Midstream Rebates

Lightbulb with a slot in it like a piggybank with a coin resting in the slot.

Rebates continue to be a popular incentive for lighting upgrades. These cash awards from a utility or energy-efficient organizations reward installation of energy-efficient lighting. Rebates drive demand for energy-efficient lighting by reducing initial cost. They also influence product development, as manufacturers must comply with certain requirements to be listed as eligible for many rebate programs.

In 2018, LED rebates began to level out after years of declining amounts in line with declining product costs. According to BriteSwitch, an environmental consultant, LED rebates are increasing, with the majority of growth stemming from higher LED luminaire rebates. Meanwhile, a number of utilities have begun offering rebates for networked lighting controls, with the majority offering an amount per luminaire connected to the control system.

Another emerging trend is midstream rebates. Typically, rebates are paid by the utility directly to the purchaser (downstream), with a lengthy process of qualification, approval and payment. With a midstream or instant rebate, the customer receives the benefit directly from a distributor. In a typical program, at the end of the month, the distributor reports sales to the rebate provider and receives its own payment.

For the electrical contractor, allying with a distributor participating in a midstream rebate program means being able to purchase or recommend energy-efficient lighting at a resulting cost discounted by a built-in rebate. Reducing the initial cost and administrative burden of applying for rebates and waiting for approval and payment can facilitate end-user approval of energy-efficient lighting upgrades.

According to Lee Levitt, national utility manager, at Current, powered by GE in Boston, midstream rebates are available promoting residential and commercial lighting. While early programs favored replacement lamps, they are beginning to incorporate luminaires such as LED indoor luminaires, downlight retrofits, wall packs and exit signs. Currently, they are available in about 10% of the rebate territories, with notable program providers such as PG&E, Southern California Edison, Baltimore Gas & Electric, Mass Save and Entergy Texas. According to BriteSwitch, these programs currently represent less than 5% of replacement lamp and 2% of luminaire rebates. However, due to their benefits to the rebate provider (lower costs), distributor (potential for greater sales and profitability), and contractor and end-user (quick rebate and reduced administration), midstream strategies are expected to grow in popularity among rebate programs.

Rich Rattray, commercial engineer, LEDvance, Wilmington, Mass., pointed to the Mass Save Bright Opportunities Program as an effective midstream lighting rebate program. The program covers a range of LED lamps, luminaires and controls. Updates are clearly communicated to stakeholders. And periodically, incentives may be increased for specific products for a limited time.

Despite the relative degree of simplicity for the contractor, some navigation is required. There must be a program in place in the given geography, the purchaser typically must be a customer of the offering utility and the preferred distributor must be a program participant. While program requirements vary, often the customer must pay a minimum amount for each product as a commitment to the project. The majority of programs require that the customer receive the full rebate, and if the contractor is the purchaser, some require that the full savings be passed on to the end-user. The products to are prequalified by the rebate program and offered by the distributor as a list of eligible SKUs, which typically requires the products be listed on the DesignLights Consortium’s Qualified Products List (www.DesignLights.org) or ENERGY STAR (www.EnergyStar.gov). Some midstream rebate programs also may cover HVAC equipment, energy-efficient motors and adjustable-frequency drives.

Because a midstream rebate program may cover some categories of equipment while offering downstream/prescriptive rebates for other categories, the purchaser needs to distinguish among them and act appropriately. During planning, the purchaser will need to confirm product qualification and that the rebates will be available at the time of purchase, as offerings and availability are subject to change at utility discretion.

Another requirement affecting ECs is sharing of customer information. Typically, the distributor must provide contractor and end-user information to the rebate program each month and will require this information from the EC. The program may require that purchased equipment be installed within a certain timeframe, such as 30–60 days. The utility may request an inspection to confirm purchased equipment was installed.

Due to the advantages for stakeholders involved in buying energy-efficient lighting, midstream rebates are expected to grow in popularity. For ECs, they offer a simplified method of purchasing and recommending premium energy-efficient lighting products for upgrade projects.

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