Home energy rebate programs are often created with the best intentions: save households money on their energy bills, increase grid reliability, and accelerate the adoption of high-performance technologies. But when it comes to engaging the contractors responsible for delivering the rebates for these programs, the fine print can make or break the entire effort. Contractors are the linchpin of the home energy upgrade process. They’re the ones talking to their customers, designing solutions, performing the work, and ensuring quality installations. Their involvement directly shapes customer decisions and project outcomes.
But let’s be real: most contractors do not participate in home energy rebate programs. They’ve built successful businesses without relying on rebates and often steer clear of programs that involve excessive paperwork, rigid processes, or unpredictable rule changes. In many cases, these program design issues don’t just create headaches for contractors, they also make the program a less appealing option for the participants. Wanting to deliver a smooth experience for their customers, contractors may guide them away from rebate participation altogether, which means the upgrades the program is trying to incentivize never happen. This hesitation isn’t just about convenience — it’s about risk. If a contractor installs a project only to find out later that it doesn’t meet evolving or unclear program rules, they may eat the cost or lose trust with their customer. That’s a deal-breaker.
To truly scale home energy retrofits, we need to design programs that work for all types of contractors, including those who haven’t historically participated, by making rebates an easy, obvious win for both the contractor and the household. So what’s driving contractor program hesitation? It often comes down to the small stuff.
When Systems Fail, So Do Many Rebates
Most households only replace their heating and cooling systems when they break. In fact, a survey by ACHR News found that 71% of households wait until their equipment is no longer operational before even considering replacement, and other estimates range as high as 90%. Similarly, in California, 75% of water heater replacements in single-family homes are replaced as a result of equipment failure. These emergency situations leave little room for long-term planning, and in the rush to restore comfort, most households end up installing a similar — and usually low-efficiency — system as they had before. The opportunity to upgrade to high-performance, energy-efficient equipment slips away.
Rebates can be used to incentivize both contractors and households to choose higher-efficiency equipment in these moments of urgent replacement, but only if the program design allows it. Yet many home energy rebate programs aren’t built to work in emergency scenarios. They typically require pre-approval before installation, a process that can take days, weeks, or even months. But no one wants to be stuck in a freezing house or sweating through a heatwave waiting for paperwork to clear.
This challenge is especially acute for low-income households, who are more likely to wait until equipment failure and lack the financial means for temporary solutions like space heating or cooling, hotel stays, or travel, making extended pre-approval timelines particularly unworkable.
Contractors know this, and they’re focused on solving their customers’ problems quickly and smoothly, so they often guide their customers away from the rebate altogether. And that means the action the program is trying to incentivize — installing efficient equipment — doesn’t happen. Home energy rebate programs need to meet households and contractors where they are to actually drive uptake of high-efficiency equipment. That means building in flexibility for real-world situations. A rigid reservation-first model is out of sync with the fast-moving, high-pressure nature of emergency replacements. And if rebate programs are aiming to drive market transformation, as many are, they won’t get there without addressing the vast majority of the market that only replaces equipment when it fails.
So how do you fix this? A practical solution, for example, is to allow rebate reservations for systems that have already been installed, as long as it’s within a reasonable window, such as 14 days. It’s a simple fix that could make the difference between a like-for-like swap and a high-efficiency upgrade, aligning urgent household needs with long-term energy goals.
Too Many Equipment Rules, Not Enough Flexibility
Strict equipment requirements may sound like a smart way to ensure home energy rebate programs are promoting the most efficient technologies, but in practice, they often create more problems than they solve. These rules rarely reflect how contractors actually source equipment or the real-world complexity of projects. For example, there are countless indoor and outdoor unit combinations for heat pump projects, and most OEMs don’t go through the costly process of certifying every possible configuration. As a result, even if a system meets performance specifications such as ENERGY STAR, it often isn’t formally certified. In fact, only about 40% of systems that meet ENERGY STAR performance specifications are actually certified.*
For example, a California contractor in Sealed’s network working with a well-known manufacturer found that the only ENERGY STAR certified heat pumps in their product lineup were “cold climate”, and when the contractor called to order them, the manufacturer wouldn’t deliver those units to his area because it wasn’t considered a cold enough region.
This puts contractors in a bind: install the equipment that’s readily available and makes the most sense for the home, or try to track down a certified configuration that may be harder to get, more expensive, or less appropriate for the job. This kind of rigidity doesn’t just frustrate contractors, it blocks households from getting the efficient equipment these programs are supposed to promote. In some cases, contractors may even walk away from the rebate opportunity altogether because they can’t be sure the system they’re ordering meets strict specifications.
The fix is simple: programs should allow equipment that meets key specifications (ENERGY STAR, NEEP, etc.) rather than requiring formal certification. This small change would expand options, reduce unnecessary friction, and ensure programs can keep delivering value.
When Certification Get in the Way of Participation
Many home energy rebate programs inadvertently create barriers to contractor participation by requiring certifications that are not standard for their trade. For example, programs that include both insulation and HVAC measures sometimes mandate certifications like the Building Performance Institute’s Building Analyst Professional (BPI BA-P), which is typically geared toward whole-home energy auditors rather than specialists. This means that even contractors who are fully licensed and qualified under state and local requirements may be excluded unless they obtain additional certifications that aren’t directly relevant to their trade.
These certifications can cost thousands of dollars to complete, creating a steep financial barrier, especially for small or mid-sized businesses that often lack the time, staff capacity, or cash flow to pursue them just to access a rebate program. Even when the certification fee isn’t the main hurdle, the real cost is pulling contractors away from their day-to-day work to complete a training that doesn’t directly contribute to their core trade. That lost time and revenue can be especially hard to absorb for smaller companies already operating on thin margins.
The result? Fewer contractors participate in home energy rebate programs. And when contractors don’t participate, households may never hear about the rebates or may be unable to work with their preferred contractor to take advantage of them.
Program administrators can fix this by minimizing non-standard certification requirements. Requiring standard licensure at the state and local level ensures contractors are qualified without adding unnecessary friction. If additional certifications are required, programs should allow aggregators to meet those requirements on behalf of participating contractors, since they are responsible for project performance anyway. Programs should also consider accepting any U.S. Department of Energy–recognized Energy Skilled certification, which offers relevant, trade-specific options aligned with contractors’ actual work as well as providing rebates based on measured savings to ensure project quality and consumer protection.
Restrictive Income Verification Processes Undermine Program Access
Another often overlooked barrier in rebate program design is tying income eligibility verification to contractors. In many programs, contractors are responsible for helping customers complete income documentation before a project can move forward. This adds friction on both sides: households face delays and are often limited in their contractor choice, while contractors are burdened with administrative tasks that distract from delivering high-quality upgrades. This problem becomes even more acute in emergency repair situations. A household shouldn’t be stuck waiting for income paperwork to clear before they can restore heat or cooling.
Yet some programs make it even harder: households who have already completed income qualification are not allowed to switch contractors or are required to request permission from the program administrator, whom they may never have interacted with, to request permission to switch. That’s a major pain point. There are countless legitimate reasons why a household might want to work with someone else, such as cost, availability, trust, or responsiveness. For income-qualified households, it’s simply not fair that they face more restrictions, especially when households in other income brackets can switch contractors freely. It’s an unnecessary bottleneck that puts the customer experience and ultimately project completion at risk.
A far better approach is to put income verification in the hands of households. Under Wisconsin’s Home Energy Rebate Programs, for instance, customers can complete income verification independently and receive a reusable document that can be shared with multiple contractors. This simple shift has outsized benefits: it gives households more freedom and flexibility in choosing who they work with, it relieves contractors from managing private financial documents and waiting on approvals, and it makes programs run more smoothly overall. By making income verification household-led, programs remove a major source of friction, opening the door to broader participation, faster project timelines, and a better experience for everyone involved.
Four Fixes That Make Rebates Work
These program design decisions might sound like minor speed bumps, but collectively, they send a message: this program wasn’t built for how contractors operate or for the real-world needs of the households trying to get projects done. Creating predictable, easy-to-navigate programs builds trust with contractors — trust that’s essential if we want them to promote and participate in these offerings at scale. The reality is, most of the friction that keeps contractors and households out of rebate programs comes down to a handful of fixable design choices.
The four big ones:
- Allow projects that have already been installed to apply for a rebate reservation within a reasonable time frame, especially for emergency replacements where waiting for pre-approval isn’t realistic, by enabling contractors or aggregators to take on the risk of project eligibility.
- Accept equipment that meets ENERGY STAR (or other standard) specifications instead of requiring formal certification so contractors can install what’s available and right for the home.
- Remove non-standard certification barriers by focusing on existing trade-specific state and local licenses and qualifications.
- Make income verification household-led so income-qualified customers have the same flexibility and choice as everyone else when selecting a contractor.
None of these changes require rethinking the mission. They just require designing programs that work for the people actually doing the work. Fix the friction, and the impact will follow.
* Source: AHRI unitary package covering ~2M systems and ENERGY STAR website. Data available upon request.