict “eight key technologies for manufacturing [EV] batteries,” The New York Times reports. The move, which is effective immediately, will require a license from the Chinese government before any technologies can be transferred overseas “through trade, investment or technological cooperation.”
The move follows pressure by the European Union on Chinese EV and battery manufacturers to build factories within the bloc. As I covered in Heatmap AM yesterday, electric vehicle sales are booming in China in large part due to their affordability, with the nation being the “only large market where EVs are on average cheaper to buy than comparable combustion cars,” BloombergNEF has found. Though lithium-ion phosphate battery technology originated in the United States more than three decades ago, Chinese companies BYD and CATL have “figured out a way to further increase the number of recharges, making it comparable to more traditional battery chemistries,” in addition to advances in mass-production and capacity, the Times adds.
The third quarter of 2025 will “likely” see record sales of electric vehicles in the United States as would-be buyers rush to use the $7,500 tax credit before it expires on September 30, Cox Automotive’s Kelley Blue Book reported this week. Electric vehicle sales were lower in Q2 of 2025 than in 2024 by 6.3%, with 310,839 new EVs sold, marking “only the third decline on record, and a sign of a more mature market,” Stephanie Valdez Streaty, senior analyst at Cox Automotive, said in a statement. Additionally, sales of used EVs — only a third of which had qualified for government incentives anyway before those were eliminated — are up, with 100,000 units sold in Q2. But the real story will be what happens in Q3, where there’s “about to be a fire sale” as consumers race against the clock, Andrew Moseman writes for Heatmap. If you’re among the shoppers, he’s got the scoop on EV deals here.
The United States will either “reform” the International Energy Agency or “withdraw,” Energy Secretary Chris Wright told Bloomberg Tuesday during the Pennsylvania Energy and Innovation Summit at Carnegie Mellon University. The IEA, which was originally established to focus on oil security during the 1970s, has been characterized by Republicans as becoming a “cheerleader” for the renewable energy transition, in the recent words of Senator John Barrasso of Wyoming. Wright echoed those concerns in his conversation with Bloomberg, telling the publication that the IEA’s projections that oil demand will plateau this decade are “total nonsense.” Despite the threats, Wright stressed that his “strong preference” for handling the IEA is “to reform it.”
Several major beauty brands, including L’Oréal Paris and Neutrogena, are set to include environmental impact ratings on their packaging. “The EcoBeautyScore” — which runs from A to E — “indicates the environmental footprint of beauty products based on its entire lifecycle, from ingredients to packaging and how it is disposed of,” Cosmetics Business reports.
Rob does a post-vacation debrief with Jesse and Heatmap deputy editor Jillian Goodman on the One Big Beautiful Bill.
It’s official. On July 4, President Trump signed the Republican reconciliation bill into law, gutting many of the country’s most significant clean energy tax credits. The future of the American solar, wind, battery, and electric vehicle industries looks very different now than it did last year.
On this week’s episode of Shift Key, we survey the damage and look for bright spots. What did the law, in its final version, actually repeal, and what did it leave intact? How much could still change as the Trump administration implements the law? What does this mean for U.S. economic competitiveness? And how are we feeling about the climate fight today?
Jillian Goodman, Heatmap’s deputy editor, joins us to discuss all these questions and more. Shift Key is hosted by Jesse Jenkins, a professor of energy systems engineering at Princeton University, and Robinson Meyer, Heatmap’s executive editor.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, YouTube, or wherever you get your podcasts.
You can also add the show’s RSS feed to your podcast app to follow us directly.
Here is an excerpt from our conversation:
Robinson Meyer: I want to ask a version of the Upshift / Downshift question of both of you, which is, how are you feeling?
Jillian Goodman: Dizzy. I’m feeling dizzy.
Jesse Jenkins: I would like a break. Yes.
Meyer: You both had your faces up against the coalface of this policy change over the past two weeks. And I’m not someone who thinks how we feel about climate change is always the most salient question. At some point of working on it professionally, I think one just kind of is like, well, this is the thing I work on, and I get up in the morning and I try to make it better, and it doesn’t really matter whether I’m optimistic or pessimistic at the moment because you just keep pushing. That’s how it works.
Jenkins: I think it’s how you survive in this game this long, is adopting an attitude like that to some degree.
Meyer: The U.S. just went through a kind of clattering change to its energy and climate policy and got rid of a number of policies that, although flawed, were pushing the U.S. energy system in the right direction, and were a real vote of confidence and of good faith in the energy transition. Has watching the events of the past two weeks made you feel pessimistic about the energy transition to come? Or are you feeling like, you know, for a world where Trump won, for a world where the U.S. faced the constraints and the political environment that it did in 2023 and 2024 and 2025, we can work with this and there’s gonna be new stuff coming down the pipeline and we’re gonna keep deploying.
Goodman: I will say, kind of similar to you, Rob, doing this work is sort of my way of processing my climate anxiety, or at least putting some kind of wall of professionalism between that climate anxiety and my daily life. Like, this is my contribution, and I think about it as a professional, and I don’t really think about it as a human as often.
I will say, it’s shocking to me how much of a … you know, it is not a 100% policy reversal, but the extent to which the government of the United States was willing to throw out its existing climate policy that took however many years and decades to get to just really kind of floors me. And it’s the kind of thing that we can’t do again, at least not in this way. It’s not that U.S. companies will never again trust a climate-oriented tax credit. I think that’s a bit of an overstatement. But this approach has been tried, and then it’s been undone. And so whatever approach is tried in the future will have to be something new, and it’ll have to be motivated by different arguments, and it will have to have different structures. And that project, I think, is also kind of daunting.
Jenkins: Yeah, so look, this is a terrible piece of policy for the United States, and for the world. And so on the one hand, I’m mad as hell about it, right? I mean, we haven’t even talked about the broader effects beyond climate of this bill. It’s going to kick nearly one in 20 Americans off of their health insurance. It’s going to explode the deficit so that we can mostly give tax cuts to wealthy people and corporations who don’t need it. It’s going to reduce food stamp spending for people who can’t afford to eat so that people who can afford first class flights can have another vacation. Like, this is just bad policy, and it is a bad way to do energy policy, to completely reverse course just because the other guy won the election, rather than to have a more thoughtful rationalization of the tax code for energy investment.
I think it’s particularly scary to think about the implications for our automotive sector, having basically replaced a pretty thoughtful and fairly successful domestic industrial strategy around EVs and batteries with basically nothing except for some subsidies that build a wall around the United States is really concerning.I don’t know that we’re gonna have a globally relevant auto industry in five years …
Mentioned:
The REPEAT Project report on what the OBBBA will mean for the future of American emissions
The Bipartisan Policy Center’s foreign entities of concern explainer
The new White House executive order about renewables tax credits
And here’s more of Heatmap’s coverage from the endgame of OBBBA.
This episode of Shift Key is sponsored by …
The Yale Center for Business and the Environment’s online clean energy programs equip you with tangible skills and powerful networks—and you can continue working while learning. In just five hours a week, propel your career and make a difference.
Music for Shift Key is by Adam Kromelow.