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Md. poised for surge of consumer energy rebate funds

New federal funding is set to provide rebates for consumers who buy energy-efficient appliances. AP Photo/Damian Dovarganes)

State energy officials are bracing for a wave of applications for clean energy rebates expected as part of recently enacted federal programs.

Mary Beth Tung, director of the Maryland Energy Administration, said federal rebate programs could double the number of applications her agency handles annually.

“Our interest in these new federal programs, as you can imagine, is as strong as yours are,” Tung told members of the Senate Finance Committee Tuesday. “Rolling out these new programs is going to take quite a lot of effort on the part of everyone to make sure that it is done right.”

Included in those programs is the home residential rebate program and the high-efficiency electric home rebate program.

How much Maryland will receive is not fully known. The agency, using an existing federal formula, estimates the amount could be about $140 million. Tung added that the timeline for receiving the money is also unclear.

“We get tantalizing hints but we haven’t heard anything yet,” she said.

The money would be used as incentives to upgrade appliances. The goal is to move away from fossil fuel-based furnaces, stoves, dryers and water heaters. In their place, consumers would install new, efficient electric models.

“We acknowledge that the interest in these rebate programs is significant,” said Tung. “I’m sure your offices are getting lots of calls on them and so are we.”

“We have to urge patience as we get those calls and emails,” she said.

The federal Inflation Reduction Act is billed as a way to reduce the federal deficit to ease inflation. It  also provides money for domestic energy production — especially clean energy.  It also authorizes Medicare to negotiate prices for high-cost medications.

Ben Husch, federal affairs adviser on natural resources and infrastructure for the National Conference of State Legislatures, said total funding for clean energy and greenhouse gas reduction will total about $370 billion.

“To be clear, this is not $370 billion in direct federal spending,” said Husch.

Of that, about $270 billion will come in the form of tax incentives. The remainder will come as direct spending and federal energy loan programs.

The bill creates a $27 billion greenhouse gas reduction fund. The program is meant to finance clean energy technologies as part of an effort to reduce emissions by 2030.

Tung said the state is in a better position to handle the new federal rebates programs than others because of existing state programs it already administers.

Still, the number of annual applications is expected to be significant through 2031. The new programs will require the agency to perform income verification to ensure the money is going to low- and moderate-income families.

That verification process is something the agency has never done before and is layered on top of a flood of applications, Tung said, with estimates in the range of 50,000-66,000 through 2031.

“We could easily double our workload in a single year,” she said.

In the past fiscal year, the Maryland Energy Administration processed about 7,700 applications for various rebate and tax incentive programs, Tung said.

“I was about to say ‘only’ but that was a lot,” said Tung.