Residents of These States to Qualify For Up to $8,000

Americans living in at least four states could start to see rebates worth $8,000 coming if their way if they fit a certain set of criteria.

The Inflation Reduction Act (IRA) originally passed in 2022. Part of the legislation called for homeowners across the country to earn special rebates on energy efficient appliances, and an expert told Newsweek how those savings can help down the line.

So far the rebates haven't made their way into Americans' hands though, but California, New York, New Mexico and Hawaii are about to shake that up.

The four states have started the application process with the U.S. Department of Energy to get the money flowing to homeowners. Previously, the IRA ruled that all the money from the $8.8 billion rebate program would need to be distributed through each state and added on the additional application process.

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Due to the new developments, residents in California, New York, New Mexico and Hawaii should potentially wait a few months before making any big home purchases.

That includes a range of energy-efficient appliances, from heat pumps to induction stoves. Still, those who need to urgently update their home appliances could still take advantage of the rebates down the line retroactively as long as your home update took place after August 2022.

What Rebates Are Available

A wide selection of rebates are available depending on what specific home appliance you update with a more energy efficient replacement.

That includes up to $8,000 for heat pumps. A lower amount of $1,750 is available for heat pump water heaters, and $840 is the potential offering for induction stoves. Another high amount of $4,000 can be earned for homeowners who make an electrical system upgrade.

All in all, a maximum of $14,000 is available to homeowners who make the full range of energy efficient home updates. Your full amount will also depend on your income range.

Other financial incentives have been passed for Americans who purchase an electric vehicle too.

So far, it is unknown when the rebates will fully go into effect and Americans can get the money in their hands, but a Hawaii state official told Bloomberg that homeowners could begin expecting the money in as early as the second half of 2024.

"Our current plan is to phase in a limited rebate offering beginning in the second half of 2024, with the aspirational goal of having the program fully operational by the end of 2024, contingent on DOE approvals," Claudia Rapkoch, the public affairs officer with the Hawaii State Energy Office, told Bloomberg.

According to Michael Ryan, a finance expert who runs michaelryanmoney.com, the rebates offer big savings not just in the checks but also how the energy efficient appliances work in the long run.

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An electric heat pump from an old furnace or air conditioner could save one household up to $1,000 yearly, while a simple heat pump water heater could net you an extra $400 after one year of use.

"Combine a few of those upgrades with rebates knocking 30-50% off upfront costs, and we're talking thousands in net savings over five to 10 years," Ryan told Newsweek. "Not just for wealthy families, but for everyday working Americans as well. That's money that can go towards other goals like paying down debts, building an emergency fund, or retirement investing."

The new appliances will also reduce carbon emissions, mitigating the looming climate change challenges facing America.

"States that were quickest to develop strong program plans and apply are seeing more generous rebates right now," Ryan said, adding that Americans shouldn't fret if their state's rebates seem slim at the moment.

"Funds will continue being allocated through 2027 as more states finalize their programs," Ryan said. "My advice? Keep checking for updates, as new rebates could open up for your area soon."