EPO will be administering two IRA-funded rebate programs for low to moderate income households. The rebate amounts and income eligibility limits are set by the IRA legislation. The Home Efficiency Rebates Program will allow states to incentivize whole-house energy savings retrofits for homeowners. The Home Electrification & Appliance Rebate Program will consist of point-of-sale consumer discounts on the purchase of high-efficiency electric home appliances. To stay up to date, there are two websites where you can register to receive email updates about these programs as they develop: the White House Clean Energy and the DOE Home Energy Rebate Program.
On July 27, 2023, DOE released the Home Energy Rebate Program guidance. Utilizing this guidance, EPO is currently working to design the rebate programs specifically for Pennsylvanians. Upon design completion and subsequent DOE approval of the programs, the Home Energy Rebates will be open to Pennsylvania residents. EPO anticipates that the rebates will be available to Pennsylvania residents in mid-2024.
(All tax credits mentioned below are effective for the 2023 calendar year)
These programs will be managed through IRS tax credits. Please check with your tax advisor for further details:
- New Energy Efficient Home Credit:
- Tax credit for homebuilders.
- $2,500 for new homes meeting Energy Star standards; $5,000 for certified zero-energy ready homes. For multifamily, base amounts are $500 per unit for Energy Star and $1000 per unit for zero-energy ready.
- Energy Efficient Home Improvement Credit:
- Provides a tax credit for energy-efficiency improvements of residential homes.
- Base Credit Amount: 30% of cost, with limits for each type of improvement and total per year. Credit capped at $600 for “energy property,” e.g. efficient heating and cooling equipment; $600 for windows; $250 per door, $500 total for doors; $2,000 for heat pumps. Total annual credit capped at $1,200, with a separate annual $2,000 limit for heat pumps. $150 credit for home energy audits.
- Clean Vehicle Credit (Electric Vehicles):
- Provides a maximum $7500 tax credit for consumers purchasing new qualifying clean vehicles, including battery electric, plug-in hybrid, or fuel cell electric vehicles.
- Vehicle must meet certain standards for North American assembly; the battery’s components must meet certain standards for manufacturing or assembly; and the battery’s critical minerals must meet certain requirements for sourcing or processing in the United States or from trusted trade partners.
As part of the IRA, the U.S. Environmental Protection Agency (EPA) is administering a new grant program to combat damaging climate pollution. The Climate Pollution Reduction Grants (CPRG) program will use the funding to provide grants to states, local governments, tribes, and territories to develop climate action plans and implement projects to reduce greenhouse gas emissions and other air co-pollutants. This program aims to achieve three objectives:
- Tackle damaging climate pollution while supporting the creation of good jobs and lowering energy costs for families.
- Accelerate work to address environmental injustice and empower community-driven solutions in overburdened neighborhoods.
- Deliver cleaner air by reducing harmful air pollution in places where people live, work, play, and go to school.
By reducing these GHG emissions and other air pollutants, we can reduce the human impact on the environment and improve health outcomes related to climate hazards. EPA’s CPRG program has two funding phases: planning and implementation.
Phase I: Planning Grants
During the planning phase, the commonwealth will develop climate action plans that identify emissions reduction measures. The program requires developing two plans, a Priority Climate Action Plan and a Comprehensive Climate Action Plan. The content of these plans will overlap broadly and include an inventory of greenhouse gas emissions, quantified emissions reduction measures, and benefit analysis for affected populations. PA DEP has received $3 million in Federal grants to fund the creation of a Priority Climate Action Plan (PCAP) by March 1, 2024, and a Comprehensive Climate Action Plan (CCAP) by July 1, 2025.
The PCAP will include ways to reduce GHG emissions that could be put into effect quickly. The PCAP will also include GHG reductions that are a priority for Pennsylvania communities and businesses, focusing on strategies for the industrial sector.
The CCAP will build on the PCAP to include a broad list of GHG reduction strategies that could be used in Pennsylvania and include analyses that will help assess the benefits and impacts of these strategies.
Analyses will be conducted in the following areas:
- A benefits analysis for reductions of GHGs and co-pollutants (e.g., carbon monoxide, ground-level ozone and precursors, diesel and other particulate matter, nitrogen dioxide, and sulfur dioxide)
- A benefits analysis for Low-Income and Disadvantaged Communities
- Quantified GHG reductions
- A workforce planning analysis
During the implementation phase, EPA will award grant funding to implement the identified measures. Only emissions reduction measures identified in the Priority Climate Action Plan will be considered eligible for implementation funding, therefore it is vital that potential stakeholders engage with DEP early during this planning phase.
PA DEP will coordinate closely with municipal CPRG recipients (Delaware Valley Regional Planning Commission, Leigh Valley Planning Commission, Southwestern Pennsylvania Commission) to conduct robust outreach and engagement. PA DEP will include all interested parties, such as state and local agencies, industry stakeholders, the public, and individuals living in communities with environmental justice concerns. Air pollution control agencies and municipalities that do not receive a planning grant directly may participate as a collaborating entity. Participating in the planning phase is important for entities to be able to complete implementation grants.
Stakeholder and public outreach will begin in Fall 2023 and continue through the end of the CPRG Planning Phase in 2027.
We will post our public meeting schedule once confirmed. Please send an email to RA-EP-CPRG@pa.gov with questions about the program.
Phase II: Implementation Grants
Through the Inflation Reduction Act (IRA), $4.6 Billion in implementation grants will be available for eligible entities that seek to deploy GHG reduction strategies. The CPRG aims to have at least 40% of the benefits occurring in Low-Income and Disadvantaged Communities. Applications for these competitive grants are due by April 1, 2024. GHG reduction measures must be included in a PCAP to be considered for an Implementation Grant.
The US EPA anticipates announcing final details and issuing notices of funding opportunities for the CPRG implementation grants competitions in September 2023. More details will be available on the US EPA’s website.