Finance

South Dakota opts out of Inflation Reduction Act energy rebates

Published

8 months ago

September 30, 2024

Owngarden | Moment | Getty Images

A handful of states have rolled out rebates to consumers who make their homes more energy-efficient, just months after New York became the first state to do so, in May.

Meanwhile, South Dakota officials in August declined the federal funding, which is tied to two new programs created by the Inflation Reduction Act, a landmark climate law enacted in 2022.

The IRA earmarked $8.8 billion for consumers via two Home Energy Rebates programs.

Consumers can access up to $8,000 of Home Efficiency Rebates, and up to $14,000 of Home Electrification and Appliance Rebates.

Together, the two rebate programs aim to defray — or in some cases fully offset — the cost of retrofitting homes and upgrading appliances to be more energy-efficient. Such tweaks can help consumers cut their utility bills while also reducing planet-warming carbon emissions, officials said.

The two programs have varying rules that determine which consumers are eligible and how much money they can access. In some cases, rebates will depend on household income and a home’s overall energy reduction.

Nearly every state has indicated it will launch a rebate program for residents, according to a U.S. Department of Energy spokesperson.

State officials had an August deadline to officially decline the federal funds. They have a Jan. 31, 2025 deadline to submit a program application to the DOE.

South Dakota is the only state so far to have signaled publicly that it won’t administer the rebates.

“With good faith, we did look into this,” Jim Terwilliger, commissioner of the South Dakota Bureau of Finance and Management, said during a July 30 appropriations hearing. “We just don’t believe that it’s the right thing for South Dakota.”

Here are the states that have applied

States, which administer the federal funds, have some leeway relative to program design. They must apply for funding and can distribute rebates to consumers after their application is approved.

New York launched the first phase of its rebates May 30.

Five others — Arizona, Maine, New Mexico, Rhode Island and Wisconsin — have since launched rebate programs, too, according to U.S. Department of Energy data as of Sept. 24.

“I’m expecting more and more to roll out,” said Kara Saul-Rinaldi, president and CEO of AnnDyl Policy Group, a consulting firm focused on climate and energy policy.

Renewable energy will grow regardless of election outcome, says AES CEO Andrés Gluski

Many more states, as well as Washington, D.C., have submitted applications or had them approved, according to DOE data: California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Michigan, Minnesota, New Jersey, New Hampshire, Massachusetts, North Carolina, Oregon, Tennessee, Vermont, Washington and West Virginia.

Together, these 26 states plus the District of Columbia have applied for $4 billion in total funding so far, the DOE said.

The rebates are a new program, and “complex government programs like these take time and coordination to set up,” according to a DOE spokesperson.

“The Inflation Reduction Act put states in charge of designing and implementing Home Energy Rebate programs that fit their local needs,” the spokesperson wrote in an e-mail. “As each state has different resources and capabilities, each state’s timeline will be different.”

South Dakota is not participating

South Dakota Gov. Kristi Noem at the Republican National Convention on July 15, 2024.

Scott Olson | Getty Images News | Getty Images

However, South Dakota officials in August signaled they wouldn’t participate, the lone state so far to decline the federal rebate funding.

“South Dakota will have no part in facilitating the Green New Deal,” Ian Fury, a spokesperson for Gov. Kristi Noem, a Republican, said in an e-mailed statement.

States had an Aug. 16, 2024 deadline to officially decline the funds.

“We don’t think the administrative burden and the expense of administering a program like that is the appropriate thing to do, and we generally disagree with the policy,” Terwilliger, of the South Dakota Bureau of Finance and Management, said in a July hearing.

The Inflation Reduction Act allows states to use up to 20% of its funding for administrative purposes.

Fifty-one states and territories have applied to DOE for early administrative funding, the agency said.

The $68.6 million of federal money that had been set aside for South Dakota rebates will be redistributed among participating states.

Fury also noted this isn’t the first time South Dakota has rejected federal spending. It was the only state to reject extended unemployment benefits in 2020 during the Covid-19 pandemic, Fury said.

The Green New Deal is a climate-change policy initiative supported by congressional Democrats starting around 2019. Bipartisan legislation to create an energy rebate program had existed almost a decade earlier, like the Home Star Energy Retrofit Act in 2010.

The concept of consumer rebates tied to energy efficiency “predates the Green New Deal by many years,” said Saul-Rinaldi.

Florida reverses course

It appears Florida officials reversed course from their original stance on the rebates.

Republican Gov. Ron DeSantis in 2023 had vetoed the state’s authority to spend about $5 million of federal funds to administer the energy rebate program. At the time, a spokesperson for the state’s Department of Agriculture and Consumer Services told CNBC that Florida wouldn’t be applying for the rebates as a result.

Florida Gov. Ron DeSantis at the Republican National Convention on July 16, 2024.

Robert Gauthier | Los Angeles Times | Getty Images

Now, Florida is preparing for a soft launch of the rebate programs in late 2024 and a full launch in early 2025, according to information on a state website.

A spokesperson for the Department of Agriculture and Consumer Services didn’t return a request for comment on the change in position.

‘Every state is approaching [its program] differently’

At a high level, consumers will be able to get the rebates at the point of sale, when they buy an appliance directly from a retailer or from a qualified contractor who’s helping a household complete an efficiency project.

“Every state is approaching [its program] differently, for many reasons,” Saul-Rinaldi said.

Many are rolling them out in phases. For example, New Mexico is starting by offering a $1,600 rebate for low-income consumers in single-family homes who buy insulation from a participating retailer.

Similar to other states, qualifying New Mexico residents will be able to later access additional rebates such as:

$8,000 for an ENERGY STAR-certified electric heat pump for space heating and cooling;
$4,000 for an electrical panel;
$2,500 for electrical wiring;
$1,750 for an ENERGY STAR-certified electric heat pump water heater;
$1,600 for air sealing; and
$840 for an ENERGY STAR-certified electric heat pump clothes dryer and/or an electric stove.

Consumers and contractors should consult their state energy department website to learn more about their specific programs and eligibility, Saul-Rinaldi said.

The U.S. Energy Department suggests households don’t wait to accomplish necessary home energy upgrades or projects if their state hasn’t formally rolled out rebates. They may be eligible for other federal programs, “including tax credits, the Weatherization Assistance Program, and other state, local, and utility programs,” the agency said.

Finance

UK to regulate buy now, pay later firms like Klarna and Affirm

Published

17 minutes ago

May 19, 2025

Business Finance News

Klarna is synonymous with the “buy now, pay later” trend of making a purchase and deferring payment until the end of the month or paying over interest-free monthly installments.

Nikolas Kokovlis | Nurphoto | Getty Images

The U.K. government on Monday laid out proposals to bring short-term loans under formal rules as it looks to clamp down on the “wild west” of the buy now, pay later sector.

Fintech firms like Klarna and Block’s Afterpay have flourished by offering interest-free financing on everything from fashion and gadgets to food deliveries — while at the same time stoking concerns around affordability. The space is highly competitive, with U.S. player Affirm launching in the U.K. just last year.

City Minister Emma Reynolds said in a statement Monday that the U.K.’s new rules were designed to tackle a sense of “wild west” in the buy now, pay later (BNPL) space, adding the measures “will protect shoppers from debt traps and give the sector the certainty it needs to invest, grow, and create jobs.”

Under the U.K. proposals, BNPL firms will be required to make upfront checks to ensure people can repay what they borrow and make it easier for customers to access refunds.

Consumers will also be able to take BNPL complaints to the Financial Ombudsman, a service created by the U.K. Parliament to settle disputes between consumers and financial services firms.

The rules are expected to come into force next year, according to the government.

Klarna said it has long supported calls to bring BNPL into the regulatory fold. “It’s good to see progress on regulation, and we look forward to working with the FCA on rules to protect consumers and encourage innovation,” a spokesperson for the company told CNBC via email.

“Regulation will give clarity and consistency to the sector, establishing a consistent operating environment and compliance standards for all providers,” spokesperson for Clearpay, the U.K. arm of Afterpay, said in an emailed statement.

“It will also create a more sustainable foundation for the future of BNPL as it continues to grow as an everyday payment option for consumers.”

While buy now, pay later firms have publicly expressed support for regulation, many were concerned about regulators applying outdated rules to their business models. The Consumer Credit Act, which regulates lending and borrowing in the U.K., has existed for over 50 years.

For its part, the government said it plans to adapt the Consumer Credit Act to allow for a “modern, pro-growth framework that reflects how people borrow today.”

WATCH: CNBC’s full interview with Affirm CEO Max Levchin

Finance

China’s April retail sales growth of 5.1% misses expectations as consumption remains a worry

Published

9 hours ago

May 18, 2025

Business Finance News

Citizens are shopping at a supermarket in Nanjing, East China’s Jiangsu province, on March 9, 2024.

Costfoto | Nurphoto | Getty Images

China’s retail sales growth slowed in April, data from the National Bureau of Statistics showed Monday, signaling that consumption remains a worry for the world’s second-largest economy.

Retail sales rose 5.1% from a year earlier in April, missing analysts’ estimates of 5.5% growth, according to a Reuters poll. Sales had grown by 5.9% in the previous month.

Industrial output grew 6.1% year on year in April, stronger than analysts’ expectations for a 5.5% rise, while slowing down from the 7.7% jump in March.

Fixed-asset investment for the first four months this year, which includes property and infrastructure investment, expanded 4.0%, slightly lower than analysts’ expectations for a 4.2% growth in a Reuters poll.

The drag from real estate worsened within fixed asset investment, falling 10.3% for the year as of April.

The urban survey-based unemployment rate in April eased to 5.1% from 5.2% in March.

The data came against the backdrop of trade tensions between China and the U.S.

U.S. President Donald Trump placed tariffs of 145% on imports from China that came into effect in April. Beijing retaliated with tariffs in kind, with 125% levies on American imports.

Trade-war fears have receded after a meeting of U.S. and Chinese trade representatives in Switzerland earlier this month led to a lower set of levies between the world’s two largest economies.

Beijing and Washington agreed to roll back most of the tariffs imposed on each other’s goods for 90 days, allowing some room for further negotiation to reach a more lasting deal.

That prompted a slew of global investment banks to raise their forecasts for China’s economic growth this year while paring back expectations for more proactive stimulus as Beijing strives to reach its growth target of around 5%.

This is breaking news. Please check back later for updates.

Finance

Scott Bessent calls Moody’s a ‘lagging indicator’ after U.S. credit downgrade

Published

21 hours ago

May 18, 2025

Business Finance News

Treasury Secretary Scott Bessent said in an interview on NBC News’ “Meet the Press” that Moody’s Ratings were a “lagging indicator” after the group downgraded the U.S.’ credit rating by a notch from the highest level.

“I think that Moody’s is a lagging indicator,” Bessent said Sunday. “I think that’s what everyone thinks of credit agencies.”

Moody’s said last week that the downgrade from Aaa to Aa1 “reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns.”

The treasury secretary asserted that the downgrade was related to the Biden administration’s spending policies, which that administration had touted as investments in priorities, including combatting climate change and increasing health care coverage.

“Just like Sean Duffy said with our air traffic control system, we didn’t get here in the past 100 days,” Bessent continued, referring to the transportation secretary. “It’s the Biden administration and the spending that we have seen over the past four years.”

The U.S. has $36.22 trillion in national debt, according to the Treasury Department. It began growing steadily in the 1980s and continued increasing during both President Donald Trump’s first term and former President Joe Biden’s administration.

Bessent also told moderator Kristen Welker that he spoke on the phone with the CEO of Walmart, Doug McMillon, who the treasury secretary said told him the retail giant would “eat some of the tariffs, just as they did in ’18, ’19 and ’20.”

Walmart CFO John David Rainey previously told CNBC that Walmart would absorb some higher costs related to tariffs. The CFO had also told CNBC separately that he was “concerned” consumers would “start seeing higher prices,” pointing to tariffs.

Trump said in a post to Truth Social last week that Walmart should “eat the tariffs.” Walmart responded, saying the company has “always worked to keep our prices as low as possible and we won’t stop.”

“We’ll keep prices as low as we can for as long as we can given the reality of small retail margins,” the statement continued.

When asked about his conversation, Bessent denied he applied any pressure on Walmart to “eat the tariffs,” noting that he and the CEO “have a very good relationship.”

“I just wanted to hear it from him, rather than second-, third-hand from the press,” Bessent said.

McMillon had said on Walmart’s earnings call that tariffs have put pressure on prices. Bessent argued that companies “have to give the worst case scenario” on the calls.

The White House has said that countries are approaching the administration to negotiate over tariffs. The administration has also announced trade agreements with the United Kingdom and China.

Bessent said on Sunday that he thinks countries that do not negotiate in good faith would see duties return to the rates announced the day the administration unveiled across-the-board tariffs.

“The negotiating leverage that President Trump is talking about here is if you don’t want to negotiate, then it will spring back to the April 2 level,” Bessent said.

Bessent was also asked about Trump saying the administration would accept a luxury jet from Qatar to be used as Air Force One, infuriating Democrats and drawing criticism from some Republicans as well.

The treasury secretary called questions about the $400 million gift an “off ramp for many in the media not to acknowledge what an incredible trip this was,” referring to investment commitments the president received during his trip last week to Saudi Arabia, Qatar and the United Arab Emirates.

“If we go back to your initial question on the Moody’s downgrade, who cares? Qatar doesn’t. Saudi doesn’t. UAE doesn’t,” he said. “They’re all pushing money in.”

When asked for his response to those who argue that the jet sends a message that countries can curry favor with the U.S. by sending gifts, Bessent said that “the gifts are to the American people,” pointing to investment agreements that were unveiled during Trump’s Middle East trip.

Sen. Chris Murphy, D-Conn., criticized Bessent’s comments about the credit downgrade, saying in a separate interview on “Meet the Press.”

“I heard the treasury secretary say that, ‘Who cares about the downgrading of our credit rating from Moody’s?’ That is a big deal,” Murphy said.

“That means that we are likely headed for a recession. That probably means higher interest rates for anybody out there who is trying to start a business or to buy a home,” he continued. “These guys are running the economy recklessly because all they care about is the health of the Mar-a-Lago billionaire class.”