Overview:
A longstanding federal initiative aimed at helping low-income Americans with their energy bills is set to receive an additional $20 million in 2026. This funding comes despite previous attempts by the Trump administration to cut it entirely.
The Low Income Home Energy Assistance Program, known as LIHEAP, will receive around $4.05 billion as part of a budget package that sustains various government operations through September. Trump recently signed this bill, which resolved a short government shutdown.
Additionally, another appropriations bill that Trump approved last month provides a modest funding boost for a program supporting weatherization projects that enhance energy efficiency in low- and moderate-income households. While a parallel initiative seeking to expand funding for this program has gained unanimous support in a key House committee, it still awaits a vote on the House floor.
Insights:
Established in 1981 in response to the energy crises of the 1970s, LIHEAP is designed to offer financial aid to states for heating, cooling, and weatherization assistance for qualifying households. The funding boost from 2025 reveals a significant turnaround for the program, especially considering earlier calls from the White House to eliminate its funding.
Eligibility for LIHEAP varies by state but typically allows households earning either 150% of the federal poverty line or 60% of the state median income to qualify. In 2024, LIHEAP helped approximately 6 million households, a small fraction of the roughly one in six families in America falling behind on utility payments.
Utility organizations expressed support for LIHEAP’s continued funding, with leaders thanking members of Congress from both parties for their advocacy of the program during budget discussions.
The bulk of LIHEAP funds goes to directly subsidizing energy costs, while a portion also targets energy efficiency initiatives, particularly during extreme weather conditions. In 2022 alone, the program allocated over $617 million to energy-saving projects, generating substantial energy savings for recipients.
LIHEAP falls under the Department of Health and Human Services, which is funded by the recently signed appropriations bill. The Trump administration had previously reorganized the department, resulting in numerous layoffs among LIHEAP staff. The administration had argued that the funding was unnecessary due to state regulations preventing utility shutoffs for low-income individuals.
In June, bipartisan support led to the introduction of legislation aimed at safeguarding LIHEAP funding by ensuring adequate staffing levels. This week, full funding for the upcoming fiscal year was incorporated into the government spending bill.
Going Forward
In January, Trump also approved an appropriations bill for the U.S. Department of Energy, which included a modest increase for the Weatherization Assistance Program—a program that funds energy-efficient upgrades for low- and moderate-income homes.
With a budget of $329 million for fiscal year 2026, the Weatherization Assistance Program aims to offer average subsidies of approximately $6,500 per housing unit for necessary upgrades, including renewable energy system investments.
The House Energy and Commerce Committee recently voted unanimously in favor of a bill that proposes to nearly double average subsidies for this program. However, action on this legislation on the House floor has yet to be determined.
A representative for the bill’s lead Democratic sponsor indicated that the next step is to bring the bill to a vote; however, the timeline for that is still uncertain.