State Energy Office says DOE program reviews leave home‑efficiency, electrification and solar plans in limbo
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Summary
Melissa Bailey, director of the State Energy Office, told lawmakers that DOE and EPA reviews have paused conditional awards and late‑stage approvals for Vermont’s home efficiency rebates, electrification grants and the Solar for All program — with the latter canceled by EPA and now subject to legal challenges.
Melissa Bailey, director of the State Energy Office at Vermont’s Department of Public Service, told the Senate Natural Resources & Energy committee that several federal programs created by the Inflation Reduction Act and related funding streams face uncertainty because of federal program reviews and agency reorganizations.
Bailey described two IRA‑created programs central to Vermont’s plans: the homes program (home efficiency rebates) and home electrification/appliance rebates (heat pumps, heat‑pump water heaters). Vermont expected about $29 million under the homes subprogram that the state planned to grant to the Office of Economic Opportunity for distribution, and a larger package for electrification and workforce development to help scale installations.
She said the homes program had continued DOE engagement and that Vermont is ‘‘cautiously optimistic’’ about eventual approval but that conditional awards and DOE software approvals remain outstanding. “We are hoping to get the green light in 2026 to launch homes,” Bailey said, noting pending DOE software approval expected by March for the modeling tool the state expects to use.
Bailey also described the national Solar for All program, which EPA announced it had canceled. Vermont had been awarded roughly $62.5 million over five years for a Solar for All design that would have served low‑income Vermonters. Bailey said Vermont is pursuing legal challenges and contract remedies: the state is participant in lawsuits and is pursuing federal claims for damages while also asking EPA to reopen the program administratively.
On conditional DOE awards, Bailey warned that programs described as ‘‘conditional’’ are effectively on hold until DOE resolves internal reviews ordered by the Office of Management and Budget. She said some states that launched programs earlier remain operating, but many states — including Vermont — face a pause while DOE conducts a cross‑program review.
The committee asked about how awards already distributed to individuals would be handled if federal funding were rescinded; Bailey said she did not expect homeowners to be made liable and that reimbursement or cancellation of awards would be the likeliest federal remedies, though she could not provide a definitive legal answer.
Next steps: the State Energy Office will continue to work with DOE on approvals, monitor the Solar for All litigation, and maintain readiness to launch state programs if federal approvals are restored.