DOE unfreezes Home Energy Rebates, nixes gas-to-electric upgrades

The Department of Energy on Monday released guidance on two federal HVAC-focused rebate programs, including a change that would bar consumers from using the rebates to switch from gas to electric equipment. 

Catch up quick: The 2022 Inflation Reduction Act (IRA) allocated $8.8 billion to states to set up two point-of-sale rebate programs for qualifying consumers who make certain home upgrades, including gas furnaces and heat pumps. 

• However, in January 2025, President Trump ordered that disbursements be paused. At that time, 12 states and the District of Columbia had programs up and running, while the remaining states, excluding South Dakota, had been awarded funds and were awaiting approval to launch their programs. 
• After more than a year of delay, in mid-April 2026, Energy Secretary Chris Wright suggested that the funds would be released “in the near future” — potentially, he said when pressed about specifics, in a “few weeks.”

What’s happening: Monday’s guidance — which took effect on Friday, May 29 — marks that those funds have been released and will resume flowing to states. 

Yes, but: It also came with changes. The High-Efficiency Electric Home Rebates (HEEHR) program — one of the two — can no longer be used for fuel-switching upgrades; instead, rebates are allowed “for upgrading HVAC and appliances only from existing electric equipment to more efficient electric equipment,” according to the DOE. 

• Separately, the new guidance requires that “homes utilize rebates for insulation and air sealing prior to installing heating and cooling upgrades, unless they are already appropriately insulated and sealed to a DOE-approved, state-specified level.”
• Full HEEHR breakdown

Zoom in: The Home Owner Managing Energy Savings (HOMES) program also saw changes, including dropping a requirement that qualifying equipment meet certain Energy Star standards. 

• Meanwhile, Monday’s guidance allows the usage of rebate funds under both programs to “include warranties or accessories necessary for the base installation and operation of the retrofits.” 
• Full HOMES breakdown

Of note: The guidance is geared toward states, which design and implement the programs. While states with inactive programs may implement Monday’s changes before launching, those with active programs will have to tweak their existing programs to meet the new requirements, potentially creating disruptions for homeowners and contractors. 

Between the lines: The Department of Energy positioned some of the changes as expanding consumer choice and advancing affordability. Energy-efficiency groups welcome that funds are flowing again, but have slammed the agency over the changes.  

What they’re saying: “The Department of Energy has released common-sense revisions to program guidance to align requirements more closely with statutory requirements, advance affordability, ensure good stewardship of taxpayer dollars, and empower grantees to tailor their programs to local contexts and residents’ needs,” a DOE spokesperson told Homepros in an email. 

• “Rising energy bills are a key part of the housing affordability crisis in America. The energy efficiency measures and upgrades that are supported by these rebates will help lower bills and make homes more comfortable — this is welcome news for homeowners and the contractors who serve them,” Kara Saul-Rinaldi, Chief Policy Officer of the Building Performance Association, said in a statement.  

The other side: “The Trump administration couldn’t eliminate the popular Home Energy Rebates program outright, so instead they’re changing the rules mid-game in order to hand a win to the oil and gas industry,” Srinidhi Sampath Kumar, a director at the Sierra Club, said in a statement. 

• “Blocking folks from swapping an inefficient gas appliance for a cleaner, more affordable one will hurt low- and moderate-income families the most, the very people these programs were designed to help,” he added. 

Looking ahead: States with active programs have three months to modify their programs to comply with the new guidance, Inside Climate News reported. 

• See an up-to-date map of program status across the U.S.