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Energy Efficiency  |  Costs & Benefits  |  Programs & Incentives for Energy Efficiency

Programs & incentives for energy efficiency

Last updated 4/5/2023

Energy efficiency measures deliver positive environmental impacts, reduce your reliance on utility-generated electricity, and provide more jobs than the coal or upstream oil & gas sectors in the United States. To encourage energy efficiency, governments, utilities and other organizations offer energy efficiency and other financial incentives to make energy efficiency more accessible for today’s homes and businesses. 

Energy efficiency incentive programs for property owners

Utilities, local governments, and state agencies offer energy incentive programs that help make energy efficiency a more affordable option. Depending on your state or municipality, programs can take the form of rebates, tax incentives, or loans for qualified purchases.

While specifics vary from program to program, savings categories frequently include financial incentives for HVAC systems, water heaters, building insulation, appliances, weatherization, lighting, and other energy efficient improvements. Before you make an energy efficient purchase, visit the Department of Energy (DOE) website to search their database of energy efficiency tax credits, rebates and savings available at the local and state level.

You should also use the Database of State Incentives for Renewables & Efficiency (DSIRE), which provides detailed information on state incentives and policies for renewable energy and energy efficiency improvements. With DSIRE, you can further narrow your search with an extensive list of filters that allow you to differentiate between various renewable and energy efficiency technologies. Other useful filters that are not available on the DOE database include dates, categories, program type, and coverage area.


Local utilities often provide rebates for ENERGY STAR certified or energy efficient purchases, which cover a wide range of appliances, building products, electronics, heating and cooling equipment, lighting, fans, pool pumps, and water heaters. With rebates, you receive the returned portion of the purchase price after you pay the full amount, as opposed to a discount that reduces the price prior to the purchase.

The timing of when you will receive your rebate differs according to the product, as well as the program structure in your area. Some rebates are available immediately after purchases, whereas others are available only after installation has been completed. The total rebate amount also depends on the product, going as low as $10 for CFL lightbulbs or up to around $1,000 for larger equipment. You can find available rebates using the DOE database of energy efficiency tax credits, rebates and savings. Enter “rebate” as the keyword and search by state, eligibility, and product category. The DSIRE database will also have information on state- and utility-level incentives.

Tax incentives for energy efficiency

Federal tax credits for energy efficiency expired at the end of 2016, which means that tax incentives for energy efficiency are hard to find. Nevertheless, you can still receive federal tax credits if you have made energy efficiency improvements in prior years. For instance, improvements related to building envelope, heating, cooling, and water heating qualify if they were made in 2015 or 2016. For ENERGY STAR qualified windows, doors, and skylights, tax credits are available for installations between 2012 and 2016. To claim these residential energy credits, file Form 5695 with your taxes.

Federal tax credits cut the cost of going solar by 30 percent

The federal government provides a solar tax credit, known as the investment tax credit (ITC), that allow homeowners and businesses to deduct a portion of their solar installation costs from their taxes. Both homeowners and businesses qualify for a federal tax credit equal to 26 percent of the cost of their solar panel system, minus any cash rebates. Thanks in part to the ITC, the average solar installation pays itself off in just seven years.

The only environmentally-focused federal income tax credits that are still available are for solar energy systems and all-electric or plug-in hybrid vehicles. However, you can look for energy efficiency tax incentives that may exist at the state or local level. In many states, agencies offer financial incentives in the form of sales or property tax exemptions for purchasing or installing qualifying equipment.

You can search for available tax incentives using the DOE database of energy efficiency tax credits, rebates and savings. Enter “tax” as the keyword and search by state, eligibility, and product category. You can also use the DSIRE database to search for state level incentives.

Energy efficiency loans

Homeowners interested in investing in energy efficiency are usually discouraged by the high upfront costs of equipment and installation. To combat this problem, various agencies ranging from utilities, energy service companies, and local and state governments offer loans specifically for energy efficient installations

To acquire an energy efficiency loan, you must submit an application to the loan program you have in mind. Loan programs for residential energy efficiency can be limited to specific products, or they may mandate a minimum percentage for overall energy savings.  The criteria to qualify for an energy-related loan also vary according to the program. The most essential of requirement is often a healthy credit score. Loan programs may also require you to schedule or perform a home energy audit.

There is considerable variance in the total amount and the interest rate at which you can borrow, so be sure to thoroughly research your options before settling on a certain program. Contact your state energy office to find out whether subsidized energy efficiency loans are available in your area. A list of state energy offices is available below.

State Energy Office
Alabama Department of Economic and Community Affairs, Energy Division
Alaska Alaska Energy Authority
Arizona Arizona Office of Grants and Federal Resources
Arkansas Arkansas Energy Office
California California Energy Commission
Colorado Colorado Energy Office
Connecticut Connecticut Department of Energy and Environmental Protection
Delaware Division of Clean Energy and Climate
District of Columbia Department of Energy and Environment
Florida Office of Energy
Georgia Georgia Environmental Finance Authority, Energy Resources Division
Hawaii Hawaii State Energy Office
Idaho Idaho Office of Energy Resources
Illinois Illinois Energy and Recycling Office
Indiana Indiana Office of Energy Development
Iowa Iowa Energy Division
Kansas Kansas Energy Office
Kentucky Kentucky Department for Energy Development and Independence
Louisiana Department of Natural Resources, Technology Assessment Division
Maine Efficiency Maine
Maryland Maryland Energy Administration
Massachusetts Department of Energy Resources
Michigan Michigan Agency for Energy
Minnesota Minnesota Department of Commerce, Division of Energy Resources
Mississippi Mississippi Development Authority, Energy & Natural Resources Division
Missouri Missouri Department of Economic Development, Division of Energy
Montana Energy Bureau at Montana Department of Environmental Quality
Nebraska Nebraska State Energy Office
Nevada Nevada State Office of Energy
New Hampshire Office of Energy and Planning
New Jersey New Jersey Board of Public Utilities, Office of Clean Energy
New Mexico New Mexico Energy, Minerals and Natural Resources Department
New York New York State Energy Research and Development Authority
North Carolina North Carolina Department of Environmental Quality, Division of Energy, Mineral, and Land Resources - Energy Group
North Dakota North Dakota Department of Commerce, Office of Renewable Energy & Energy Efficiency
Ohio Ohio Development Services Agency, Office of Energy and Redevelopment
Oklahoma Oklahoma Office of the Secretary of Energy and Environment, State Energy Office
Oregon Oregon Department of Energy
Pennsylvania Pennsylvania Department of Environmental Protection, Office of Pollution Prevention and Energy Assistance
Rhode Island Rhode Island Office of Energy Resources
South Carolina Energy Office
South Dakota Bureau of Administration, Energy Management Office
Tennessee Tennessee Department of Environment & Conservation, Office of Energy Programs
Texas State Energy Conservation Office
Utah Utah Office of Energy Development
Vermont Vermont Energy Office
Virginia Virginia Department of Mines, Minerals and Energy
Washington Washington State Energy Office
West Virginia West Virginia Division of Energy
Wisconsin Wisconsin Office of Energy Innovation
Wyoming State Energy Office - Wyoming Business Council

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