Inflation Reduction Act

​Through the Penn Energy Savers Program, DEP's Energy Programs Office will be administering two IRA-funded rebate programs for low to moderate income households: the Home Efficiency Rebates (HER) Program, which will incentivize whole-home energy retrofits for PA residents, and the Home Electrification & Appliance Rebate (HEAR) Program, that will consist of point-of-sale consumer rebates on the purchase of high-efficiency electric home appliances. EPO anticipates that the HEAR rebates will be available to PA residents in fall 2025, while the HER rebates will launch in winter 2025. The rebate amounts and income eligibility limits are determined by the IRA legislation.

If you are a resident and have questions on Home Energy Rebates and/or would like to receive updates on Pennsylvania’s Home Energy Rebate programs, please send an e-mail to RA-EPHomeEngRebates@pa.gov.

​(All tax credits mentioned below are effective for the 2023 calendar year)

These programs will be managed through IRS tax credits. Please check with your tax advisor and the Department of Treasury’s IRA Taxpayer Resource Hub for further details:

• New Energy Efficient Home Credit:
  • Tax credit for homebuilders
  • $2,500 for new homes meeting Energy Star standards; $5,000 for certified zero-energy ready homes. For multifamily, base amounts are $500 per unit for Energy Star and $1000 per unit for zero-energy ready

• Residential Clean Energy Credit (including Solar):
  • Provides a 30% tax credit for the purchase of residential clean energy equipment, including rooftop solar, wind, geothermal, and battery storage with capacity of at least 3 kWh

• Energy Efficient Home Improvement Credit:
  • Provides a tax credit for energy-efficiency improvements of residential homes
  • Base Credit Amount: 30% of cost, with limits for each type of improvement and total per year. Credit capped at $600 for “energy property,” e.g. efficient heating and cooling equipment; $600 for windows; $250 per door, $500 total for doors; $2,000 for heat pumps. Total annual credit capped at $1,200, with a separate annual $2,000 limit for heat pumps. $150 credit for home energy audits

• Clean Vehicle Credit (Electric Vehicles):
  • Provides a maximum $7500 tax credit for consumers purchasing new qualifying clean vehicles, including battery electric, plug-in hybrid, or fuel cell electric vehicles.
  • Vehicle must meet certain standards for North American assembly; the battery’s components must meet certain standards for manufacturing or assembly; and the battery’s critical minerals must meet certain requirements for sourcing or processing in the United States or from trusted trade partners

• Previously-Owned Clean Vehicles Credit:
  • Provides a maximum $4000 tax credit to support used vehicle buyers who choose to go electric

• A full list of tax incentives from the Inflation Reduction Act can be found here (Excel)

Phase I: Planning Grants

PA DEP has received $3 million in Federal grants to fund the creation of a Priority Climate Action Plan (PCAP) by March 1, 2024, and a Comprehensive Climate Action Plan (CCAP) by December 1, 2025.  The program requires developing two plans, a Priority Climate Action Plan and a Comprehensive Climate Action Plan.  

The PCAP includes ways to reduce GHG emissions that could be put into effect quickly. The PCAP also includes GHG reductions that are a priority for Pennsylvania communities and businesses, focusing on strategies for the industrial sector.  The PCAP is available here.

The CCAP will build on the PCAP to include a broad list of GHG reduction strategies that could be used in Pennsylvania and include analyses that will help assess the benefits and impacts of these strategies.

Analyses will be conducted in the following areas:

• A benefits analysis for reductions of GHGs and co-pollutants (e.g., carbon monoxide, ground-level ozone and precursors, diesel and other particulate matter, nitrogen dioxide, and sulfur dioxide)
• A benefits analysis for Low-Income and Disadvantaged Communities
• Quantified GHG reductions
• A workforce planning analysis

DEP recently concluded a series of in-person and virtual workshops as part of the CPRG initiative. These efforts began in Fall 2023 and aimed to gather community input to inform the development of Pennsylvania’s CCAP, which outlines strategies to reduce greenhouse gas emissions and address climate-related challenges across the Commonwealth.  In March 2025 DEP held In-person workshops engaged over 130 residents in eight locations across Eastern and Western Pennsylvania, including Wysox, Lancaster, Hazleton, Chester, Erie, Clarion, Johnstown, and Uniontown.  

In addition to the in-person engagement, DEP hosted a series of general public and sector-specific virtual workshops focused on labor, transportation, local government, utilities, and industry. These online sessions attracted approximately 370 participants, bringing total public engagement across the initiative to over 500 individuals. This robust outreach ensures that the voices of residents, industry stakeholders, and local officials—including those in rural and underserved communities—are incorporated into Pennsylvania’s CCAP. The feedback gathered from these events will inform future climate planning.  As the CPRG planning phase continues through 2027, DEP remains committed to inclusive and transparent engagement. 

Please email RA-EP-CPRG@pa.gov with questions about the program.
 

Phase II: Implementation Grants

In September 2020, U.S. EPA announced the second phase of the Climate Pollution Reduction Grant (CPRG) program, which includes two competitions totaling $4.6 billion: (1) a general competition for applications from states, municipalities, tribes, tribal consortia, and territories; and (2) a competition only for tribes, tribal consortia, and territories.

These implementation grants were open to entities that received planning grants to develop Priority Climate Action Plans (PCAPs) under phase 1 of the CPRG program, as well as entities that did not directly receive a planning grant that are applying for funds to implement measures included in an applicable PCAP.

Pennsylvania was awarded $396 million in CPRG Implementation funding to administer an industrial decarbonization grant program, Reducing Industrial sector Emissions in Pennsylvania (RISE PA).

Questions about RISE PA can be emailed to ra-ep-cprg@pa.gov.

U.S. EPA’s press release can be found here, and more information is available here.