South Dakota opts out of Inflation Reduction Act energy rebates

By Finance News On Oct 4, 2024

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A handful of states have rolled out rebates to consumers who make their homes more energy-efficient, just months after New York became the first state to do so, in May.

Meanwhile, South Dakota officials in August declined the federal funding, which is tied to two new programs created by the Inflation Reduction Act, a landmark climate law enacted in 2022.

The IRA earmarked $8.8 billion for consumers via two Home Energy Rebates programs.

Consumers can access up to $8,000 of Home Efficiency Rebates, and up to $14,000 of Home Electrification and Appliance Rebates.

Together, the two rebate programs aim to defray — or in some cases fully offset — the cost of retrofitting homes and upgrading appliances to be more energy-efficient. Such tweaks can help consumers cut their utility bills while also reducing planet-warming carbon emissions, officials said.

The two programs have varying rules that determine which consumers are eligible and how much money they can access. In some cases, rebates will depend on household income and a home’s overall energy reduction.

Nearly every state has indicated it will launch a rebate program for residents, according to a U.S. Department of Energy spokesperson.

State officials had an August deadline to officially decline the federal funds. They have a Jan. 31, 2025 deadline to submit a program application to the DOE.

South Dakota is the only state so far to have signaled publicly that it won’t administer the rebates.

“With good faith, we did look into this,” Jim Terwilliger, commissioner of the South Dakota Bureau of Finance and Management, said during a July 30 appropriations hearing. “We just don’t believe that it’s the right thing for South Dakota.”

Here are the states that have applied

States, which administer the federal funds, have some leeway relative to program design. They must apply for funding and can distribute rebates to consumers after their application is approved.

New York launched the first phase of its rebates May 30.

Five others — Arizona, Maine, New Mexico, Rhode Island and Wisconsin — have since launched rebate programs, too, according to U.S. Department of Energy data as of Sept. 24.

“I’m expecting more and more to roll out,” said Kara Saul-Rinaldi, president and CEO of AnnDyl Policy Group, a consulting firm focused on climate and energy policy.

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Many more states, as well as Washington, D.C., have submitted applications or had them approved, according to DOE data: California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Michigan, Minnesota, New Jersey, New Hampshire, Massachusetts, North Carolina, Oregon, Tennessee, Vermont, Washington and West Virginia.

Together, these 26 states plus the District of Columbia have applied for $4 billion in total funding so far,…