The Ad Hoc Gist: Inside DOE’s $8.5 billion push to retrofit homes

The Ad Hoc Gist: Inside DOE’s $8.5 billion push to retrofit homes

August 2023

Artwork by Mina Lee

On the first anniversary of the Inflation Reduction Act (IRA), the most significant piece of climate legislation in US history, we’re taking you inside the Department of Energy.

Karen Zelmar is the manager of the home energy rebate programs, which provide $8.5 billion for home efficiency and electrification projects. We talked to her about their newly released guidance and what it’s like to work at DOE during a pivotal time.

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Inside DOE's $8.5 billion push to retrofit homes

What made you want to join DOE at this moment?

Karen Zelmar: The passage of the IRA was historic for its intent to lower consumer costs and drive the clean energy economy forward. When the opportunity to run two of the IRA programs was presented to me, it seemed like a once in a lifetime opportunity to make a direct, meaningful contribution toward those goals.

What are you bringing to this role from your past experience at a major utility and in the climate tech space?

KZ: On the utility side, it’s knowing how to run initiatives – I led energy efficiency efforts at PG&E, along with several other demand-side management programs. I’m also finding a similar culture between PG&E and the DOE in the mission-driven focus of the work, the passion from the team, the need to bring a lot of people together toward a very complex goal.

My time at Volta was invaluable because I was on the recipient side. I gained perspective on the impact to a small company when an incentive program asks for a lot of requirements, which often drives changes to the product roadmap and forces difficult decisions about whether you can participate. Plus, startups are nimble, make really quick decisions, and take risks. I'm glad I got that reminder before jumping over to the federal government and I'm hopeful I can carry some of that spirit with me.

Given that, along with the administration’s goals for your programs, what are your immediate priorities?

KZ: Helping states access the funds as quickly as possible and launch their programs so that actual consumers can feel the impact. We know some states are going to be ready to move faster than others, with related work already happening, and we do a lot to encourage what we call “braiding” between programs. But other states won't have that, and we want to make sure everybody can bring really robust programs into the marketplace. I’d say that’s our number one priority right now.

The long-awaited guidance for your programs just came out in late July. What do you want people to know?

KZ: The overarching goal is to accelerate the transition to more affordable, efficient, resilient, and low-carbon homes. We know there's experience out in the marketplace running these programs, and a lot of experience in particular among utilities. So we want to encourage conversation in the private market for the states to leverage that expertise and complement existing programs from utilities and other agencies that might already be up and running.

What feedback are you getting from climate tech startups relative to some of the bigger, more established players? How would you like them to engage your office?

KZ: The funny thing is, up until this point, we’ve been hearing the exact same thing from the smallest player to the biggest: What are the guidelines? It's actually been helpful for me to hear that because it gave me an appreciation for the impact and the consequence of what we're doing and how a startup has a particular technology that could fit into one part of the program.

Overall, we want to make sure we’re hearing from everyone, not just a certain portion of people who are connected. We’ll have a form on our webpage where anybody can submit questions or comments and we’re also planning a broader outreach strategy.

Some Republicans and conservative groups have made it clear they want to repeal IRA funding. How does that impact your work?

KZ: We think what we’re building is critical for homeowners across the US. Virtually all of our work is about lowering energy bills for families. That’s the bottom line. And then you add in health, comfort, and other benefits. So we hope the governors and state officials will see the value in these outcomes for their constituents, and their state energy offices will participate.

Let’s fast-forward to December 31, 2024. What does success look like for you at that point?

KZ: December 31, 2024 is not that far away! There’s nothing we’ll be declaring victory on at that point, but I very much hope to see many, if not most, of the programs running and households experiencing the results and the lower energy bills. We estimate 50,000 jobs will be created because of these programs, so we’re certainly going to be tracking to make sure that transformation is happening.

Looking beyond your program, what technologies are you excited about? What’s happening on a smaller scale that you’d like to see grow in the coming years?

KZ: I’m really excited about all of these technologies funded by the IRA that will be focused on grid modernization. I'm very hopeful that as states think about rolling out these home efficiency programs, it's first and foremost about comfort and lowering energy bills, but it’s also starting to build out a more connected set of devices that could benefit something larger. The biggest thing is the idea that you leverage and aggregate the devices to make the grid more resilient and avoid having to build the next fossil fuel power plant.

The Ad Hoc Group is grateful to Karen Zelmar for her time and insights. This interview has been edited and condensed for clarity.

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