Federal Government

Federal Policy

MEEA focuses most of its policy efforts on impacting state policies and programs, as many energy policy issues are left to the states. However, federal legislation and regulation also greatly impacts the energy efficiency industry.  

Regulation/Technical Assistance

U.S. Department of Energy

The U.S. Department of Energy (DOE) is the nation’s chief energy policy and research arm. DOE oversees energy conservation standards for a wide range of consumer and industrial products and promotes energy efficiency through various programs and funding streams. DOE sets minimum energy-efficiency standards for over 60 different types of appliances and products.  

In addition, several offices within DOE run programs, provide funding and offer technical assistance on efficiency.  

U.S. Environmental Protection Agency

The U.S. Environmental Protection Agency (EPA) is within the executive branch that administers federal clean air, clean water and pollution laws, as well as programs to reduce carbon pollution and improve environmental health. These include the Energy Star™ voluntary labeling program for products and buildings that meet performance standards set by the agency. 

Federal Energy Regulatory Commission

The chief regulating entity on federal energy policy is the Federal Energy Regulatory Commission (FERC), which oversees the nation’s energy markets and deals with issues that transcend state lines, like transmission and interstate sales of electricity, natural gas and oil. FERC decisions affect the energy efficiency industry at times, like its 2021 Order No. 2222 which impacts how distributed energy resources (including energy efficiency) can participate in regional markets. Like most state regulatory commissions, FERC is comprised of five commissioners who are appointed by the President and approved by the Senate.  

Legislation and Federal Funding for EE

Even before the passage of the Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA) in 2021 and 2022, respectively, the federal government was providing long-term support for programs and funding streams that support energy efficiency. This includes several types of financial support that flow directly to states and local governments. 

  • State Energy Program funding supports the work of State Energy Offices related to energy efficiency and renewable energy planning, implementation and market-development efforts in U.S. states and territories.
  • The Weatherization Assistance Program distributes grants to states to support energy audits and efficiency upgrades for low-income households.
  • Energy Efficiency and Conservation Block Grants fund local government projects to cut energy use and install renewable energy devices. Created in 2007, the program has been funded twice, first through the 2009 Recovery Act and again through the 2021 Infrastructure Investment and Jobs Act.

Infrastructure Investment and Jobs Act

The Infrastructure Investment and Jobs Act (IIJA), also known as the Bipartisan Infrastructure Law (BIL), included $550 billion in new spending over five years. The legislation was approved by the U.S. Senate by a vote of 69–30 and the U.S. House of Representatives by a vote of 228–206. It was signed into law by President Biden on November 15, 2021. The legislation was passed to spur economic development in America’s infrastructure as the country emerged from the COVID-19 pandemic. Amongst the energy provisions, IIJA has funded programs to bolster the electric grid, build transmission, expand clean hydrogen production and invest in the country’s nuclear energy facilities. Additionally, IIJA provided funding boosts for the State Energy Program, Weatherization Assistance Program and Energy Efficiency and Conservation Block Grants.  

Inflation Reduction Act

The Inflation Reduction Act (IRA) was approved by the U.S. Senate by a vote of 51-50 (with Vice President Harris casting the tie-breaking vote) and the U.S. House by a vote of 220-207. President Biden signed the bill into law on August 16, 2022, marking the biggest investment in climate and energy programs in the nation’s history. The legislation touches on a variety of subject areas, including health care and taxes, but a large portion of the language focuses on climate and energy initiatives. The Congressional Budget Office estimated that the cost of these climate/energy provisions at $370 billion. Other independent evaluations have predicted heavier use of energy tax incentives (many of which are uncapped) and therefore an even higher total impact, potentially exceeding $1 trillion. The IRA is projected to reduce carbon emissions 31-44% below 2005 levels by 2030. 

Notable IRA Programs

Two notable IRA programs are the Home Efficiency Rebates (HOMES) and Home Electrification and Appliance Rebates (HEAR). Collectively, these programs will funnel $8.5 billion to state energy offices to deploy rebates for whole-home retrofits, efficient appliances and building shell improvements. While their availability will vary by state, it is anticipated that HOMES and HEAR rebates will begin to roll out in mid-2024. Additionally, the IRA funded the Greenhouse Gas Reduction Fund ($27 billion), Climate Pollution Reduction Grants ($5 billion), Environmental and Climate Justice Block Grants ($3 billion) and Zero Building Energy Code Adoption program ($1 billion), among many other programs. 

Details of the HOMES and HEAR Programs

(figures in million $)

HOMES

HEEHR

Illinois

132.2

131.3

Indiana

91.3

90.8

Iowa

60.8

60.5

Kansas

53.0

52.7

Kentucky

67.3

66.9

Michigan

105.9

105.3

Minnesota

74.5

74.0

Missouri

75.8

75.4

Nebraska

45.8

45.5

North Dakota

37.3

37.1

Ohio

124.9

124.2

South Dakota

34.4

34.2

Wisconsin

74.9 

74.9

Sources

Home Energy Rebate Program | DOE

Home Energy Rebate Program | DOE