South Dakota is exempt from the Inflation Reduction Act’s energy rebates

Some states have implemented rebates for 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 denied federal funding tied to two new programs created by the Inflation Reduction Act, a landmark climate law enacted in 2022.

The IRA made $8.8 billion available to consumers through two Home energy discounts programs.

Consumers can access up to $8,000 Home Performance Discountsand up to $14,000 Discounts on household electricity and appliances.

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

The two programs have different 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.

Almost every state has said it will start a rebate program for residents, according to a spokesman for the US Department of Energy.

State officials had an August deadline to formally decline the federal funds. They have January 31, 2025 deadline to submit a program application to the D.O.E.

South Dakota is the only state so far that has publicly said it will not administer the rebates.

“In good faith, we looked into this,” Jim Terwilliger, commissioner of the South Dakota Office of Finance and Management. he said during July 30 hearing credits. “We just don’t think it’s the right thing for South Dakota.”

States, which administer federal funds, have some leeway in program design. They must apply for financing and can distribute discounts to consumers after their application is approved.

New York began the first phase of sales on May 30.

Five others — Arizona, Maine, New Mexico, Rhode Island and Wisconsin — discount programs have since been launchedalso, according to data from the US Department of Energy on September 24.

“I expect more and more to come out,” said Kara Saul-Rinaldi, president and CEO of AnnDyl Policy Group, a consulting firm that focuses on climate and energy policy.

Several more states, as well as Washington, DC, have applied or been 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, those 26 states and the District of Columbia have applied for a total of $4 billion in funding so far, the DOE said.

The rebates are a new program, and “complex government programs like these take time and coordination to create,” according to a DOE spokesperson.

“The Inflation Reduction Act put states in charge of designing and implementing home energy rebate programs that fit their local needs,” the spokesman wrote in an e-mail. “Because each state has different resources and capabilities, each state’s timeline will be different.”

But South Dakota officials in August said they would not participate, the lone state so far to decline federal rebate funding.

“South Dakota will have no role in facilitating the Green New Deal,” Ian Fury, a spokesman for Gov. Kristi Noem, a Republican, said in an emailed statement.

States had one Deadline August 16, 2024 to formally reject the funds.

“We don’t think the administrative burden and cost of running such a program is the right thing to do, and we generally disagree with the policy,” Terwilliger, of the South Dakota Office of Finance and Management, said in July. hearing.

The Inflation Reduction Act allows states to use up to 20% of its funding for administrative purposes.

Fifty-one states and territories have applied to the DOE for timely administrative funding, the agency said.

THE $68.6 million of federal money earmarked for rebates in South Dakota will be redistributed among participating states.

Fury also noted that this is not the first time South Dakota has rejected federal spending. It was the only state that to reject extended unemployment benefits in 2020 during the Covid-19 pandemic, Fury said.

The Green New Deal is a climate change policy initiative supported by congressional Democrats beginning around 2019. Bipartisan legislation to create an energy rebate program existed nearly a decade earlier, as the Home Star Energy Retrofit Act in 2010.

The concept of consumer rebates linked to energy efficiency “predates the Green New Deal by many years”, Saul-Rinaldi said.

It appears that Florida officials have reversed course from their initial stance on the rebates.

Republican Gov. Ron DeSantis in 2023 had vetoed the state’s authority to spend about $5 million in federal funds to administer the energy rebate program. At the time, a spokesman for the state Department of Agriculture and Consumer Services told CNBC that Florida would not apply for rebates as a result.

Now, Florida is getting ready for a soft start to discount programs in late 2024 and a full launch in early 2025, according to information on government website.

A spokesman for the Department of Agriculture and Consumer Services did not return a request for comment on the change in position.

At a high level, consumers will be able to receive point-of-sale rebates when they purchase an appliance directly from a retailer or from a specialist contractor helping a household complete an efficiency project.

“Every state is getting closer [its program] otherwise, for many reasons,” Saul-Rinaldi said.

Many take them out gradually. For example, New Mexico is starting offering $1,600 off for low-income single-family home consumers who purchase insulation from a participating retailer.

Similar to other states, eligible New Mexico residents will later be able to access additional discounts such as:

• $8,000 for an ENERGY STAR qualified electric heat pump for space heating and cooling.
• $4,000 for an electrical panel.
• $2,500 for electrical wiring.
• $1,750 for an ENERGY STAR qualified electric heat pump water heater.
• $1,600 for air sealing. and
• $840 for an ENERGY STAR qualified electric heat pump clothes dryer and/or an electric range.

Consumers and contractors should consult their state energy department’s website to learn more about specific programs and eligibility, Saul-Rinaldi said.

The US Department of Energy recommends that households not wait to complete necessary energy upgrades or home projects if their state has not officially implemented rebates. They may be eligible for other federal programs, including tax deductionsthe Weather Assistance Programand more state, local and utility programs“, the agency he said.