Utility Rebates

This week on the Bright Ideas series by Acuity Brands®, Will Walker of Encentiv Energy joined us to discuss the role of utility rebates in the lighting industry.

Encentiv Energy exists to simplify the world of utility rebates, using their proprietary platform called Encentivizer®. Will described it as “the Google of utility rebate programs,” as it aggregates over 3,000 utility programs; their requirements; their energy calculations; and all of the products that qualify for rebates – from the ENERGY STAR® product list to the DesignLights Consortium® (DLC).

HOW DID REBATE PROGRAMS START, AND WHAT IS THEIR GOAL?

If utilities are in the business of selling energy, why would they pay people to use less energy? The idea seems counterintuitive on the surface– but there are two primary reasons why power companies offer utility rebates, Will explained.

The first reason, put simply, is to build a relationship with clientele and provide value to them.

Getting utilities shut off – especially without warning – can be a miserable experience. The average American uses electricity almost constantly. Getting a monthly power bill isn’t always thrilling, but people understand the importance of paying for what they use. 

Utility rebates provide a way to support customers who want to upgrade their lighting or HVAC systems to something more efficient. Rebates help offset the financial cost of such projects and encourage users who might be interested in improvements.

Secondly, Will pointed out that the main reason why utility companies offer rebates is because these companies are facing an aging infrastructure.

The transmission and distribution lines in most areas are several decades old – and that’s a problem. Every day, the world’s population is using more electricity.

Modern houses are brimming with laptops, televisions, phones, and home assistants – to say nothing of lighting or climate control, or the countless other electronic devices that might be present, especially if there are kids in the family.

In response to this, utility companies could charge rate-payers more money so the industry can get an upgrade or build additional power plants. But both of these expenditures are measured in the millions to billions of dollars. It’s far more affordable for everybody if the utilities offer a rebate to customers that use less energy in order to lower the grid demand.

If people use a little less energy, power companies won’t have to invest in capital improvement projects, and monthly rates won’t go up.

BIG TRENDS IN THE UTILITY REBATE MARKET

With the rising tide of technological advancements throughout the world, change is everywhere and demand is only increasing. Currently one of the biggest emphases in the utility market is controls– specifically, network lighting controls.

In short, utility companies are trying to find ways to simplify the application process for complex lighting systems to increase the rebates and make them more accessible to customers.

There’s so much emphasis on this idea that thought-leading organizations within the efficiency space, namely the Northwest Energy Efficiency Alliance and the DesignLights Consortium, are investing time and resources to quantify the true energy savings of these systems.

Their analysis shows that there’s a 45% decrease in LED usage when a network lighting control system is installed. That’s almost half of the original amount! Going from HID to LED already means a big drop in power costs – but now that lower amount of energy can be reduced even further.

HOW TO STAY UPDATED ON THE CHANGING REBATE PROGRAMS

Trying to stay ahead of the curve in utility rebates seems exhausting and complex for building managers or homeowners. A single utility program is already fairly complex, but it may be layered and integrated with multiple other programs both nearby and across the country – all with their own sets of rules.

Sometimes customers attempt to monitor available rebate programs with a homemade spreadsheet. However, Will cautioned us that the moment any of the listed programs change, their data will no longer be accurate– and that outdated information can wreak havoc on any major projects a user may have planned for in the thousands or millions of dollars.

Frankly, it’s just exceptionally difficult to keep up with and aggregate such an enormous amount of ever-changing data. In fact, it’s really a full time job – in this case, a job Encentiv can do easily.

Encentiv maintains a team of developers and analysts that can keep up with utility rebates and can keep tabs on each new development. The company aims to be a one-stop shop for any building owners who might be looking for utility rebates to apply to upcoming projects.

Encentiv also works with utilities companies directly to help streamline the experience: whether it’s improving the application process, improving how the rebate information is cascaded, or improving how they calculate energy savings. As a result, they’re able to simplify all of these complex programs into one simple solution for customers to use.

HOW DO UTILITY REBATES BENEFIT ELECTRICAL DISTRIBUTORS?

For most of the history of rebate programs, applications have been printed on paper for customers to manually fill out. But around 2009, utilities pivoted and considered offering a discount at the point of sale. Residential customers, for example, might walk into a home improvement store and see a discount right on a price tag.

Eventually, this streamlining practice infiltrated commercial lighting as well. Now over 30 midstream lighting programs offer discounts to customers right away, and distributors are now able to leverage these rebates where it matters: at the decision-making point.

This benefit reaps big rewards for distributors that can really wrap their arms around it. One of Will’s favorite case studies is about a distributor in Colorado who launched the program, and realigned their business model so that they could focus on the product categories offered through that instant program. As a result, those product categories saw a 3,000% increase in sales year over year!

Granted, not every distributor can make such a major improvement right off the bat. Generally the larger distributors in North America seem to struggle with midstream programs, because they’re so spread out. With locations all across the country, the nuances to the programs and the silos within their own organizations make it a very complex process to integrate.

Even so, Encentiv Energy and Acuity Brands do have a compilation of growing resources to help create far more transactional ease for everybody involved in that process. There’s an Encentivizer widget on the Acuity website; ROI calculators; lookup tools; and more recently, ecommerce and ERP integrations to really simplify rebates for larger organizations and make the integration an integral part of their business operations.

To try out the Encentivizer tool for yourself, visit acuitybrands.com/resources/retrofit-and-renovation/energy-efficient-products on the Acuity website. For more information about rebates and financial discounts, stay tuned. Next week, Bright Ideas will go over the details of a new tax benefit for building owners renovating their properties. Find out how you or your customers could take advantage of the savings and benefits today– and why it’s important to do so before these benefits expire.

 

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