By Craig DiLouie, LC, CLCP
Many utilities offer incentive programs to customers to get them to use less energy. This is based on the premise that it is often cheaper to pay customers to use less energy than to build new generating capacity to satisfy future power demand.
The simplest and most popular type of incentive remains the prescriptive rebate, typically targeted to existing buildings. This type of rebate identifies a list of technologies and products that are found to provide suitable performance while saving energy. After installation, the customer receives a rebate check.
Lighting rebates can significantly reduce the installed cost of new lighting in existing buildings, improving payback by 20-25%. At the high end, rebates can absorb as much as 70% of the product cost. In 2016, commercial lighting rebates covered 79% of the United States, according to BriteSwitch, a record since the rebate processing company began measuring rebate coverage nine years ago.
“The programs are strong and people are using them,” says Leendert Jan Enthoven, President, BriteSwitch. “Each year, around 10% of the programs run out of funding completely before the end of their program year.”
Lighting rebate trends
In 2016, many rebate programs began to focus more heavily on LED products, a trend that is continuing in 2017. New rebates are being added as the DesignLights Consortium (DLC) adds new categories. As an example, many more rebates for LED mogul-base lamps intended to replace HID lamps, and LED lamps intended to replace compact fluorescent and U-bend lamps, have become available. The top lighting rebates are LED replacement lamps, LED downlights, LED accent lights (trackheads) and LED high-bays.
“LED technology has had a huge impact on lighting rebates over the past few years,” Enthoven says. “While just a few years ago, rebate programs were reluctant to provide money for LEDs, today some programs have changed to be exclusively for LED products.”
As a consequence of this emphasis on LED technology, rebate amounts per product have been declining rapidly—10-20% each year—reflecting falling LED product costs. Another consequence of falling LED product costs is caps based on end-user cost or payback periods; a given rebate might be $15 per lamp, but the customer may only earn a fraction of that.
Most rebate programs use third-party standards such as DLC, ENERGY STAR or CEE to determine product eligibility. About 94% of rebate programs for LED screw-in replacement lamps use ENERGY STAR, while 60-80% require DLC, depending on the product type.
|Type of LED Solution||2014||2015||2016||2017|
|LED Replacement Lamps||$ 15.89||$ 10.73||$ 11.38||$ 9.52|
|LED Downlight Fixtures||$ 28.50||$ 34.10||$ 34.15||$ 32.79|
|LED Accent Lighting (Track heads)||$ 67.01||$ 49.59||$ 60.12||$ 50.79|
|LED High Bay Fixtures||$ 72.63||$ 85.70||$ 80.24||$ 87.52|
|LED Parking Garage Fixtures||$ 87.97||$ 106.51||$ 93.91||$ 84.69|
|LED Linear Panels (TL Replacement)||$ 43.33||$ 35.74||$ 33.84||$ 32.45|
|LED Outdoor Pole-Arm Mount||$ 84.74||$ 101.89||$ 89.52||$ 86.30|
|LED Wall Mount||$ 82.63||$ 77.08|
|LED Linear Tube||$ 13.89||$ 11.84||$ 7.95||$ 6.84|
|LED Screw in HID||$ 60.80||$ 110.02|
Source: BriteSwitch North American Rebate and Incentive Database – 2/2017.
Lighting control rebate trends
In contrast with the volatility in the lighting rebate market, lighting control rebates have remained relatively constant. Average rebates cover a significant portion of the installed cost.
“Availability of control rebates is at an all-time high, with most organizations including control rebates in their programs,” Enthoven notes.
The most popular control rebates cover occupancy sensors, light sensors and daylight dimming systems. Many programs do not require controls to be on any list to qualify, though they may impose certain requirements such as being UL-listed or hardwired (though many programs are removing the latter, allowing wireless controls). That may change as the new DLC category for networked lighting controls results in new rebate programs.
“A lot of rebates for controls have a minimum connected wattage requirement in order to qualify,” Enthoven says. “For example, a wall-mounted occupancy sensor might be required to control at least 500W in order to qualify for rebates. These rules were often based on older, inefficient lighting products, so new installations with LEDs couldn’t qualify for rebates. This year, we started to see those requirements be adjusted downward.”
|Type of Upgrade (Retrofit)||2014||2015||2016||2017|
|Remote-Mounted Occupancy Sensors||$ 32.59||$ 32.68||$ 31.16||$ 31.29|
|Wallbox Occupancy Sensors||$ 23.10||$ 23.28||$ 21.93||$ 22.45|
|Photocells||$ 26.26||$ 25.95||$ 25.00||$ 17.92|
|Fixture-Mounted Occupancy Sensors||$ 20.54||$ 20.76||$ 19.30||$ 19.10|
|Daylight Dimming Systems||$ 44.17||$ 25.95||$ 25.00||$ 24.27|
Source: BriteSwitch North American Rebate and Incentive Database – 2/2017.
Getting the rebate
There is substantial funding available to reduce the cost of upgrading existing lighting systems, but they can take a lot of work.
Get to know the program. There are some 3,000 utilities in the United States, and programs vary among those offering rebate programs. As a result, it is beneficial to get to know the local program early—what incentives are available, what products qualify, approval deadlines and how to get the rebate. This means determining the process and how long each step takes.
“Across the U.S., the rebate pre-approval process takes 29 days on average,” Enthoven says. “Lighting professionals need to include the rebate process in their project plans, allowing at least five weeks prior to installation for pre-approval and anywhere from 10-12 weeks afterwards to chase down the rebate check.”
Programs often require pre-approvals. Pre-approval is required in about 80% of rebate programs. Starting installation before approval is granted can disqualify the project for a rebate.
Identify products that qualify. The large majority of rebate programs recognize only qualifying products for rebates. Often, this involves the product demonstrating compliance with performance criteria published by DLC, ENERGY STAR or CEE.
Stay on top of the program. Rebates have become more competitive, with a significant number of programs running out of funding during the year. Stay on top of current funding to ensure promised rebates can be delivered.
Stay engaged with your application. Be sure to comply with all requirements and deadlines. Avoid mistakes on required paperwork such as an incorrect address (a common mistake). As rebate programs accept thousands of applications, mistakes can occur at the utility’s end too, so some follow-through can be beneficial. Rebates take time and work.
Become a trade ally. Many rebate programs maintain a network of qualified service providers, or trade allies. It can be beneficial to join these networks to gain valuable recognition and access to program resources such as training.
“While they may seem scary or intimidating, lighting rebates are one of the best ways to help convince customers to do an energy efficiency project,” Enthoven says. “Not only does it decrease their total cost, but since rebate programs can suddenly change or run out of funding, it can create a sense of urgency for the customer to do the lighting upgrade now. Too many people miss out on the opportunity and don’t mention rebates when they’re quoting the project, or don’t follow up properly on the actually paperback and still miss out.”
For a list of rebates and other energy incentives available across the United States, visit www.dsireusa.org or contact a manufacturer.