DOE Restarts $8.8B Home Rebates, Bars Fuel-Switching
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- Department of Energy published new guidance (dated May 29, announced June 1) implementing $8.8 billion in home energy rebate programs — the $4.3 billion HOMES program offering up to $8,000 per household and the $4.5 billion HEEHR program offering up to $14,000 per household for qualifying electric equipment and appliances.
- The new guidance bars rebates for switching from oil, gas, propane, or other fossil fuels to electric heating; heat pump funding is now limited to new construction or households that already have electric heat, reversing the Biden-era push for fuel-switching.
- DOE also eliminated diversity, equity, and inclusion considerations and the Biden-era Justice40 environmental justice initiative, and now requires households to complete insulation and air-sealing upgrades before receiving appliance rebates.
- The restart follows a Trump executive order canceling the release of Inflation Reduction Act funds and a March 2025 court injunction won by a coalition of states that restored the $8.8 billion in program funding.
- States have three months to modify their programs to comply; most states plus D.C. have had at least some plans approved, while South Dakota declined to participate and Idaho's legislature has moved to stop participating.
- Clean energy advocates condemned the changes: Evergreen Action's Tony Sirna said eliminating electrification funding is "flatly illegal," and Sierra Club's Srinidhi Sampath Kumar said limiting fuel-switching provides "a lifeline" to fossil fuel companies.
Why it matters: Households hoping to use federal rebates to ditch gas or oil heating for electric heat pumps will find that door shut under the new DOE rules, even though the $8.8 billion in program funding itself survived the legal challenge. States now have 90 days to rewrite program rules around the narrowed eligibility, and the insulation-first sequencing requirement will further slow appliance upgrades for families planning whole-home retrofits.
