DNV’s Playbook for IRA Home Energy Rebate Program Success: Best Practices in Designing Programs for Equity

State Energy Offices are in the midst of developing plans for optimal implementation of the Inflation Reduction Act’s (IRA) Home Rebate programs. These programs are explicitly designed to serve Low and Moderate Income (LMI) households and advance environmental justice. By lifting up the 40% of the population that is considered disadvantaged, historically underserved, and that needs assistance to bring these technologies into their households, states have a better chance of accomplishing their ambitious clean energy and economic development goals.  

To emphasize equity, the Department of Energy (DOE) directs states to carve out certain amounts of rebate funding to be allocated to low-income households. States will also be required to offer more generous rebates for LMI households and for projects located in Disadvantaged Communities (DACs). If states cannot show they are distributing dollars to LMI communities, subsequent tranches of funding will be held up. How can states ensure that their programs are designed with equity in mind? DNV has identified four principles for prioritizing equity in Home Rebate program design.

Communication is key 

Serving LMI communities starts with good communication. Programs will only be successful if the needs of LMI communities are integrated into program design, and those needs will vary by community. Bi-direction communication with communities is essential to understanding their needs and concerns and to give them an active role in program design and decision making. Community involvement will result in programs that better meet individual community needs and are more likely to be accepted and invited by those communities. DNV suggests the following best practices for effective communication:

  • Identify community-based organizations already embedded in disadvantaged communities that are trusted sources of information, especially related to energy issues. 
  • Be proactive in outreach and meet communities “where they are” (reach them in the places where they are already gathering and share program information). 
  • Host focus groups and public meetings in these communities and engage in two-way conversations to solicit feedback about what they want and need from programs, and compensate them for their time.  
  • Communicate in their language and in terms that resonate with them, culturally, by understanding: 
    • Local immigrant populations 
    • Tribes, Pueblos, and other indigenous communities in the state  
    • Accessible language, for example, to the deaf community.  
  • Host online, one-stop-shop information hubs (fit for mobile) can be used to show program information, such as eligibility rules and directions for how find a contractor. 
  • Identify high priority DACs and prioritize engagement in these areas. 
  • Communicate benefits of participating in the programs in ways that are relevant to them, make sure they understand potential adverse impacts (e.g., what to do if new equipment fails), and what to expect from new technologies. 

Cost should not be a barrier

With money pouring in from the federal government, states can promote deep retrofit projects for a set of priority households. States should leverage various sources of funding to serve these households and promote equity by layering complementary funding sources to drastically reduce or completely eliminate the upfront cost to the household. Many LMI households are interested in these technologies and can benefit from them, but upfront cost remains a barrier, especially for the most resource-constrained households. DNV recommends identifying how the following sources of funding can be leveraged to mitigate upfront costs: 

  • Weatherization Assistance Program – states can leverage this program for weatherizing homes, which has existed since the American Recovery and Reinvestment Act, is also administered by state energy offices, and was given a boost in funding through the Investment in Infrastructure and Jobs Act (IIJA, aka the Bipartisan Infrastructure Bill). 
  • Utility low-income programs – many utilities offer special incentives for income-qualified households through their demand side management programs. 
  • Health and safety/home improvement funds – structural issues or issues with damage to the home (such as mold) should not be a barrier to participation. Some states have funds available to cover these types of home improvements that will then enable the energy efficiency and electrification projects.  
  • Utility or state financing programs – many states and utilities offer low or no interest loans for energy efficiency projects, which may be a good option for households who don’t qualify for the full cost of the project to be covered, but still need help with the remaining cost. 

Participation should be easy 

Many LMI households are time- and resource-constrained and, despite a strong desire to participate, may not be able to navigate the programs. Any friction in the participation process may result in their attrition from the program. States should work through the following considerations to ease the participation process:  

  • Take advantage of DOE’s allowance for categorical eligibility – if households have already gone through the onerous process to gain access to public assistance programs, states should leverage those programs, working with their sister agencies, to pre-qualify households for the Home Energy Rebate Programs.
  • States may want to allow for self-attestation if their implementation team has a robust verification process on the back end. 
  • Contractors and trade allies should be qualified to serve this customer segment, able to communicate with them, educate them about the program, and guide them through the process.  
  • The program may consider online, in person, or over the phone staffing to answer questions, help participants navigate eligibility, help them fill out the application, or provide other support.  

Workforce development can promote equity too 

Workforce development is essential component of the Home Rebate Programs and many states are concerned about possible shortages of workers available to deliver these projects. Pairing workforce development with a focus on equity and sustainability could deliver a win-win for states.  As states plan for their parallel workforce development activities, it is vital that they engage with LMI communities and ask important questions, such as:   

  • What types of jobs are resulting from these programs? Short term/long term? Jobs with supportive working conditions or hazardous conditions? 
  • Who is doing this work, who is moving into these jobs, and what communities are they are coming from? 
  • Are they keeping these jobs? What does retention look like for these jobs?  
  • What are the barriers to helping people get and keep these jobs? What sort of wrap around services are needed to recruit, place, and maintain people in these jobs? 
  • What impact does the increased employment have on the local economy? 

 

Let’s discuss: Implementing these recommendations is a large undertaking and easier said than done. DNV is here to help. Our Energy & Climate Equity team has demonstrated experience in:  

  1. Communication and identification of disadvantaged populations and their needs 
  2. Design and implementation of programs 
  3. Assessment of success of programs that serve vulnerable communities and households.  

We have developed tools and frameworks that help SEOs, implementers, and other partners innovatively address energy equity challenges. Connect with our team to discuss how we can help you design programs with equity in mind. 

 

Additional Resources 

Adaptive 4 Equity – DNV’s holistic framework for implementing equitable energy strategies 

Neighborhood Conversations – DNV’s guide for how to reach and develop programs for disadvantaged communities 

DNV’s Energy Efficiency landing page