Rebates remain a strong incentive for investing in energy-efficient lighting and controls. In 2021, significant opportunities are widely available for LED lighting and controls, including continuing availability of rebates for networked controls.
About rebates
Rebates are offered by utilities seeking to avoid the cost of building new power plants by reducing demand. While custom rebates are available, the majority of rebates are prescriptive, with a cash amount awarded per installed qualifying product, and with the rebate capped at a maximum percentage of its cost.
Typically, the rebate is given to the customer, though some rebates for very common luminaires and lamps are “midstream,” realized at the point of sale. About three-quarters of the United States is covered by commercial lighting rebate programs, according to rebate fulfillment firm BriteSwitch. While rebate availability is fairly consistent across the United States, Ohio’s utilities discontinued their rebate programs at the end of 2020 due to a state law.
Rebates typically improve lighting upgrade project payback by 20 to 25 percent, though this varies widely by technology and rebate program. As a general range, a rebate may cover 10 to 70 percent of the lighting product cost, according to BriteSwitch. Over the years, utilities have shied away from paying the entire cost and want the owner to share it.
As with other areas of the lighting industry, the COVID pandemic impacted the rebate landscape in 2020. Rebate availability remained largely unchanged, though there were disruptions and slowdowns in rebate processing, and inspections shifted to virtual. Project delays, however, resulted in many programs not achieving their energy savings goals, which prompted some programs to offer bonus incentives.
LED product rebates
The most popular commercial lighting rebates are shown in the below table, along with average rebates per installed product for both the United States and Canada. The data is as of February 2021.
According to BriteSwitch, with the exception of troffers and flat panels, average rebates remained fairly stable across LED product categories in 2021 compared to 2020. This is remarkable, considering LED rebates on average have declined 10-20 percent annually due to falling product costs. While this may be due to reduced demand for rebates, it may also be suggestive of cost stabilization in the market.
| Type of LED Solution | 2021 |
| 4′ LED T8 | $ 4 |
| Replacement Lamps (medium base, A19, PAR, BR) | $ 4 |
| Pin-Based (CFL-ni replacement) | $ 7 |
| Downlight Fixtures | $ 33 |
| Troffers / Flat Panels | $ 33 |
| Screw in HID (mogul replacement lamp, corn cob) | $ 53 |
| Wall Mount Fixtures | $ 91 |
| Parking Garage Fixtures | $ 94 |
| Outdoor Pole-Arm Mount | $ 97 |
| High Bay Fixtures | $ 121 |
Source: BriteSwitch
A more detailed picture of long-term trends is shown in the following graphic.
A majority of rebate programs qualify products as being eligible for rebate by requiring listing with the DesignLights Consortium (DLC) on its Qualified Products List. In February 2021, Version 5.0 of the DLC’s technical requirements went into effect. Recognizing the impact of the COVID pandemic on manufacturers, in November 2020, the DLC extended the delisting date for products qualified under Version 4.4 to February 28, 2021.
Among the changes in Version 5.0 are higher efficacies for LED products along with a requirement to report dimming capability. DLC continued to differentiate standard and DLC Premium products, with Premium required to achieve a higher efficacy minimum, be capable of continuous dimming, and report whether the luminaire features integral controls.
According to BriteSwitch, a minority of rebate programs promoted Premium products since the classification launched in 2017, either by requiring it across the board or by rewarding installation with a bonus rebate, typically $10-25. In 2021, however, the number of rebates promoting Premium diminished, possibly due to the higher efficacy required for standard luminaires in Version 5.0.
On the heels of Version 5.0 is 5.1, which goes into effect in 2021, with products required to be listed by December 31. Version 5.1 expands reporting requirements to include lighting quality and it requires dimming for a broad range of DLC standard products, with continuous dimming required as a capability for most indoor luminaires and retrofit kits. Some manufacturers are skipping Version 5.0 and gaining listing for Version 5.1.
Lighting control rebates
The most popular lighting control rebates are shown in the below table, along with average rebates per installed product for both the United States and Canada. The data is as of February 2021. Networked lighting control rebates are not shown, as approaches remain non-standardized.
Data shared by BriteSwitch reveals average rebate amounts have remained substantial and relatively stable over the past 12 years. These rebates can make adding controls, particularly standalone sensors, a very attractive add-on upgrade. DLC listing is not required for the below lighting control systems and devices, though it usually is for networked lighting controls.
| 2021 | |
| Remote Mounted Occupancy Sensors | $ 26 |
| Wall-box Occupancy Sensors | $ 23 |
| Photocells | $ 19 |
| Fixture Mounted Occupancy Sensors | $ 23 |
| Daylight Dimming Systems | $ 27 |
Source: BriteSwitch
A more detailed picture of long-term trends is shown in the following graphic.
Networked lighting control rebates
In 2016, the DLC launched a Qualified Products List for Networked Lighting Controls based on interest by utilities in maximizing energy savings with lighting controls. In DLC research of more than 100 applications, these systems generated an average 47 percent energy cost savings.
In 2020, the number of programs promoting networked lighting controls grew 15 percent to 95 programs (about 25 percent of total programs), according to BriteSwitch. In 2021, however, only three new programs were added, and overall dollar amounts available have remained essentially the same. Ninety percent of programs require DLC listing.
These programs vary in approach, with about 70 percent offering a rebate adder for each luminaire connected to a qualifying networked control system, and others basing it instead on energy reductions (kWh) or power savings (W). According to BriteSwitch, for the first approach, the rebate for a new LED luminaire with networked lighting controls is on average about 30 percent higher than installing a luminaire without the controls. Rebate program managers are continuing to experiment with approaches. Where a specific prescriptive rebate is not available, networked controls may be eligible for a custom rebate.
Get the rebate
Incorporating rebates into lighting upgrade proposals can increase projected return on investment and thereby increase the likelihood of approval, so be sure to research available rebates as a first step. Robust lighting control rebates incentivize including either control devices such as sensors or networked lighting control systems as an attractive upfront add-on to an LED upgrade.
According to BriteSwitch, the process of gaining a rebate from pre-approval to payment can take around five months, though in the current COVID era, it can be even longer. Rebate programs are not standardized, vary widely, and may change, so it pays to learn the requirements. The end-user should understand what to expect, such as it can take an average 38 days to receive a check.
Professionals selling upgrades can include rebates in their proposals, which can help gain approval. However, it’s important to understand the rebate may not be approved or may award a smaller amount than planned, so the proposal should be worded to avoid the risk of eating the difference if the rebate doesn’t pan out.
Pre-approval is often required before installation begins. All forms must be properly completed. In some regions, participation may drain funds early, making it worthwhile to check on rebate availability. If DLC listing is required for an LED product, ensure the exact model number for a selected product is listed. Onsite (or virtual) inspection may be required to verify installation of the products.
Visit the website of your local utility or click here to determine rebate availability in your area.
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