Rebates and incentives offered by electric utilities and regional energy-efficiency organizations are currently enjoying a major upswing, providing a significant resource that can reduce the cost of investing in energy-efficient lighting.

Rebates are offered as part of least-cost resource planning. To put it simply, it is more cost-effective for utilities to subsidize reductions in energy consumption than to build new capacity to generate energy. As lighting accounts for about one-third of electric energy consumption in commercial buildings, it is prominently featured in these programs.

According to the Consortium for Energy Efficiency (CEE), energy-efficiency rebate and incentive programs reached $6.8 billion in 2011, up 26 percent from 2010 ($5.4 billion) and 55 percent from 2009 ($4.4 billion). Utilities and other organizations now offer programs covering approximately 80 percent of the United States.

A variety of energy-efficient lighting solutions is available for new construction and/or retrofit, including fluorescent T12 to T8 upgrades, probe-start to pulse-start and ceramic pulse-start metal halide upgrades, light-emitting diode (LED) replacement lamps and lighting fixtures, and automatic lighting controls. The rebate may be product-based (per product for installing a certain equipment type), based on load or energy reductions (per kilowatt or kilowatt-hour) or, in the case of controls, also based on the size of the controlled load (per watt of the connected lighting system). The table to the right shows average product-based rebates available for energy-efficient lighting upgrades in 2012.

This support can improve the payback period for energy-efficient lighting by an average of 20 to 25 percent, according to BriteSwitch LLC, Princeton, N.J., a company that identifies, optimizes and facilitates rebates, incentives and grants for commercial end-users.

Leendert Jan Enthoven, president of BriteSwitch, said there are five major trends in lighting rebates.

LED products on the rise: Just a few years ago, rebate programs focused on LED exit signs. More recently, custom rebates became available. Today, more than 800 prescriptive rebates are available for LED replacement lamps and complete fixtures. However, the dollar amount per rebate is decreasing on average  due to falling costs for this technology.

Lighting controls on the rise: The number of rebate programs for lighting controls has almost tripled since 2009, although the average rebate per control has remained consistent.

Certification: A growing number of rebate programs recognize only approved products that achieve certain performance criteria specified by organizations and programs such as the CEE, Energy Star or Design Light Consortium’s Qualified Products List. Lighting controls are a notable exception; rebate programs rarely state performance criteria or provide specifications required for a control device or system.

T12 to T8 rebates are in decline: Energy regulations have eliminated a majority of fluorescent magnetic T12 ballasts and linear 4- and 8-foot T12 lamps from the market. As distributor and owner inventories become exhausted, owners will be forced to upgrade to higher efficiency options, such as T8. As a result, T12 to T8 rebates are already beginning to dry up.

Annual funding is being tapped faster: While overall program funding levels are at an all-time high, strong participation in some regions is draining funds earlier in the year. It pays to check with the utility that funding is sufficient to ensure promised rebates will be delivered.

Enthoven said contractors should take some time to get to know their local programs before offering solutions to their customers. One good resource is www.dsireusa.org, a website offering links to utility rebates and incentives across the country. Programs have very specific requirements related to product eligibility, project size, utility ratepayer classification and even special licensing. Contractors should also learn the rebate process; many programs require preapproval, which can take five to six weeks on average and can delay a rebate check up to 70 delays after project completion.

“Rebates provide a powerful way to show your expertise in the field while helping reduce the price for your customer,” Enthoven said. “By showing your knowledge of the local rebate programs and calculating the potential money your customer can get, you can easily set yourself apart from the competition.”

DILOUIE, L.C., a lighting industry journalist, analyst and marketing consultant, is principal of ZING Communications. He can be reached at www.zinginc.com.