Can you get a rebate for your lighting project? How much can I get? Who gets to make the decision? Is is the same across the USA? All good questions, and here is some information we think will help.
Tell me the basics about rebates...
Simply stated, the utility company you buy power from makes the decision on whether you can get a rebate or not. It's not just for lighting. Utility companies may offer rebates to homeowners to upgrade their water heater, or to replace an old refrigerator with an Energy Star rated product. However, for the purpose of this discussion, we will focus exclusively on lighting rebates.
The US Small Business Administration says, “Depending on the type of business you operate, lighting accounts for 20% to 50% of electricity consumption
. This means that lighting represents a significant cost for most business owners. However, it is one of the best returns on your investment when you convert over to energy efficient lighting, like LED. Payback can be under 1 year given the proper operating parameters (contact us, we will help you calculate rebate). And we all heard the easy marketing catch phrases, "Low Hanging Fruit" and "No Brainer". But it truly is. And rebates only sweeten the deal.
Why would a utility company offer a rebate?
Utility companies have capacity to produce electricity. When they max out, they have 2 options: reduce consumption or produce more electricity. The latter requires a significant investment on their part. Reducing consumption, therefore, can make better economic sense to them. So to incentivize their customers, they offer them rebates to install more efficient product that lowers consumption. LED Lights, for example, can reduce consumption by as much as 80-90% (with controls) per fixture. Multiply that in the millions of bulbs in their customer base, and they have effectively staved off the need to build more power plants.
What products qualify for rebates?
Typically, utility companies offer rebates for Energy Star and DesignLights Consortium Listed products. These products have been certified energy efficient by governing bodies. Energy Star is set up to offer home owners energy efficient products. In terms of lighting, this typically means small household bulbs, usually A19 replacements. DesignLights Consortium is set up for industrial and commercial LED Lights. To qualify, products need to be designed to DLC standards, submitted and tested. And only once it passes the test will a product become DLC listed.
How do I get a rebate?
The first step before starting any project is to contact your utility company, or contact us at MyLEDLightingGuide.com, and determine if there is a rebate, and what the steps are to get the rebate. It is important to do this before you start, as some utility companies may require a pre-work audit. If the work has started, then you may not be eligible for rebates. Secondly, the utility company will tell you what types of rebates, if any, are available. Some of the rebates are based on a pool of money. If the money runs out, rebates may not be available until the next rebate period kicks in. Sometimes the utility companies will also rebate the labor required to do the retrofit or installation.
Incentives are typically based on watts saved. This is calculated by the amount of energy you are currently using - the amount of watts consumed by the new LED product. You should also ask if they include ballast draw in their calculation. It may add to another 15% in savings.
There are typically 2 kinds of rebates: Prescriptive and Custom.
- Prescriptive Rebate amounts are based on pre-determined scenarios that are the most common replacement scenarios. For example, replacing a 4 tube fluorescent fixture with a LED fixture of X watts.
- Custom Rebates are rebates that are not part of the Prescriptive options and are typically calculated as an energy savings calculation. There is typically more work to do to get a custom rebate, but sometimes they are also more lucrative.