Incentives to Light Smart: Commercial lighting rebate programs

BriteSwitch
BriteSwitch
Published On
May 14, 2021

The outlook in 2021 for commercial lighting rebates is strong, with three-fourths of the United States covered by a rebate program incentivizing energy-efficient lighting and controls.

In review, rebates are offered by utilities and energy-efficiency organizations to avoid a new, more costly power supply. The most common type is prescriptive, which offers a nominal cash amount per installed qualifying product. Typically, the owner gets a check, though some midstream programs incorporate it into the point of sale. Custom rebates are also available, though they’re more complex.

Depending on the product and program, rebates can cover 10%–70% of the lighting product cost, according to rebate fulfillment firm BriteSwitch, Princeton, N.J. To avoid “free rides,” most rebates are capped per installed product as a percentage of its cost, ensuring the owner pays part of it.

On average, rebates improve lighting upgrade payback by 20%–25%, so including them in lighting upgrade proposals can make a project more attractive and therefore more likely to gain approval.

While availability was essentially unchanged in 2020, rebate processing experienced disruptions and slowdowns due to COVID-19, and inspections shifted to remote or virtual. Weakening demand for rebates led to some programs offering substantial bonuses to incentivize participation.

LED products: The most popular commercial rebates continue to be for replacement lamps and troffers/flat panel, downlight, wall-mount, parking garage, outdoor pole-arm mount and high-bay luminaires.

According to BriteSwitch’s database, average rebates per installed product remained fairly stable across all categories except troffers/linear panels between 2020 and 2021, which is significant because LED rebates traditionally decline annually as product costs fall. This may be due to reduced demand for rebates but is also suggestive of prices leveling out in the market.

A majority of programs require products be listed on DesignLights Consortium’s (DLC) Qualified Products List. In February 2021, any products not listed to version 5.0 of the technical requirements—which increased minimum efficacy and required reporting of dimming capability—were delisted. Version 5.1 expands reporting to include lighting quality attributes while requiring a majority of products be dimmable, and takes effect at the end of the year.

In 2017, DLC launched the DLC Premium classification to identify the most efficacious products. While a few programs promoted them, this number diminished in 2021, possibly due to standard product efficacy improving with DLC version 5.0.

Lighting controls: Popular lighting control rebates, according to BriteSwitch, include remote-mounted, wallbox and luminaire-mounted occupancy sensors; photocells; and daylight dimming systems.

DLC listing is not required for these products; however, DLC began listing networked lighting control systems in response to utilities’ interest. Currently, roughly 100 rebate programs promote networked controls as they continue to experiment with approaches. Most require DLC listing, and a majority offer a per-luminaire adder—most commonly for troffers and high- and low-bays—if the luminaires are connected to a networked lighting control system.

Administration: The rebate process requires administrative resources or outsourcing to a rebate fulfillment firm, which can take five months, according to BriteSwitch.

To get the most out of rebates, learn the program and its requirements, and keep tabs on changes and funding levels. Preapproval is often required before installation. All forms must be properly completed. In some regions, participation may drain funds early. If DLC or Energy Star listing is required, ensure the exact model number for a selected product is listed. Inspection may be required to verify installation. Be careful about subtracting the rebate amount from the invoice, as rebates are not guaranteed or may pay less than expected.

To determine rebate availability in your area, contact local utilities and energy-efficiency organizations, or visit dsireusa.org, which maintains a U.S. database of energy-efficiency incentives.

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