Navigating Inflation Reduction Act Rebates for Energy Efficiency Improvements to Multifamily Buildings
With growing emphasis on sustainable energy solutions, the U.S. government has introduced rebates aimed at improving residential energy performance. While each state, except South Dakota, will participate in these programs, understanding the nuances of each rebate is crucial to maximizing benefits.

HOME Rebate: Boosting Whole-House Energy Performance
The HOME Rebate is designed to reward comprehensive, performance-based energy upgrades in homes. Here’s how it works:
- Eligibility: To qualify, you need to achieve at least 20% energy savings over a standard reference design. If you reach 35% or more savings, the rebate amount doubles.
- 20% to less than 35% savings: You can earn $2,000 per dwelling unit, with a cap of $200,000 per building.
- 35% or greater savings: This increases the rebate to $4,000 per dwelling unit, with a maximum of $400,000 per building.
- Additional Benefits for Low- to Moderate-Income (LMI) Households: If at least 50% of the units in a building are occupied by LMI households, rebate amounts double to $4,000 or $8,000 per unit, covering up to 80% of project costs with no building cap.
- What qualifies as LMI? This refers to households with total annual income less than 80% of the Area Median Income (AMI).
- Alternative Calculations: There’s also an alternative method for older buildings that might struggle to meet the modeled targets, allowing flexibility for energy savings measurement.
- Timing: The rebate covers improvements made from August 16, 2022, through September 30, 2031.
- Limitations: This rebate cannot be combined with any other federal grant or rebate, such as the HEEHR Rebate.
HEEHR Rebate: Advancing High-Efficiency Electric Homes
The High-Efficiency Electric Home Rebate (HEEHR) targets energy-efficient upgrades directly at the point of sale. It’s structured to support owners of multifamily buildings, where at least half of the residents are low- or moderate-income households.
- Eligibility for Multifamily Buildings: To qualify, a building must have at least 50% of residents with annual household incomes below 150% of the AMI—a different LMI threshold than the HOME Rebate.
- Rebate Amounts:
- Appliance Upgrades:
- $1,750 for a heat pump water heater
- $8,000 for a heat pump for space heating or cooling
- $840 for an electric stove, cooktop, range, oven, or a heat pump clothes dryer
- Appliances must either be part of new construction, replace a non-electric counterpart, or be a first-time purchase.
- Non-Appliance Upgrades:
- $4,000 for an electric load service center upgrade
- $1,600 for insulation, air sealing, and materials to enhance ventilation
- $2,500 for electric wiring
- All components must be Energy Star certified.
- Appliance Upgrades:
- Rebate Limits:
- The maximum rebate per dwelling unit is $14,000.
- For households earning between 80% and 150% of AMI, the rebate covers 50% of project costs.
- For those earning below 80% of AMI, the rebate covers 100% of project costs.
- Timing & Limitations: Similar to the HOME Rebate, this rebate also cannot be combined with other federal programs, such as the HOME Rebate.
Next Steps for Maximizing Rebate Benefits
Both programs offer significant financial incentives for improving energy efficiency in residential properties, particularly for lower-income households. Before starting any project, consider:
- Assessing Energy Savings Potential: Determine whether you can achieve the required energy savings levels, considering alternative calculations for older buildings.
- Confirming LMI Status: Verify income levels to ensure eligibility for enhanced rebates.
- Reviewing Rebate Combinations: Since these rebates cannot be combined, strategically choose the one that aligns best with your project goals.
- Exploring Further Guidance: If eligibility appears uncertain, particularly near income cut-offs, additional guidance may be needed for clarification.
These programs represent a significant opportunity to support energy efficiency improvements while offsetting costs. If you have questions or need help with project planning, reach out for detailed assistance.