The Light Direction Blog:
Utilities across the United States offer a variety of financial incentives to help commercial and industrial customers increase their energy efficiency by installing, among other things, advanced lighting systems and controls.
While these rebates can be a blessing for building owners who want to reap the energy cost rewards without destroying their operating budgets, these rebates can be notoriously difficult to find and even more tedious to claim.
Advancements in lighting technology, along with the proliferation of options, have created tremendous opportunities for energy efficiency, and utility companies are eager to incentivize businesses to take advantage of these upgrades.
It’s the perfect time for commercial and industrial businesses to take advantage of these attractive returns on their investments, provided they are willing to navigate these often-complex utility programs.
In an effort to help, we’re going to take a look at the eight most frequently asked questions the folks at NaturaLED® receive about utility rebates and incentives. These provide a starting point, but it is always best to consult with your area utility company to discuss the details of their incentive programs as they vary widely from company to company.
1. Why do utilities offer rebates and incentives in the first place? Reducing the amount of energy consumed is good for both facilities and utilities. Utilities have seen a great increase in demand for energy over the past 20-30 years. By reducing demand through the installation of energy-efficient technology, driven by these rebate programs, they avoid the need to build additional capacity and facilities. In addition, as utilities are faced with more competition, they need to focus on increasing customer retention by avoiding service interruptions, especially during peak times, and responding to customer requests for these rebate programs. 2. Are there different types of commercial utility rebates for lighting? Yes, there are two main types of rebates that utilities offer to incentivize facility lighting upgrades. Those rebates are called prescriptive and custom rebates.
Prescriptive Rebates are based on installing approved energy-efficient equipment. These incentives are predetermined dollar amounts that generally don’t require pre-approval unless the incentive is over a specific amount. They are usually applied after installation.
Custom utility rebates vary greatly between utility programs but are usually based solely on the amount of energy that is saved. These energy savings must be measured and verified during pre-installation and post-installation by the utility. Facilities and their Esco/Contractor/Consultant work with the utility to determine equipment eligibility, implement measurement and verification processes, and set potential rebate amounts before the beginning of the project. Once the project is completed, the utility will perform the assessment before the rebate is issued.
The rebate incentives involved usually have a significant impact on the final cost and payback period of the project. 3. Is the rebate process difficult and time-consuming? To be fair, most programs strive to make these rebates easy to take advantage of, but few achieve this goal. Rebate programs differ significantly from utility to utility, and the level of difficulty in applying for them depends on the program. However, for the most part, these programs are hallmarked by lengthy forms, poorly designed online portals, and understaffed call centers that can be difficult to navigate, so that’s why a lot of business owners prefer to use someone with experience with these programs (i.e., Energy Service Companies, distributors or consultants). Progress has been made though, and over the past several years the paperwork and submission processes have been streamlined as utilities commit to improving the process. As long as people have reasonable expectations and understand going in that the process will be a bit complex (average 12 steps to complete) and that it may take several months to complete in order to get your rebate check, then you shouldn’t be disappointed. 4. Do utility rebates change often? Yes, these rebate programs change all of the time for many different reasons. Technology, market dynamics, and funding are just a few of the reasons we’ve seen rebates change over the years. Many of these programs are well-funded and have more incentives than they have people applying for them. While other programs are accounted for shortly after they’re announced. If you’re interested in these programs, it’s recommended that you stay current on the program in your area by contacting your local utility or searching the various online rebate databases. 5. Can any LEDs qualify for the rebate? Consumers may be surprised to learn that not every LED lamp or fixture qualifies for an incentive. We have heard from many people who opted to purchase the cheapest LEDs on the market and were extremely unhappy to learn they couldn’t qualify for the rebate.
Most incentive programs have technical requirements that must be met to qualify for the rebate. Usually, for lighting products, it boils down to whether the product is qualified on the Design Lights Consortium (DLC) Qualified Product List or the Energy Star Certified List.
Energy Star is a program by the U.S. EPA and the DOE. They provide certification lists for lighting products that can be installed in residential and commercial applications. They mainly qualify certain lamps, downlights, and decorative accent products.
The DLC is a nonprofit organization for many types of commercial applications. These products include linear tubes, light fixtures, and networked lighting controls.
6. Are utility incentives available for new construction or are they just for upgrades? Incentives are often available for ground-up construction, building additions and expansions, and complete building repurposing, but you need to check with your utility directly. These types of programs are very beneficial to the utility company who wants to have the building use the most energy-efficient technology available. 7. Should I be working with an Esco, Distributor, or consultant? I highly recommend that business owners and facility managers work with a third party who can help them navigate the complex world of lighting upgrades and utility rebate programs. The time you will save by using an expert will reap a tremendous benefit, and the financial incentives can be used to offset those costs. Not to mention they will have the experience in finding you all of the various incentives available, and they often have long-standing relationships with principals at the utility who can offer advice and help streamline the process. 8. Is there a list of all available current utility rebates and incentives? There are several places to go for lists of rebates, but what I’ve found to be the most comprehensive list of rebates in each state is with DSIRE (www.dsireusa.org). This database is a great source of information on state, local, utility, and federal incentives that promote renewable energy and energy efficiency.
There are plenty of opportunities to utilize energy-efficiency rebate programs that save energy and save your precious dollars each month. NaturaLED® has a wide selection of DLC qualified and Energy Star qualified products as well as an experienced team that will help provide the right solution for your needs.