Which States Returned IRA Energy Rebate Funds? (And What It Means)
When the Inflation Reduction Act passed in 2022, it allocated roughly $8.8 billion for state-administered home energy rebate programs: $4.3 billion for HOMES (Home Owner Managing Energy Savings) and $4.5 billion for HEAR (High-Efficiency Electric Home Rebate Act). States had to apply for their allocations, then set up the administrative infrastructure to distribute the funds to homeowners.
Most states took the money and built out programs, some faster than others. But two states made a different choice.
Which States Returned the Funds?
Florida
Florida declined to apply for its HOMES/HEAR allocation under Governor Ron DeSantis, citing the program's administrative requirements and what his administration characterized as federal overreach into state energy policy. The state had been allocated approximately $346 million combined across both programs. By not applying and eventually allowing its application window to lapse, that money returned to the federal pool.
The practical effect: Florida residents cannot access the HOMES modeled-savings rebate (up to $4,000) or the HEAR appliance/electrification rebates (up to $14,000 in total) through any state-administered portal. There is no state equivalent that replaced it.
South Dakota
South Dakota similarly declined to participate, returning its allocation — roughly $20 million given the state's smaller population — citing skepticism about the program's long-term federal funding reliability and implementation complexity. For a rural state with a dispersed housing stock and limited state energy office capacity, the administrative burden was cited as disproportionate to the benefit.
Why Did They Return the Money?
The IRA rebate programs came with strings. States accepting HOMES and HEAR allocations had to:
- Create application and verification infrastructure for residents
- Hire or contract auditors and program administrators
- Comply with income verification requirements, especially for the income-qualified HEAR program (limited to households under 150% of area median income)
- Report detailed data on outcomes and expenditures back to DOE
- Prioritize low- and moderate-income households in certain funding tiers
For states with small energy offices and limited administrative capacity — or with governors philosophically opposed to the program's electrification focus — these requirements were either impractical or politically unacceptable.
The HEAR program in particular, with its income-qualification requirements and its emphasis on electrification (heat pumps, electric panels, EV chargers), drew resistance from states where natural gas has strong political support and where the income-first priority felt like an imposition.
What Happens to the Returned Money?
Returned allocations go back to the Department of Energy, which can redistribute them to other states that applied for additional funding or, in some cases, to underserved territories and tribal communities. The DOE has some discretion in how it handles reallocation, but the funds don't disappear — they move to jurisdictions that requested and can use them.
California, New York, and several other states that moved quickly to build out their programs have benefited from higher-than-expected final allocations as a result of other states' decisions not to participate. Residents in those states can check current availability through our California rebates page and New York rebates page.
What Options Remain for Florida and South Dakota Residents?
Losing access to state-administered HOMES and HEAR rebates doesn't mean all incentives are gone. Several alternatives remain operative:
25C and 25D Tax Credits — UPDATE: These Expired December 31, 2025
The federal 25C (Energy Efficient Home Improvement Credit) and 25D (Residential Clean Energy Credit) tax credits were among the most accessible IRA benefits because they required no state administration — homeowners claimed them directly on federal tax returns. However, the One Big Beautiful Bill Act, passed in late 2025, terminated both credits effective December 31, 2025. Purchases made in 2025 or earlier can still be claimed on 2025 returns, but the credits do not apply to purchases made in 2026 onward.
This is a significant change that affects all states, not just Florida and South Dakota. Anyone who purchased heat pumps, insulation, windows, or solar in 2025 should still file for the credit — it applies to those purchases. But 2026 buyers in any state have lost this pathway.
Utility Rebate Programs
Florida's major utilities — Florida Power & Light, Duke Energy Florida, TECO (Tampa Electric), and Gulf Power — all run their own rebate programs that exist independently of state or federal policy. These programs are funded by utility revenue and approved by the Florida Public Service Commission. They cover:
- Heat pump water heaters: $300–$500 rebate from FPL and Duke
- Smart thermostats: $50–$150
- Variable-speed pool pumps: $100–$200
- ENERGY STAR central AC units: $100–$300
These utility rebates are often overlooked because they don't get the same publicity as federal programs. Check your specific utility's website or call their energy efficiency line directly. Florida's relatively mild climate and high AC use means utility programs are particularly active there.
Use our Florida rebates page to see the current utility programs available by utility company.
Federal Weatherization Assistance Program (WAP)
The Weatherization Assistance Program is a separate federal program administered through HUD and the Department of Energy — it is not IRA-funded and was not affected by either the OBBB Act or state decisions to return IRA rebates. WAP provides free weatherization services (insulation, air sealing, furnace repair or replacement) to income-qualifying households at no charge.
Florida and South Dakota both participate in WAP and receive annual federal allocations. Income-eligible residents (generally 200% of the federal poverty level) in those states can still access free weatherization through their local Community Action Agency. See our full guide on income eligibility for energy programs for details on WAP qualification.
Property Tax Exemptions and Local Programs
Florida offers a property tax exemption for the added value of qualifying renewable energy installations (primarily solar) — meaning a solar installation won't increase your property tax assessment. This remains in effect regardless of the IRA situation. Several Florida counties and municipalities also run their own efficiency programs through PACE (Property Assessed Clean Energy) financing.
Are Other States at Risk of Returning Funds?
As of early 2026, the HOMES and HEAR programs have survived the legislative process largely intact — they were funded through mandatory spending (not annual appropriations), which made them harder to eliminate through the OBBB reconciliation process than the tax credits were. However, political pressure from conservative-led states has not disappeared.
States that have moved slowly to deploy their allocations face a different kind of risk: funds that aren't committed to specific projects or applicants by certain DOE deadlines can be clawed back administratively. States like Wyoming and West Virginia have been slower to stand up program infrastructure and may face pressure to accelerate or risk losing unspent portions of their allocations.
For residents in states with active programs, the practical advice is: don't wait. Check your eligibility now through the rebate calculator, understand what the HOMES program and HEAR program cover, and submit applications sooner rather than later if you're planning upgrades.
The Stacking Question
For states where HOMES and HEAR are active, these programs can still be stacked with utility rebates, WAP, and state-specific programs for significant combined benefit. Our guide on stacking rebates explains how to layer multiple incentives on a single project without violating program rules. In states like Massachusetts, New York, and California, it's possible to cover 60–80% of certain project costs through stacked incentives.
Florida and South Dakota residents don't have access to the top layer of that stack — but the utility and WAP layers remain. For lower-income households especially, WAP often delivers more total value than HEAR would have anyway, since WAP services are provided at zero cost to the homeowner versus HEAR's rebate-after-purchase model.