Energy

Federal Money to Boost R.I.’s Energy Efficiency, Heat Pump Rebate Programs

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PROVIDENCE — Rhode Island’s energy-efficiency programs will be kicked into high gear next year, thanks to an influx of federal dollars.

On Wednesday the state’s congressional delegation announced $63.8 million from the Inflation Reduction Act will be allocated to the state Office of Energy Resources (OER) in 2023 to jump-start a new pair of energy-efficiency and home heat pump rebate programs.

Under federal guidelines, homeowners will be eligible for rebates of up to $2,000 for any retrofit that reduces energy use by 20% or more, and up to $4,000 if the retrofits reduce energy use by 35% or more in the home energy performance-based rebate program. Maximum rebates are doubled for retrofits in low- and moderate-income homes.

Rhode Island families, as part of the programs, will also be eligible for rebates to upgrade from fossil fuel appliances to electric energy-efficient ones. Households in the program will have rebates capped at $14,000, including an $8,000 cap for heat pump costs, $1,750 for a heat pump water heat, and $4,000 for panel or service upgrades.

“These rebate programs will help homeowners cover the costs of energy-efficient home improvements and upgrades to new, greener electric home appliances.  That’s a win-win for families and our environment,” Sen. Sheldon Whitehouse, D-R.I., said.

Nationwide, the U.S. Department of Energy (DOE) announced this week it was allocating nearly $9 billion to states for each program. DOE estimates the energy-efficiency rebates would allow 1.6 million households to retrofit their homes, with the heat pump rebates incentivizing installation of a half-million new heat pumps and other improvements.

OER will be allocating $32 million for energy-efficiency rebates and another $31.8 million for the heat pump program. Both programs are expected to start next spring, following listening sessions conducted by DOE this year.

The rebates are coming as energy costs continue to skyrocket everywhere. State regulators approved a 47% hike in electric costs earlier this year, with state utility Rhode Island Energy citing increasing costs and demand for natural gas abroad.

Fifty-four percent of Rhode Island homes rely on natural gas for heat, with only 8% of homes relying on electricity. Another 32% heat their homes with heating oil, which has not significantly come down in price in many months.

Earlier this year Gov. Dan McKee announced a new High-Efficiency Heat Pump Program, allocating $25 million from American Rescue Plan Act dollars to spur installation of heat pumps and provide resources for workforce development in the HVAC sector. Eleven million dollars will go toward incentives — homeowners would be eligible for an incentive of $1,250 for every ton of cooling and heating capacity the heat pump equipment has — with another $7.2 million set aside for enhanced incentives in disadvantaged communities.

Switching a home from heating oil to a heat pump reduces emissions equivalent to taking a dozen cars off the road for a single year, according to an estimate by the Acadia Center, and homes will reduce their emissions by 58 tons over the life of the equipment.

The state’s current heat pump incentives are distributed by OER from Regional Greenhouse Gas Initiative proceeds and Rhode Island Energy from energy-efficiency funds.

OER has committed $2.75 million to its program, and from April to December 2021 helped 450 customers convert their heating systems to heat pumps.

Rhode Island Energy has awarded $3.1 million in rebates to customers who installed almost 4,000 central and mini-split heat pump systems.

The High-Efficiency Heat Pump Program is expected to start sometime next year.

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  1. This is great (and long overdue) news! Are there Heat Pumps that will retrofit to existing (and replace ) oil or gas fired FHW boilers and use the existing hotwater baseboard systems? Many older homes are not well suited to the contemporary heat pumps’ room-specific air handlers.

  2. If these heat pumps are running on electricity that has increased by 47% how is this going to be a savings for customers?

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