The Energy Policy Act 2005 (EPACT 2005) Sec. 206 provides for the establishment of a rebate program for expenditures made to install renewable energy systems in connection with a dwelling unit or small business. The amount of the rebate is set at 25 percent of the expenditures made by the consumer or $3,000, whichever is less. Annual funding to carry out this program was authorized in the law, starting with $150 million for Fiscal Year (FY) 2006 and ending with $250 million for FY 2010. However, Congress has not appropriated these funds to date.

According to this legislation, renewable energy sources include energy derived from solar, geothermal, biomass^[1], and wind for nonbusiness residential purposes. In addition, it includes any other form of renewable energy which the Secretary of Energy specifies by regulation for the purpose of heating or cooling a dwelling or providing hot water or electricity for use within a dwelling.