Canary Media’s Electrified Life column shares real-world tales, tips, and insights to demystify what individuals can do to shift their homes and lives to clean electric power.
The election of Donald Trump throws a big question mark over the fate of clean energy investments under President Joe Biden’s signature climate law, the Inflation Reduction Act. During his campaign, Trump promised to roll back IRA funds, including billions of dollars for households to buy new heat pumps, rooftop solar, electric vehicles, and other clean energy alternatives.
It’s too soon to say how many of Trump’s pledges will end up materializing. Climate advocates argue that one reason for optimism is the proven popularity of the IRA’s consumer incentives. In 2023, over 3.4 million households received $8 billion in tax credits to make their homes more energy efficient — more than double the amount projected by federal officials.
Still, there’s “a very real possibility” that the next administration will shave down home energy rebates and tax credits, said Ingrid Malmgren, senior policy director at the EV advocacy group Plug In America.
That’s because the incoming Republican-majority Congress will likely extend tax cuts passed under Trump in 2017, which the Congressional Budget Office estimates would add close to $5 trillion to the national debt over the next decade. Lawmakers looking to offset that cost have signaled that IRA-related funding, including consumer incentives like the federal EV tax credit, could be on the chopping block.
The clean energy advocates that Canary Media spoke to stressed that if you want to benefit from household rebates and tax credits — which can offset up to 30 percent of the cost of home electrification and energy efficiency upgrades — the sooner you act, the better.
“Regardless of the politics in Washington, consumers across the country should be taking advantage of these incentives to cut their energy bills as soon as they can,” said David Friedman, senior director of federal policy at the electrification nonprofit Rewiring America.
Here’s what we know so far about the future of IRA money for households under the Trump administration — and how you can make use of existing incentives in the next few months.
What’s going to happen to IRA funding for consumers?
Funding for home electrification under the IRA falls into two buckets: The first is tax credits, which lower your federal tax bill to offset the costs of electric appliances and efficiency upgrades. The second is rebates, which are distributed through states and provide discounts for low- and moderate-income households at the point of sale. For more information on the different types of funding available, check out Canary Media’s cheat sheet for navigating the IRA’s consumer incentives.
Policy analysts say that it’s unlikely GOP lawmakers will pursue a full repeal of the IRA, given that the majority of clean energy and manufacturing investments under the law have flowed to Republican districts. But Republican lawmakers could still chip away at consumer tax credits to offset the costs of extending Trump’s 2017 Tax Cuts and Jobs Act, due to expire at the end of 2025. Any effort to rescind or limit IRA funds would require legislative action. Republicans, who hold narrow majorities in both the House and Senate, would likely need to use a process known as budget reconciliation to avoid the filibuster.
Household rebates not yet awarded to states, which must first apply for federal funding and receive approval, could also be at risk. So far, the District of Columbia and 10 states have launched rebate programs, including Arizona, Colorado, Georgia, New York, and Wisconsin. Eight other states have been approved for funding and are taking final steps to set up their programs. You can see if your state is offering rebates yet on the Department of Energy’s home rebate tracker.
Legal experts say that while funding already committed to states would be difficult to pull back, the incoming administration could potentially delay review for those awaiting approval or withhold unspent funds, although researchers at the Sabin Center for Climate Change Law at Columbia University wrote that doing so would likely prompt court challenges.
All 50 states except for South Dakota have applied or plan to apply for rebate funding, and 38 have already submitted applications. Policy experts expect that more will follow as the January 31 application deadline approaches. Since the election, 11 states, including Kansas, Montana, Texas, and Ohio, have submitted applications.
