The federal fiscal year starts each year on October 1, and five months into FY26 we have a mostly finalized budget. On February 3, Congress passed a consolidated appropriations bill covering 11 out of the 12 necessary annual appropriations bills. The debate about funding for Immigration and Customs Enforcement in the Department of Homeland Security bill is ongoing. In May 2025, as the FY26 process was in the early stages, we wrote a blog about threats to three federal programs that impact energy efficiency. To find out how energy efficiency programming fared in this year’s budget, read on.
The consolidated appropriations bill funds the Office of Energy Efficiency and Renewable Energy (EERE), which has been renamed to the Office of Critical Minerals and Energy Innovation, at $3.1 billion, down from $3.4 billion in FY25. The former EERE oversees the National Laboratories and other energy efficiency related programs. This $300 million funding cut, while disappointing and likely detrimental to efficiency, is not as bad as feared earlier in the process.
ENERGY STAR®
ENERGY STAR is run out of the Environmental Protect Agency (EPA) in partnership with the Department of Energy (DOE). You may recall that the President was seeking to cancel the ENERGY STAR ® program entirely in spring 2025. After significant lobbying efforts, including over 1,000 businesses signing on to a letter urging EPA Administrator Lee Zeldin to maintain the ENERGY STAR program, the program was funded.
The consolidated appropriations bill allocated just over $33 million for ENERGY STAR, a small increase over the prior year’s funding. The funding is a significant victory for energy efficiency given that the budget process began with the President requesting to zero out the ENERGY STAR budget entirely. Despite receiving full funding, the program is now greatly understaffed because of the administration’s reorganization and layoffs at EPA.
Low-Income Home Energy Assistance Program
The Low-Income Home Energy Assistance Program (LIHEAP), which provides bill assistance to low-income households to avoid utility shutoffs, was also on the chopping block in the President’s original FY26 budget request. Despite attempts to defund the program, LIHEAP received just over $4 billion in funding, a small increase over the prior year.
Weatherization Assistance Program
The Weatherization Assistance Program (WAP), which was not addressed in our previous blog post about federal programs, provides weatherization upgrades to low-income households for increased efficiency and more affordable energy bills. The program, funded through DOE, serves approximately 32,000 households annually. WAP received $329 million in the FY26 budget, a $3 million increase over the prior year. Additionally, there is currently a bill before the House, HR 1355, that would extend the authorization of appropriations for the program through 2030. Named the Weatherization Enhancement and Readiness Act of 2025, this bill would also increase the maximum average cost per dwelling unit from $6,500 to $12,000 and would create a $50 million Weatherization Readiness Program.
Appliance and Building Standards
For nearly 40 years, DOE has set mandatory efficiency standards for over 70 products These standards reduced utility bills for consumers by $105 billion in 2024 alone. According to DOE, appliance standards adopted through January 2025 are expected to save over 160 quadrillion Btus of energy through 2035, which is more energy than the entire U.S. consumes in one year. Despite these savings, Congress and the current administration continue their efforts to roll back these successful regulations.
On February 25, the House passed HR 4626, the Don’t Mess with My Home Appliances Act. The bill would allow the Secretary of Energy to amend or revoke appliance standards - a considerable threat to the energy savings these standards have long provided. The legislation would establish minimum thresholds of energy savings required for a standard, effectively making it easier for the Department of Energy to roll back standards. The bill will now go to the Senate.
In January, the House passed HR 5184, the Affordable HOMES Act, which prohibits the Secretary of Energy from enforcing energy efficiency standards for manufactured housing. The bill is now in the Senate Committee on Energy and Natural Resources. If it becomes law, it will ultimately lead to bill increases for residents as new manufactured homes become less efficient.
Two other bills attempting to weaken appliance standards have moved out of the House Energy and Commerce Committee recently, and will be heading to the full House for votes:
- HR 3699, the Energy Choice Act, would ban state and local governments from prohibiting or limiting an energy source, including natural gas and delivered fuels.
- HR 4690, the Reliable Federal infrastructure Act, would repeal federal building efficiency standards and performance standards.
What's Next?
While the budget is wrapped up for this year, many of these highlighted bills remain pending. That also includes the Homeowner Energy Freedom Act, which passed the House 208 to 187 on February 24. The bill would repeal three sections from the Inflation Reduction Act: Section 50122 (the high-efficiency electric home rebate program), Section 50123 (state-based home energy efficiency contractor training grants), and Section 50131 (funding for the latest and zero emission building energy code adoption). While energy efficiency didn’t take a terrible hit in the budget, HR 4758 would eliminate funding for several programs being implemented at our region’s state energy offices. As the bill heads to the Senate, MEEA will continue to monitor it, as well as those impacting weatherization and appliance standards.
The President's budget request, which kicks off the annual appropriations process, is typically expected on the first Monday in February. In years like this one where the appropriations process drags into February, the budget request for the upcoming year is delayed. We expect a budget request at some point in the spring to kick off a new round of debate over funding priorities for FY27. The time for stakeholders to engage in this process and make their priorities known to legislators is now and in the coming months - not next fall after appropriations bills have been introduced. MEEA members can continue receiving federal and state policy updates in our monthly Policy Insider.