Rebate Program Funding Being Exhausted Earlier Than Usual


Rebate Program Funding Being Exhausted Earlier Than Usual

As of late Fall, upwards of 30 well-established, well-funded utility rate-payer based rebate programs have exhausted their commercial and industrial-targeted funds for the current program year.  From Michigan to Texas and Nevada to Pennsylvania programs are out of funds already or running low.  This is twice as many as last year and several months earlier than usual.  With funding, according to the Consortium for Energy Efficiency, continuing to increase every year (the total funds budget for 2010 exceeded $7.5B, up 24% from 2009) the question is “why is the money going quicker”?

Fewer funds available?  No.  Fewer programs?  No.

There are several contributing factors: increased participation, improved technologies and better designed programs.

Increased Participation – with energy efficiency awareness at an all-time high, rebates & incentives for energy efficient improvements (for which users largely had a take-it-or-leave-it attitude up until a few years ago) are on almost every property owner’s radar these days.  With energy prices on the rise, addressing energy efficiency and seeking to offset the cost of these improvements with rebates is quickly becoming standard protocol for large corporations, as well as your local corner store.  Simply put, more awareness has more funds being doled out for energy efficient projects.

Improved technologies – With the significant savings attainable with new technologies –LEDs, geothermal, magnetic bearing chillers, etc — it doesn’t take too many projects to absorb huge amounts of money available to be paid out in incentives.  For example, with the introduction (and readily apparent acceptance) of LED lighting into the mainstream more money is being distributed at larger clip due to the enormous energy savings opportunities presented by LED technologies, on a per-project basis.  Increasingly retailers of all sizes, from department stores and specialty retailers to restaurants and coffee shops, are replacing their existing 60-90 watt halogen lamps with low wattage LED lamps, in some instances dropping 70 watts per lamp!  With many rebate programs using “custom” methods of determining energy savings and associated payouts the incentives for LED retrofits can be through the roof — in some cases, covering 100% of the installed project and upwards of $20k – $50k per site or more.

Better designed programs – for most well established large utilities in the U.S. … distributing rebates and incentives for energy efficiency is old hat, and such, improving on past experience is commonplace.  Incentive Program Managers (typically the Utilities) are employing new strategies to expand existing programs and add new ones, enhance advertising and promotions, and conduct innovative pilot projects.  Some are even running fewer, simpler programs that can get the most energy savings as quickly and cost-effectively as possible.  They are educating and aligning themselves with local contractors and implementers, driving energy efficiency investments and energy cost savings to unprecedented levels.

So what does this mean?

Generally, it means paying more attention to incentives if you are not already.  It also means developing an attention towards making “rebate capture” a planned, best practice in your new construction and retrofit efforts:

  1. Property owners should strongly consider scheduling energy-reducing initiatives as early in the calendar year as possible to ensure maximum availability of rebate and incentive offsets.  Although some programs do not follow the calendar year for the opening and closing of their programs, the vast majority do.
  2. Additionally, property owners should seek pre-approvals and reserve funds for planned projects when possible, and well in advance.
  3. Lastly, and of course (and please excuse my shameless promotion), entities with large property portfolios and aggressive energy-reducing plans should consider working with an outsourced 3rd party rebate administrator who has their finger on the pulse on these programs and will understand the status of program funding levels and include them in project scheduling to maximize rebates captured.
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