HVAC rebates dodge chopping block — but remain in limbo

The ‘big, beautiful bill’ working its way through Congress is set to deliver a blow to the HVAC industry by nixing two energy-efficiency tax credits at the end of this year, but a separate pair of HVAC-focused rebate programs has remained largely unscathed.  

Catch up quick: The Inflation Reduction Act (IRA) in 2022 earmarked nearly $9 billion for states to provide consumers with point-of-sale rebates for installing qualifying HVAC equipment. 

What’s happening: Both the House and Senate’s versions of the bill make no mention of the rebate programs — though a funding freeze that President Trump instated in January has left many states’ programs in limbo, despite being intended to last just 90 days. 

• State of play: 12 states, plus D.C., have at least one of two programs up and running, while 36 states remain in a holding pattern, as the administration continues to “review” all Biden-era funding decisions. (Idaho and South Dakota declined to participate.)

Zoom in: Vermont, for instance, had one of its two programs “conditionally” approved by the Biden administration, but since then, it hasn’t received next steps from the current Department of Energy, which oversees the programs. 

• “Candidly, we were concerned that the funding may just not come through at all, so we essentially have paused our planning efforts,” Melissa Bailey, a state energy director, told Heatmap News. 
• “Anytime we bring up [the program], verbally on calls and email, it’s just this kind of standard language that is, thank you for your patience, we’ll let you know when we’re ready to talk about it,” she added. 

Yes, but: While uncertainty lingers for many states, Energy Secretary Chris Wright on June 10 confirmed that the reviews are still ongoing. 

• “We got a process in place, we have a team in place,” he said. “And so by the end of this summer or middle of this summer we’re going to have clarity on most of the big projects.”

Looking ahead: Since the IRA authorized the $9 billion through 2031, barring Congress or the Energy Department deciding to nix the rebate programs, and assuming approvals resume, contractors still have several years to take advantage of them.