I.R.A. Rebates for Appliance Swaps Could Be Phased Out

The Energy Department has issued new guidance that could prevent people from receiving rebates for replacing gas appliances with electric ones.

The guidance, which took effect on Friday, would prevent states from offering rebates to people who buy an electric stove to replace a gas range. It would also end rebates for similar swaps of ovens, dryers, heat pumps and water heaters.

It was the latest move by the Trump administration to roll back a signature Biden-era climate policy. In an effort to reduce planet-warming emissions, the Biden administration had encouraged Americans to replace gas-powered cars, stoves and other technologies that burn fossil fuels with less-polluting electric models.

The new guidance would affect roughly $8.8 billion in federal funding that Congress approved for two different home rebate programs as part of the Inflation Reduction Act of 2022.

The first program provides potentially thousands of dollars in rebates to upgrade space heaters, water heaters, cooling and insulation, with greater incentives available to families making less than 80 percent of the median income in their area.

The second program, focused on electrification, provides rebates to families making less than 150 percent of the local median income. These can be worth up to $8,000 for an electric heat pump, $1,750 for a heat pump water heater and $840 for an induction stove.

States are responsible for distributing these rebates, and 12 states and the District of Columbia have already established programs. But when President Trump returned to office in January 2025, the Energy Department halted approvals of additional state programs as part of a broader freeze to review Biden-era policies.

That money is now flowing again, but the agency is making several key changes.

The biggest shift is that states can no longer use the funds for “fuel switching,” where people replace gas-burning furnaces or stoves with electric heat pumps or induction ranges. Households can, however, get rebates for upgrading existing electric appliances with more efficient models, for example by swapping an older resistance heater with a heat pump.

Many customers would also need to improve their homes’ insulation and air sealing before they upgrade any appliances under the program.

Ben Dietderich, a spokesman for the Energy Department, said in a statement that the changes were “common-sense revisions” that would “advance affordability, ensure good stewardship of taxpayer dollars, and empower grantees to tailor their programs to local contexts and residents’ needs.”

But Will Toor, the executive director of the Colorado Energy Office said in an interview that the new provision that prevents fuel switching could prevent low-income, rural households from heating their homes with cheap electricity instead of costly propane.

“It’s a slap in the face to rural Coloradans,” Mr. Toor said, “at a moment when energy affordability is one of the defining issues in this country.”

Kara Saul Rinaldi, the president and chief executive of AnnDyl Policy Group, an energy consultancy, said that the programs would still be beneficial overall, with the potential to cut home energy bills by as much as half in some cases.

“The main thing is that the funds are finally moving forward,” Ms. Rinaldi said.

Still, the states that have already moved forward with rebate programs would now have to pause while they reworked the requirements, she said. That could create new disruptions for homeowners and contractors.

Edward Yim, the director of clean energy at the legal nonprofit Lawyers for Good Government, said he thought the new guidance violated the Inflation Reduction Act. In establishing the rebates, the law explicitly said that a valid reason for receiving payment was “to replace a nonelectric appliance.”

“That’s a pretty straightforward, simple violation of the statutory text,” said Mr. Kim, who previously worked on this issue at the Energy Department before leaving the government last year.

Karen Harbert, the president and chief executive of the American Gas Association, a trade group, welcomed the changes. She said in a statement that modern, more efficient gas appliances could still help households reduce their greenhouse gas emissions and energy bills and that the new guidance would “protect choice in appliances.”

Mr. Trump has often railed against efficiency standards for household appliances. He has said that LED lightbulbs make him look orange, and he has claimed, falsely, that electric stoves do not work.

“We’re giving you gas ovens, gas stoves, if you’d like,” Mr. Trump said at a rally in April 2025. “No more electric. You can have electric, if you want. I have a lot of friends, they like gas better.”

In recent years, dozens of Democratic-led cities and states have pushed to phase out the use of natural gas for home heating and cooking, while Republican-led states have often sought to block these efforts.

The new guidance would also allow households to receive rebates even if they bought appliances that were not certified by Energy Star, the popular program whose iconic blue labels help consumers to choose energy-efficient dishwashers, refrigerators and other products.

The Environmental Protection Agency said last year that it would eliminate the Energy Star program. But after facing pushback from business leaders and congressional Republicans, the E.P.A. retreated from these plans and instead shifted responsibility for the program to the Energy Department.