California launched a $80 million rebate program Tuesday aimed at helping low and moderate-income households electrify their homes, marking the state’s first rollout of federal funds from the Biden administration’s climate law, the Inflation Reduction Act.
The program, announced by the California Energy Commission (CEC) in partnership with the U.S. Department of Energy, targets multifamily buildings with rebates for energy-efficient upgrades, including heat pumps and electric appliances.
The initiative is part of California’s broader effort to decarbonize its buildings, which overwhelmingly use fossil gas for temperature control and cooking, to reduce greenhouse gas emissions and make homes more resilient to climate change.
“There’s a range of phenomenal clean energy technologies out there,” said DOE Deputy Secretary David Turk. “But for too long, these technologies have only been accessible to the wealthiest of Americans ... we’re flipping the script here to make sure that everyone has access to these energy saving and cost saving technologies.”
Applications are open on the TECH Clean California website for multifamily building upgrades, which cover a range of improvements, including heat pumps for heating and cooling, water heaters, and electric appliances like ovens and stoves. Rebates for single-family homes will launch later this month.
Rebates for multifamily housing range from $700 to $8,000 per unit, with a maximum rebate of $14,000 based on income level. Single family home rebates, meanwhile, will offer between $4,000 and $8,000 depending on household income.
Low-income households — those earning 80% or less of the area median income — will be eligible for the higher rebates, while moderate-income families, earning up to 150% of the area median income, will qualify for lower amounts.
The California Energy Commission estimates that about one-third of Californians qualify as low-income, while half fall within the low- or moderate-income brackets.
DOE leaders said they expect this help with up-front costs will enable homeowners to reap thousands of dollars in yearly energy cost savings while reducing the carbon footprint of their home.
Residential and commercial buildings account for a quarter of California’s greenhouse gas emissions, according to the Air Resources Board. The state is working towards its goal to reduce statewide GHG emissions to at least 40% below 1990 levels by 2030.
Current emissions are not dropping fast enough to reach that 2030 target, according to the latest data. California is also falling well short of its goal to install 6 million heat pumps by the same year — the latest data show there are currently 1.5 million.
Electricity-powered heat pumps warm or cool a building’s air more efficiently than gas-powered furnaces, according to experts, as do electric water heaters and induction stoves.
Several other home clean energy programs are coming soon to California through federal clean energy funding.
They include $291 million in home efficiency rebates, more than $500 million for no-cost upgrades to low-income residents, $30 million in free upgrades for tribal housing and another $30 million for low-cost clean energy borrowing .
A new state building code adopted by the CEC last month encourages all-electric appliances. Leaders said they expect the standards to spur the adoption of 500,000 new heat pumps, save billions in energy costs and cut millions of carbon emissions.
Gov. Gavin Newsom also signed a law creating a pilot program to decommission gas lines for selected neighborhoods and retrofit them for all-electric appliances. He also vetoed a major bill to require warning labels about the health risk of pollutants from gas stoves.
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