How Contractors and Electricians are Tackling Emissions in US Homes

A conversation with Sealed’s Nate Kinsey, who’s working to help upgrade homes to be comfortable and climate friendly

Contractors and electricians are poised to become some of the most impactful climate and clean energy heroes in coming years. With $25 billion from the Inflation Reduction Act (IRA) dedicated to home clean energy and energy efficiency upgrades, the United States will need to supercharge the installation of technologies such as heat pumps and induction stoves — not only to meet expected increase in demand spurred by IRA funding, but also to reach our climate goals.

To understand what IRA means for this type of home upgrade work, RMI sat down with Nate Kinsey, senior policy manager at Sealed. Sealed is a climate tech company that designs, manages, and finances home weatherization and electrification projects, helping make it easy and affordable for people to be more comfortable while using less energy. Sealed currently offers its services in five US states with plans for expansion in the years ahead.

Photo of and courtesy of Nate Kinsey

RMI: The passage of the climate bill is exciting — and potentially transformative — for many reasons. What does this legislation mean for Sealed’s work?

Nate: Sealed has been on about a decade-long journey trying to crack the nut of energy efficiency and electrification in the single-family residential sector. All of us in this space have been waiting for this moment and it’s worth celebrating.

There’s so much in the legislation that is going to unlock energy efficiency and electrification across the country in a more equitable fashion. Where we already have leading states, like New York, Massachusetts, and California really pushing, IRA brings high efficiency and electrification to the rest of the states, and that’s very exciting.

RMI: We’re hearing a lot about workforce concerns when it comes to building upgrades — namely that there aren’t enough contractors or electricians to install these technologies at the pace that’s needed. What workforce solutions are Sealed and the broader community working on?

Nate: First, the bill itself includes $200 million for contractor and workforce development. But I think at Sealed, we really take the opinion that in addition to training and apprenticeships being great, there are other things we need to do to accelerate the development of a national workforce.

And the main thing is market sustainability. In the past, the residential energy sector went through what we call “sugar highs and sugar crashes” in the market. When incentives come in, they generate too much demand, but when budgets go away, the demand disappears. That’s really hard for a contractor and a business to plan around. So, in the near future, when the Department of Energy disperses the program funding for incentives to states, they must do so in a sustainable fashion to help grow the workforce and contractor business and gear them toward this work long term.

RMI: So how do we get through to more traditional contractors — the ones not as mission-based as Sealed — in understanding and sharing the gospel of cost savings from these technologies with their customers?

Nate: Again, it’s all about the marketplace. We need to align the incentives with the business that you’re trying to influence. Sealed partners with traditional HVAC contractors and electricians — getting them excited about electrification by bringing them work, which helps them grow their business and workforce.

The bill also helps align market incentives by providing contractors with up to $200 or $500 per project, depending on the program, for the pollution-reduction and energy-saving retrofits they deliver to low- and moderate-income households or those in disadvantaged communities. Over time, we’d really like to see a federal restructuring of our appliance performance standards that encourages heat pumps over all other technologies, since it’s the most efficient version of heating and cooling on the marketplace.

RMI: Can you talk a little more about why the Inflation Reduction Act incentives make it even more accessible for homeowners to do upgrades in the next few years?

Nate: Nationally the bill provides a historic amount of near and long-term financial incentives that make it more affordable for Americans to live in a comfortable, healthy, and clean for the planet home.

At Sealed, we have been thinking about this funding in three distinct phases. Phase one is between now and the next two years. During this phase, tax credits will be the major driver of adoption as the federal government and states set up incentive programs. Phase two is years two through five (maybe six), when incentive programs and the funding behind them reach the market. Phase three is years six through ten, when program funds start to run out and tax credits become the main driver of adoption again.

These phases will be different from state to state and the program’s impact on the market will be different, but overall, each phase will help a different type of American household unlock energy efficiency and electrification.

RMI: How can we do a better job of making people aware of the importance of things like clean energy home upgrades?

Nate: The reality is: we still have a huge consumer awareness gap around these technologies. Most homeowners don’t understand what a heat pump is, don’t understand that it’s the most efficient technology for heating and cooling, and don’t understand that it does both heating and cooling. So, educating consumers through public awareness campaigns, like the Switch is On Campaign in California, and working with contractors who can educate consumers on the benefits of heat pump technologies is critical.

RMI: How can the private sector play a role in ensuring these tax credits and rebates reach homes where people struggle to pay their energy bills?

Nate: There’s a lot of structural things that are built into the bill that will encourage the equitable allocation of these funds. There are specific incentives that are higher for low- and middle-income households.

I also anticipate that all the funding will follow the federal government’s Justice 40 guidance — where 40 percent of these funds will be specifically allocated to impacted, low-income communities. And some states will go above and beyond those targets as they rightfully should.

RMI: From a contracting perspective, if you had to sell me one thing from the Inflation Reduction Act that you think will be the most impactful to my everyday life at home, what would it be and why?

Nate: For me, it’s the incentives tied to measured energy savings in the HOMES rebate program. It pays out incentives to homeowners, contractors, and energy efficiency and electrification service providers, like Sealed, based on a home retrofits’ actual energy savings or pollution reductions. Those incentives and cost savings scale as the energy savings go up.

The program is a win for American households because it motivates contractors to deliver high-quality installations and it’s a win for the contractor because it can provide an additional stream of revenue. Again, the programs and policies in the Inflation Reduction Act are truly transformative for the sector.