Rebates from utilities and energy-efficiency organizations remain an enduring and widely available incentive for building owners to adopt energy-efficient lighting and other advanced building technologies. According to rebate fulfillment firm BriteSwitch, Kingston, N.J., which shared topline numbers from its annual rebate database, an active commercial lighting rebate is available in over 78% of the country in 2023.

For utilities, incentivizing their customers to reduce energy consumption can be cheaper than building new power plants, while providing a beneficial service. For lighting practitioners, rebates sweeten customer interest in lighting and other building system upgrades by reducing initial cost.

This article provides a snapshot of the 2023 commercial lighting rebate offering, with a close look at trends and guidance about how to access rebate funds.

Rebate types

Energy-efficiency rebates are available for building technologies ranging from lighting to variable-frequency drives. In recent years, governments and utilities have also begun offering big rebates for electric vehicle (EV) charging stations in an effort to electrify transportation. While lucrative on their own, they offer electrical contractors a strong foot in the door to reduce energy consumption in concert with adding EV chargers and new electrical capacity. Lighting remains the biggest opportunity, however, constituting a significant share of rebate resources.

While varying in approach, commercial lighting rebates are generally available as one of three types.

The most common is the prescriptive or downstream rebate, which awards a cash amount per qualifying energy-efficient product installed in an approved project. The process is fairly straightforward, though it may involve pre-approval, inspection and an upfront investment. As prescriptive rebates are most popular, this article will focus on this type of rebate.

Far less common and typically focused on very common lamps and sometimes very common luminaires, the point-of-sale or midstream rebate is realized at the point of sale, resulting in an instant, relatively low-risk rebate.

Finally, a custom rebate may be available for innovative projects that go beyond the scope of prescriptive rebates, typically earned as dollars per kilowatt-hours ($/kWh) in energy savings, or as based on some other metric. Although relatively complex, this type of rebate can potentially offer significant payouts.

Trends in lighting and control rebates

Commercial lighting rebates kept pace with the LED revolution such that it is now the main technology promoted by prescriptive rebate programs. This is arguably positive, as LED offers significant energy savings and additional benefits and capability such as greater controllability, color tuning and more. As a result, today’s prescriptive lighting rebates cover a wide range of popular applications and LED product types, as shown in Figure 1 and Figure 2.

Average LED rebates have stabilized. LED lamp and luminaire rebates were once quite high, but have declined over the years—in some years as much as 10%–20%—to keep apace with falling costs, according to the BriteSwitch North American rebate database. LED rebates have largely stabilized over the past three years. In 2023, average rebates generally increased modestly, possibly to address inflation.

“Utilities still need people to do lighting upgrades,” said Leendert Jan Enthoven, founder and president of BriteSwitch, “and with increasing material and labor costs, they must match the rebate dollar amounts to the costs of the projects to get them done.”

Lamp rebates may be in a final push. The Energy Independence and Security Act and subsequent Department of Energy ruling on the law’s energy-efficiency backstop means many traditional general-service lamps will be removed from the market starting in July 2023.

In response, BriteSwitch is reporting that many rebate programs are pushing to complete projects, resulting in a significant increase in the average rebate for LED replacement lamps. Additionally, however, many programs announced they will be discontinuing rebates for these types of lamps starting in the second half of the year.

Horticultural lighting rebates are increasingly available. In 2022, rebates for energy-efficient horticultural lighting surged, with the number of rebates tripling over the previous year, according to BriteSwitch. In 2023, this number bumped up to 677 programs. Relatively speaking, these rebates are fairly high, and many programs switched from custom to prescriptive, with this greater standardization making them easier to estimate and apply for. Sixty percent of horticultural lighting rebates are currently prescriptive, with an average rebate of $110 per luminaire.

Lighting control rebates continue to be strong and stable. Rebates for lighting controls continue to be widely available and consistent, according to the BriteSwitch database, making them an attractive upfront add-on to a lighting upgrade. Popular rebates include remote-mounted, wallbox and luminaire-mounted occupancy sensors; photocells; and daylight dimming systems, which are otherwise staples in many new buildings (see Figure 3).

A majority of LED products are inherently controllable, so additional energy savings can be derived from reducing instead of switching loads. Wireless communication and control integration within luminaires can facilitate installation in existing buildings.

“In most parts of the country, if they offer a rebate for lighting, controls are also included,” Enthoven said. “The average dollar amount per control is still relatively high compared to the cost. These factors often make it a no-brainer to add controls onto a lighting retrofit project.”

Network lighting control rebates continue to grow and mature. Networked lighting controls are intelligent systems in which devices enact control strategies by communicating within a network. The technology has advanced to make them far more accessible in existing buildings, offering sophisticated lighting control that delivers energy savings in addition to capabilities such as measuring and monitoring. In a study by the DesignLights Consortium (DLC), Medford, Mass., these systems generated an average 47% energy savings across more than 100 monitored applications, demonstrating the kind of deep, untapped energy savings that warrant rebate support.

In the past, rebate programs incentivized networked lighting controls as part of their custom rebate option, but several years ago programs began introducing prescriptive rebates around this category, coinciding with a new DLC Qualified Products List for Networked Lighting Controls. By 2022, these rebates grew to more than one-fourth of prescriptive lighting rebate programs. In 2023, the number of programs again increased, with 16% more utilities offering prescriptive rebates, according to BriteSwitch. Approaches vary by program, with a majority offering a rebate adder for installing LED lighting with networked controls, resulting in an average rebate of about $200 per installed and controlled luminaire.

Rebate programs are automating, making them more difficult. A significant number of programs have begun to move much of the rebate acquisition process online and cut staff to reduce costs, making the process more cumbersome, according to BriteSwitch.

“These portals are often slow and poorly designed,” said Enthoven. “What used to be an easy task [of] filling in a PDF or Excel spreadsheet is now a whole online process.”

Rebate programs have become more stable. In the past, commercial lighting rebate programs often ran out of funding or announced reduced rebate amounts during the year. According to BriteSwitch, over the past year, fewer programs ran out of funding, resulting in more stability.

“That’s good,” Enthoven said, “because it helps distributors and contractors use them as real sales tools without worrying too much about a rebate program changing overnight.”

Getting the rebate

Prescriptive rebates represent money on the table that can help make lighting and control upgrades more attractive to customers, but they require work. The project team’s administrative resources can do this, or it can be outsourced to a rebate fulfillment company.

If going it alone, here are several tips:

Learn about availability. Contact local utilities, energy-efficiency organizations and manufacturers to identify rebate availability.

Learn the program. Rebate programs aren’t standardized, so the particular program’s approval requirements, product qualifications, inspections and more should be researched and understood.

Manage risk. Gain pre-approval if required by the program. Stay on top of requirements and available funding during the year. Note whether the program has a “reservation of funds” policy, which sets aside money for approved projects working their way through the process. Complete and accurate paperwork ensures the rebate moves through the process as quickly as possible.

Choose qualified products. A majority of rebate programs require installation of energy-efficient products that are qualified as being eligible for rebate. Typically, these qualifications are third-party, such as through Energy Star (lamps) and the DLC’s Qualified Products Lists (solid-state lamps/retrofit kits/luminaires, horticultural lighting and networked lighting controls). Each product has a unique identifier in the Qualified Products List to facilitate verification of its listing. Note that standard lighting controls such as occupancy sensors generally do not require qualification.

Accept that inspection may be required. The rebate program may require on-site inspection—or, as became common during the pandemic, virtual inspection. It may also require some documentation detailing the installation as well as measuring and monitoring to document actual energy savings.

Payment may take time. Note that a period of weeks or even months may pass before all administrative processing is complete and the rebate program issues a check. Contact the program for details.

Make rebates work for you

Commercial lighting rebates have stood as a strong incentive to invest in energy-efficient lighting and controls for decades. In 2023, rebates are widely available, robust and more inclusive of emerging categories such as horticultural lighting and networked lighting controls. Alongside these programs, parallel rebate programs are developing around EV charging, ready to be tied together into a cohesive effort to both electrify buildings and maximize their efficiency.

“The rebate programs are still out there, and they’re still strong,” Enthoven said. “While they may be more complicated to participate in, these rebates are still a powerful tool in selling lighting and controls. The potential rebates should be included in all quotes.”

SHUTTERSTOCK / STUDIOSTOKS