By Priya Pandey 

At first glance, 2022’s landmark Inflation Reduction Act (IRA) might not seem like an anti-poverty program.  However, the IRA’s home energy rebates will provide hundreds of billions of dollars to seed green innovations, including some that can have a big impact on people with low incomes. The IRA will increase fairness in our tax system, reduce health care costs, and address the climate crisis through critical investments. This includes a $391 billion investment to support the transition into clean energy.  While much of this investment will reach households through tax credits, these credits are not refundable, and therefore won’t directly benefit low- to moderate-income households that don’t owe federal income taxes. To address this inequity, the IRA includes $8.8 billion (about $27 per U.S. resident) in rebate programs to help households with lower incomes save on energy bills, upgrade homes to include more clean energy equipment, and improve energy efficiency overall. Anti-poverty advocates have a chance to weigh in now to make sure these rebates successfully reach the people who need them most. 

The effective implementation of these rebates is critical to achieving both equity and the IRA’s climate goals. Communities of color and people with low incomes are disproportionately impacted by the harms of the climate crisis and deal with the negative consequences of environmental racism. Redlining and racial segregation have caused environmental harms to be more prevalent in areas where communities with low incomes and communities of color reside. Additionally, households with low incomes tend to face higher energy burdens resulting from living in older homes or in homes equipped with outdated appliances.  As climate change continues to create extreme weather conditions, heating and cooling bills are becoming even more burdensome for households struggling to make ends meet.  

The energy rebate program has the potential to make a strong impact in reducing energy costs, providing assistance to upgrade homes, and helping to improve indoor air quality, safety, and comfort. To achieve this outcome, program administrators must place equity at the center of the implementation of this program. The funds will be administered through offices in states and tribal governments that oversee energy programs with support and oversight from the U.S. Department of Energy. We know from programs such as Medicaid and child care subsidies that the way states administer federal programs can vary greatly, with significant consequences for racial equity.  Advocates now have a chance to weigh in on how the program can be more equitable by responding to the U.S. Department of Energy’s Request for Information (RFI) on the development of best practices for the Home Energy Rebate program.  

Anti-poverty advocates may not be experts on energy-efficient home appliances.  But they can help make the program work better by sharing best practices for community engagement to help reach more people about the program. The RFI includes questions on income verification, outreach, and how the program can reach more people who live in subsidized housing. Families and households with low incomes can benefit tremendously from these rebates, and advocates can play an important role by weighing in and shaping the program to have maximum uptake; using every possible pathway to engage communities who are eligible for the benefit; and making the credits easy to obtain. The RFI closes on March 3 and can be found here. Please offer your suggestions for how to make this rebate program as accessible as possible to the people who will most benefit from it.