KEY POINTS
- The Low-Income Home Energy Assistance Program (LIHEAP) allows states to allocate up to 15 percent of program funds for weatherization activities and repairs that maximize energy efficiency. Since Fiscal Year 2016 (FY16), states have devoted an average of around nine percent of LIHEAP dollars to weatherization annually.
- States can also request a waiver to allocate up to 25 percent of funds for weatherization. Since FY16, 12 states have received a weatherization waiver at least once, and 10 have received multiple waivers. During this period, between two and 11 states have submitted weatherization waiver requests in a given year. None of these waivers have been denied.
- States seeking weatherization waivers must reapply annually as required by federal LIHEAP statute, requiring them to frequently seek public comment and submit updated justifications.
This is a summary of the full report. Download the full report for more details on the data, methods, and findings.
BACKGROUND
The U.S. Department of Health and Human Services (HHS) administers the LIHEAP block grant, which serves low-income households that pay a high proportion of income on home energy. LIHEAP statute allows grantees, including states, the District of Columbia (D.C.), tribes, and territories, to allocate up to 15 percent of funds for weatherization. This brief focuses specifically on states and D.C. In FY24, national spending on weatherization accounted for 10 percent of LIHEAP funds, totaling $424 million across all 50 states and D.C., nearly as much as the $442 million used for cooling assistance. At least 45 states and D.C. used funds for weatherization in FY24.
Under LIHEAP statute (42 U.S.C. § 8624(k)), states can request a waiver to increase their weatherization limit to 25 percent of funds. States must submit a request each fiscal year and allow for public comment. To approve a standard waiver, the Secretary must find that the number of households and total benefits from other LIHEAP funding areas do not decrease from the prior fiscal year, and that weatherization activities demonstrate measurable savings. If a state does not meet these requirements, the Secretary may still approve the waiver if the state demonstrates "good cause."
THE NATIONAL SHARE OF LIHEAP EXPENDITURES FOR WEATHERIZATION HAS BEEN FAIRLY CONSISTENT SINCE 2016
From FY16 through FY24, between six and 11 percent of LIHEAP funding was allocated for weatherization nationally. States spent between $356 million and $556 million on weatherization annually during that period, averaging $439 million per year, while total LIHEAP funding ranged from $3.5 billion to $8.6 billion, averaging five billion dollars annually. Large supplemental funding increases in certain years (such as FY21's American Rescue Plan Act funds) increased the dollar amount spent on weatherization while lowering its share of the overall program, since total funding grew faster. As supplemental funding tapered off, the weatherization share returned to 10 percent in FY24.
WEATHERIZATION WAIVERS ALLOW SOME STATES TO DEVOTE SUBSTANTIALLY MORE LIHEAP FUNDING TO WEATHERIZATION
Weatherization waivers are relatively uncommon. Between FY16 and FY24, an average of five states each year received weatherization waivers, ranging from 11 states in FY18 to just two states in FY21 and FY22. Twelve states have received at least one weatherization waiver since FY16, and 10 have received repeat waivers, with California, Montana, and Wyoming requesting them most frequently.
In FY24, five states received weatherization waivers — Wyoming, Montana, California, Ohio, and North Carolina — allocating 19 to 25 percent of their total LIHEAP funding to weatherization. By comparison, weatherization accounted for two to 14 percent of LIHEAP funding in the 40 states and D.C. without a waiver. Four states did not spend any LIHEAP funds on weatherization in FY24, and data were unavailable for one state (Hawaii).
Figure 3. Five states received waivers to dedicate additional funds to weatherization in FY24
States receiving waivers in multiple years generally devoted similar shares of funds to weatherization across those years. For example, California has received eight waivers since FY16 and devoted between 21 and 25 percent of its LIHEAP funds to weatherization in those years, averaging 23 percent. Montana has received seven waivers and spent 16 to 23 percent of its funds on weatherization, averaging 22 percent.
LIHEAP WEATHERIZATION SPENDING EXCEEDS WEATHERIZATION ASSISTANCE PROGRAM FUNDING NATIONALLY
The U.S. Department of Energy's Weatherization Assistance Program (WAP) is designed specifically to fund weatherization, while LIHEAP funds a broader set of energy assistance activities; the two programs are complementary, and states can transfer LIHEAP weatherization funds into WAP. In FY24, LIHEAP provided $424 million for weatherization, approximately 72 percent more than the $247 million provided through WAP. LIHEAP weatherization spending exceeds WAP funding in all states that receive weatherization waivers — for example, LIHEAP weatherization funding in FY24 was nearly eight times as much as WAP funding in California, and nearly five times as much in North Carolina. Some states, including Maryland, Massachusetts, Mississippi, and South Dakota, do not allocate any LIHEAP funds to weatherization and rely solely on WAP.
STATES MUST REAPPLY FOR WEATHERIZATION WAIVERS EACH YEAR
To seek a waiver, LIHEAP statute requires states to submit a written waiver request to the Secretary after March 31 of the fiscal year. To approve a standard waiver, the Secretary must find, after reviewing the request and any public comments, that the state's request meets the following criteria:
- The number of households receiving benefits — other than weatherization — will not be lower than the number of households that received benefits the prior fiscal year;
- The aggregate amount of benefits — other than weatherization — will not be lower than the prior fiscal year's aggregate amount; and
- Weatherization activities funded must have demonstrated measurable savings.
States that meet all three criteria may submit a standard waiver request; states that do not meet one or more of these criteria may instead demonstrate good cause for not meeting them. Regulations at 45 CFR 96.83 add further documentation requirements, including a potential two-step submission process and detailed public comment documentation. Since FY16, HHS has approved all waiver requests identified in the available data, and several states have received waivers in multiple years.
CONCLUSION
While national rates of spending on weatherization account for around nine to 10 percent of LIHEAP funds, about five states request waivers to spend up to 25 percent of their funds on weatherization each year, and some do so repeatedly. Among the waiver requests examined since FY16, none were denied. However, the statutory process requires states to provide justifications and hold a public comment period each time they submit a request. ACF could consider streamlining current regulations while maintaining statutory requirements and program oversight.
*This content is in the process of Section 508 review. If you need immediate assistance accessing this content, please submit a request to Danielle Berman, Danielle.Berman@hhs.gov. Content will be updated pending the outcome of the Section 508 review.