# The SMART Electric Act Explained

The SMART Electric Act creates a federal rebate program that helps businesses and facilities switch from fossil fuel equipment to electric alternatives. If a factory, manufacturing plant, commercial building, or utility company replaces old gas or oil-powered machinery with electric equipment, the federal government will reimburse them for 30 to 50 percent of the total cost, including installation. The Department of Energy would run this program and start accepting applications within 90 days of the law passing.

The rebates are designed to make the switch to electric technology more affordable for businesses. To qualify, a company needs to prove that the new electric equipment actually saves energy or improves efficiency compared to what it replaced, and they must permanently scrap the old fossil fuel equipment rather than just storing it. The bill also requires that any workers involved in installing the new equipment or removing the old equipment be paid prevailing wages—essentially the standard wage rates for similar construction work in their area. This protects workers from being undercut by cheaper labor.

There's one important limitation: if a company is already required by federal or state law to make the switch to electric equipment, they can't get the rebate. The rebate is meant to incentivize voluntary upgrades beyond what regulations demand. The program would receive $100 million per year for five years (2022 through 2026) to fund these rebates. In practical terms, this means a manufacturing facility that spends $200,000 to replace an old oil-fired heating system with an electric one could receive between $60,000 and $100,000 back from the government, making the upgrade much more financially attractive.

SMART Electric Act

Norcross, Donald

Strengthening Manufacturing in America through Responsible Transitions to Electric Act or the SMART Electric Act This bill directs the Department of Energy (DOE) to establish a program that provides rebates to industrial or manufacturing facilities, commercial buildings, or utilities or energy service companies for energy efficiency upgrades. Specifically, DOE may provide rebates for expenditures made by such entities for energy efficient electrotechnology that is used to replace a fossil fuel-fired technology.