The ICEE HOT Act creates a new rebate program to help make clean energy appliances and heating systems more affordable and accessible. The program gives money back to manufacturers, distributors, contractors, and consumers who buy or install energy-efficient products like heat pump water heaters, electric heat pumps for heating and cooling, induction stoves, electric dryers, and smart electrical panels. It also covers industrial heat pumps used in manufacturing.

States can offer two types of rebates: "midstream rebates" that go to distributors and contractors to lower their costs, and "upstream rebates" that go directly to manufacturers. These rebates cover up to 30 percent of the cost of these products. The key requirement is that at least 40 percent of rebate money must go to disadvantaged businesses or businesses that employ a significant number of disadvantaged workers, ensuring that lower-income communities and minority-owned businesses benefit from the program.

To qualify, products must be made in the United States (at least 55 percent of components), certified as energy-efficient, and meet specific performance standards. The program includes extra incentives for contractors who have union agreements and for products that exceed basic efficiency standards. Importantly, contractors and distributors must pass at least 85 percent of their rebates down to consumers in the form of lower prices, so regular people actually see savings when buying these products. The federal government will provide $10 billion to states between 2025 and 2032 to run these programs.