Financial Incentives for Energy-Efficient Upgrades

Despite hefty upfront costs, most homeowners know that high-performance upgrades will eventually pay for themselves over time. Weatherization improvements such as energy-efficient windows, envelope sealing, and energy-recovery ventilation (ERV) systems can cut energy costs by up to 30% and often require less maintenance as well. Not to mention, they’re efficient and make for a cleaner and fresher indoor air environment.

What’s less obvious are the ways in which the burden of the upfront costs can be eased through local tax incentives, rebates, and other programs. Though the recent passage of the ‘One Big Beautiful Bill’ ended all federal energy-efficiency upgrade incentives in 2025, here in Washington (and Bellingham specifically) there are still resources for homeowners to recoup some of the costs of these upgrades. Navigating the bureaucratic language and fine print can be mind-numbing, so we’ve done our homework to help you understand how these programs work and what’s in it for you. Putting a number on the actual savings depends heavily on your individual circumstances but read on, and you just might find something here that works for you. So, here are eight ways that local, state, nonprofit, and private entities can help.

Where to Start

If you own a home built before 1990 and know it could use some upgrades but don’t know where to begin, start with a discounted full-home energy audit through the Community Energy Challenge (CEC). This partnership between Sustainable Connections and the Opportunity Council helps homeowners identify energy deficiencies, and then a Home Energy Advisor will provide a comprehensive report with recommendations on how to make the home more efficient. The audit includes, but is not limited to, a blower door test to pinpoint drafts, thermal imaging to find areas of heat loss, and a thorough inspection of the windows, insulation, exterior, and mechanical and ventilation systems. The advisor will then help you come up with a solution that fits your home and budget.

Additionally, a CEC audit is required in order to qualify for certain rebates, such as the City of Bellingham Water Use Efficiency Rebate Program (more on that later).

Financing Energy Efficiency Upgrades

Once you’ve identified the projects you want to tackle, the next step is figuring out how to pay for it. If your upgrades meet certain energy efficiency standards, you may qualify for a low-interest loan through the Puget Sound Cooperative Credit Union (PSCCU).

PSCCU’s Energy-Smart Loans help finance energy-efficient windows, insulation improvements, heating and cooling equipment, solar panel installation, and other upgrades. These include Energy Star-rated heat pumps, furnaces, boilers, and water heaters as well. The terms of these loans depend on your financial circumstances but can be a great way to get your project off the ground, even without a down payment.

Local Rebates on New Appliances and Efficiency Upgrades

Whether you’re simply replacing old appliances and plumbing fixtures or updating everything as part of a remodel, the City of Bellingham and Whatcom County both offer rebates for purchasing water upgrades.

As part of Bellingham’s Water Use Efficiency Plan, the City has introduced measures to encourage residents to reduce demand on the water supply. One of those measures is the Water Conservation Program, which offers rebates on water-efficient fixtures and appliances. Remember the Community Energy Challenge? That’s the first step, which is required in order to qualify for any rebates and will also help you find eligible appliances. However, as opposed to the full-home energy audit, the water assessment is free. These rebates include up to $100 each for high-efficiency toilets and washing machines and $75 on WaterSense labeled irrigation controllers.

Live outside of Bellingham, but still in Whatcom county? You can still save on the same appliances as the City’s program, in addition to a $100 rebate on dishwashers, through the Whatcom Water Alliance.

For homeowners in all of Western Washington, Puget Sound Energy (PSE) offers a rebate program that helps their customers reduce utility costs by providing financial incentives for energy-saving upgrades in existing homes. What’s more is that these rebates can be stacked with other local rebates.

Eligible PSE customers may receive kickbacks for improvements such as smart thermostats, insulation upgrades, energy-efficient windows, and qualifying heating, cooling, water heating, and appliance upgrades. Equipment must meet specific efficiency standards in order to qualify, so we recommend reaching out to a PSE Energy Advisor for more details.

For low- and moderate-income households, Washington State rolled out a pilot program in 2024 to help homeowners switch to high-efficiency electric equipment through the Home Electrification and Appliance Rebates (HEAR) program. While that phase of the program has now closed, a new round of funding will be released in 2026 to third-party administrators (such as nonprofits, utility companies, and local governments) that will make those funds available to qualified applicants later this year. Funding could be used for rebates on upgrades like heat pumps for heating and cooling, heat pump water heaters, induction stoves, heat pump dryers, and even electrical panel upgrades when they’re needed to support new equipment. The dust hasn’t settled on the details yet, but this is worth keeping an eye on if you’re planning any upgrades in late 2026 or beyond.

If natural gas is your home’s primary source of heating and/or water-heating, Cascade Natural Gas offers its customers rebates for new equipment, as well as insulation improvements and envelope sealing. These incentives are best for customers staying on gas, and generally don’t apply to electrification upgrades like heat pumps.

City of Bellingham Historic Preservation Incentives

The City of Bellingham is home to eight National Historic Districts. If you own an older home in one of these districts, you may qualify for a Special Tax Valuation. Additionally, historic buildings enjoy some flexibility under the International Existing Building Code (IEBC), which can help streamline the permitting process.

Here’s how it works: if your home is a contributing building in a National or Local Historic District or is individually listed on the National or Local Register, and your rehabilitation costs are at least 25% of the assessed value (prior to the renovation), you may qualify for a 10-year property tax reduction. What that means for you is that your property taxes will be assessed on the value of your home before you increase that value through the renovation for up to a decade. It’s a win-win situation; you get to maintain the long-term viability of your property and save some money when the tax man comes knocking on the door of your historic, energy-efficient home. It would be prudent to do some due diligence on this program before you start your project; however, you have up to two years to apply after the work has been completed. 

While we’ve made every effort to scrutinize the details of these programs, keep in mind that there’s always a possibility that they may change. That said, we hope you’ve found some ways to save on your project, and if there’s anything not listed here that you know about, we’d love to hear about it.