NM first in nation to launch electrification discount-style rebates

While state and federal governments for years have touted renewable energy tax credits, the green resources largely remained inaccessible for people who couldn’t afford the high upfront costs.

So New Mexico on Tuesday became the first state in the nation to enact coupon-style rebates for use when purchasing or installing electrification appliances under a new federal rebate program.

The Home Electrification and Appliance Rebates, or HEAR, program provides up to $14,000 in savings for state and tribal residents.

The rollout starting this week includes upfront discounts of up to $1,600 off of insulation, air sealing and ventilation for low-income, single-family homeowners.

Additional rebates on appliances like heat pumps, electrical panels and wiring, and electric stoves and ranges will come in the fall, when eligibility will expand to include low- and middle-income renters.

New Mexico is the third state in the nation to launch the HEAR program, but the strategy to offer discount-style rebates so purchasers don't have to wait for tax credits, as rebate programs usually work, is unprecedented.

State and federal officials gathered at the Albuquerque union hall for the International Brotherhood of Electrical Workers on Tuesday to announce the program’s launch.

Gov. Michelle Lujan Grisham said the state can’t ask people to use greener energy if they can’t afford those resources, and upfront rebates are a way to ensure “no one is ever left out.”

“If you don't have point of sale, far too many people are left out in that equation,” she said.

U.S. Sen. Martin Heinrich's Zero-Emission Homes Act was included in the federal Inflation Reduction Act the HEAR program is part of. He said it's great to see New Mexico lead.

“This is going to make not only the best solutions more accessible to the people who need them, but it's going to make their homes a lot more comfortable, and it's going to make their utility bills a lot more manageable,” Heinrich, D-N.M., said.

Lujan Grisham said electrification also supports addressing the issue of an antiquated power grid around the nation.

“If we don't reduce our consumption, then we're missing the largest part of an effective shift to cleaner energy,” she said.

David Turk, deputy secretary of the U.S. Department of Energy, said this is just the front end of a “clean energy revolution.”

“The record of what’s going on here in New Mexico is just truly, truly impressive,” Turk said.

The issue of high upfront costs for renewable energy and electrification remains an issue for many low- and middle-income communities, even with rebates. However, Turk said prices have already come down dramatically and a lot of people just need “a little extra help to have that installation on the front end.”

Turk toured the home of Albuquerque resident Glen Salas after the event. Salas had recently replaced his windows and has had solar panels for more than a decade. He hopes to upgrade his gas stove to induction when it's old enough to require replacement.

Salas said his solar installation alone cost around $13,000 before rebates.

"If you have the money, it makes so much sense. It paid for itself long ago," Salas said.

At the launch event, Heinrich said additional manufacturing will help bring down costs.

“It’s just like when cellphones first came out. They looked kind of ridiculous, and they were really, really expensive. And every year they got cheaper as we manufactured more,” he said. “When you manufacture more heat pumps, the heat pumps become cheaper.”

And, Lujan Grisham chimed in, industry becomes more competitive.

Heinrich said as people hear more about the savings from these programs, they’ll start partaking.

“We've seen that with solar, where if someone in your neighborhood has solar, the odds that four or five or 10 people will have solar in a year go way up,” he said. “And as people hear stories about, ‘I had a $300 utility bill; now it's $100,’ that is going to spread like wildfire, and it's a great hedge for inflation.”

The application for the HEAR rebate and information about other available rebates or discounts can be found online at cleanenergy.nm.gov.

Editor's note 9/4/24 10 a.m.: This article has been updated to correctly reflected Salas' home modifications.