The 2024 commercial lighting rebate outlook suggests widespread supply of funding for lighting projects but lessening demand as some territories transition into a period of LED saturation. While the remaining late majority and laggard market segments are not as easy to acquire as customers, rebates may be critical to winning business.

Commercial lighting rebate programs

Commercial lighting rebates are offered by energy-efficiency programs to reduce demand for electric power, as it is typically more cost-effective than investing in new supply. By reducing initial cost, return on investment improves, which makes investment more attractive. Armed with rebate dollars, contractors can become more competitive in winning retrofit projects.

The most common rebate type is prescriptive, offering a cash amount as incentive to install a qualifying energy-efficient product. While “instant” rebate programs have gained in popularity, the most common prescriptive rebate type is downstream, where the owner receives the payment.

Commercial lighting rebates are widely available, covering nearly 80% of the United States. They also have stable or increased funding for LED products and lighting controls, according to rebate fulfillment firm BriteSwitch.

As programs increasingly face a funding surplus, the number of bonus programs is rising, and they are offered earlier in the year. An interesting development is in Ohio, which discontinued rebates at the end of 2020 due to state legislation. In 2023, FirstEnergy, which covers about a third of the state, reopened a commercial lighting rebate.

In 2024, the most popular commercial lighting rebates continue to be replacement lamps, troffers/flat panel, downlight, wall-mount, parking garage, outdoor pole-arm mount and high-bay luminaires. Despite federal legislation phasing out general-service medium-base lamps, some rebate programs surprisingly are still incentivizing LED replacements. Meanwhile, horticultural lighting rebates, which rapidly grew as a specialized category in recent years, have stabilized at nearly 650 utilities offering an incentive and with the average rebate being about $100 per luminaire.

Lighting control rebates continue to be available, according to BriteSwitch. Popular rebates include remote-mounted, wallbox and luminaire-mounted occupancy sensors, which saw an increase in average rebate dollars in 2024, a total average increase of 5%.

Some rebate programs are getting more aggressive on capturing energy savings by tying rebates for new LED luminaires to paired lighting controls. Meanwhile, many programs are experimenting with how to rebate networked lighting controls, although there are signs of some standardization in 2024. According to BriteSwitch, 53% of rebates are prescriptive—easier to adopt—and 70% incentivize networked controls on a per-luminaire basis.

Are they right for me?

The rebate process requires administrative resources or outsourcing to a rebate fulfillment firm. According to BriteSwitch, the rebate process can take a significant amount of time to complete. To determine rebate availability in your area, contact local utilities and energy-efficiency organizations. To get the most out of local programs, consider enrolling as a trade ally, which may offer market visibility and access to training and other resources.

Be sure to learn the program and its requirements, and keep tabs on changes and current funding levels. In some regions, participation may drain funds early. Note that rebates are not guaranteed or may pay a lower-than-expected amount.

Pre-approval is often required before installation. All forms must be properly completed. Note what products qualify and ensure the exact model is listed. Inspection may be required to verify installation.

Overall, rebates continue to be a strong driver for adoption of energy-efficient lighting and controls in existing buildings in 2024, but there are signs they are transitioning to their next phase of evolution. In the future, rebates may focus more strongly on high-efficiency LED lighting, first-generation to current LED technology (possibly with a focus on wattage savings), lighting redesign and requiring installed LED lighting be either paired with lighting controls or be controls-ready.

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