The 2025 commercial lighting rebate outlook is strong for electrical contractors engaged in the lighting upgrade market. Prescriptive rebate programs are starting to react to LED saturation in their territories by offering bonuses, promoting lighting controls alongside LED rebates and requiring controls to gain an LED rebate to achieve their energy savings targets.

Utilities and energy-efficiency organizations reward installation of energy-efficient lighting in existing buildings because it reduces demand for electric power, which is generally more cost-effective than building new supply. By reducing initial cost, the investment becomes more attractive to the owner. While midstream prescriptive (instant) and custom rebates are available, the most popular type is the downstream prescriptive rebate, where the owner is paid upon approval and installation. Contractors bringing rebate dollars to the table can be more competitive at winning upgrade projects.

What’s the deal with rebates?

The most popular LED rebates cover replacement lamps, troffers/flat panel, downlight, wall-mount, parking garage, outdoor pole-arm mount, retrofit kits and high-bay luminaires. Horticultural lighting rebates are also widely available. 

According to rebate fulfillment firm BriteSwitch, Kingston, N.J., average rebates for LED luminaires increased by 3% for 2025. In states starting to implement their compact and linear fluorescent bans, there is an opportunity to use rebates to entice customers to convert now through retrofit.

As for lighting controls, the most popular rebates cover remote-mounted, wallbox and luminaire-mounted occupancy sensors; photocells; and daylight dimming systems. Networked lighting control (NLC) rebates continue to gain traction as 474 programs now offer rebates, typically as an adder to LED luminaires if they are controlled by an NLC system.

For decades, lighting provided a high-volume, low-cost source of energy savings for program administrators, but it is diminishing with LED market saturation. In 2020, the Department of Energy estimated LED penetration in the commercial sector to be at a rough parity with traditional sources. A later 2024 DNV study estimated LED adoption at 60% in the linear market, placing LED adoption in the late majority phase. There is still a substantial opportunity, though more challenging to convert.

As a result, some rebate programs are feeling the pinch on achieving their energy-savings goals and responding in various ways. These measures include rebate bonuses that range from 10% to 100%, some available at the start of the year; rewriting rules to allow rebates for LED-to-LED upgrades; promoting lighting controls and LED products in rebate catalogs; and requiring installation of lighting-control-ready luminaires to earn an LED rebate. These measures are expected to strengthen as rebate programs evolve to save energy while accommodating market changes, potentially expanding to include redesign and more advanced lighting controls.

To determine rebate availability in your area, contact local utilities and energy-efficiency organizations. To get the most out of programs, consider enrolling as a Trade Ally, which may offer market visibility, training and other resources; in some cases, this is required.

The rebate process takes time and requires administrative resources, even if the program offers an online process. 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 begins. Note which products qualify and ensure the exact model is listed. On-site or virtual inspection may be required to verify installation.

Rebates continue to offer strong incentives for owners to invest in energy-efficient lighting and controls in existing buildings.

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