Home Electrification Incentives Coming to Californians

By MPCO Staff

The much-anticipated rollout of the Inflation Reduction Act (IRA) in California will begin this summer! New incentives will be available to low-to-moderate income homeowners to buy and install new electric appliances such as a new heat pump for space cooling and heating and the home electrical infrastructure to support them.

In the first phase of IRA funding in California, the rebates will be handled by contractors/installers through a statewide program called TECH Clean California, reducing the cost of electrification for the homeowner, according to the California Energy Commission (CEC).

Initial rebates for eligible multifamily and single-family homes will include:

• Heat pump HVAC (multifamily $1,000-$1,500 | single-family $4,000-$8,000)  

• Heat pump water heaters (multifamily $1,200-$1,750)  

• Electric upgrades (multifamily $3,000)  

• Electric wiring (multifamily $1,000)  

• Induction cooktop and/or heat pump dryers (multifamily $840) 

How IRA Rolls Out in California 

President Joe Biden signed the IRA into law to help households save money on energy bills, improve energy efficiency, reduce greenhouse gas emissions, and improve indoor air quality. IRA funds the federal Home Electrification and Appliance Rebates program (known as HEEHRA in California) for low- and moderate-income households.

Low-income households are households with a total family income of less than 80 percent of the area median income (AMI). Moderate-income households have a total family income between 80 percent and 150 percent of AMI.

This program will roll out in two phases in California with a total of $290 million available for electrification rebates. Phase 1 is funded with about $96 million. It jump-starts IRA-funded electrification by injecting the first round of funding into an existing statewide residential equipment rebate program that already meets the U.S. Department of Energy’s HEEHRA program criteria, TECH Clean California.

By funding TECH Clean California and using an established channel of installers statewide, phase 1 HEEHRA money will reach low-income households in disadvantaged communities faster by not needing the typical startup time that a new program launch requires such as working out the logistics of point-of-sale rebates. It accelerates the electrification of California homes by focusing first on existing homes, which are often not energy efficient. 

Direct-to-Consumer Rebates

The remaining $194 million in electrification rebates will be used for a retailer point-of-sale rebate program. The CEC plans to seek public input to develop and implement its HEEHRA retailer point-of-sale rebate program, which is phase 2. Workshops on the program are expected to take place in the summer of 2024.

Consumers can find information on the IRA program in California, including the direct rebates phase of HEEHRA and the HOMES whole-house energy efficiency program, on the CEC’s IRA web page. The page’s frequently answered questions section includes an estimated timeline of program rollouts.