Originally published in TED Magazine, April 2012.

More than $5 billion in commercial lighting rebates are offered in nearly eighty percent of the United States, according to Leendert Jan Enthoven, president of Briteswitch, LLC, a firm that locates, optimizes and does all the paperwork to obtain rebates, incentives and grants for commercial end-users. In 2012, more than 800 LED product rebates programs are being offered, a 39 percent increase over June 2011.

In 2010, U.S. electric incentive program budgets were $5.4 billion, up from $4.4 billion in 2009, according to the Consortium for Energy Efficiency. Budgets for 2011 have not been formally assessed yet, but were expected to increase over 2010.

“While overall program budgets are up, last year we saw an unprecedented number of rebate and incentive programs exhaust their available funds before the year ended,” says Enthoven. “Some of these organizations ran out of money more than six months before the deadline. Increased program utilization due to lamp regulations contributed to these program funds being depleted so quickly. With customers scrambling to upgrade their lighting before new legislation takes effect later this year, funds are going to be even more likely to run out of money in 2012.”

LED products qualify for more than 800 rebate and incentive programs, with a greater portion of prescriptive rebates for specific types of products. For example, 286 programs incentivize LED replacement lamps, with an average rebate of $12/lamp, and 342 incentivize LED downlight fixtures, with an average rebate of $21/downlight, according to the Briteswitch database (see the Table for the most popular product rebates). More than 60 percent of LED replacement lamp rebates require ENERGY STAR certification, and 20 percent or programs incentivizing LED fixtures require Design Lights Consortium approval and listing in the Qualified Products List.

“The most common LED lighting product rebate among all the incentive programs is the LED downlight fixture,” says Enthoven. “This popularity is due to the fact that ENERGY STAR qualifications for this type of fixture were available much sooner than other LED technologies, which prompted earlier adoption by programs. LED replacement lamps, accent lighting and parking garage fixtures are also rapidly gaining acceptance in prescriptive incentive programs.”

He adds that the most popular LED lighting product in the past year has been the replacement lamp, with rebates ranging from $2 to $50/lamp. “The price and performance of these lamps have now gotten to the point where they are receiving acceptance in the marketplace and when rebates are factored in, allow for an attractive payback period for many customers,” he points out.

Interestingly, the average rebate per LED product is declining. For example, the average rebate for LED replacement lamps declined by 18 percent since June 2011, while the incentive for LED recessed downlights declined by 11 percent. These reductions are mostly due to the cost of LEDs coming down in the past year, which means less incentive money is needed to make these solutions financially attractive, says Enthoven.

“The rebate process can be very tricky and time consuming for many distributors,” he adds. “The best recommendation is to understand their local programs as best as possible. Often, utilities or other rebate providers will have seminars to train local reps about the program requirements and how they work. While these sessions help distributors on a regional basis, it becomes impossible when working on national projects dealing with hundreds of programs, and that’s when distributors usually turn to us for help.”

Table. LED rebate and incentive programs in 2012. Source: Briteswitch, LLC.

Type of LED Product

Number of Prescriptive Rebate Programs

Average Rebate/Product

Replacement Lamps

286

$12.00

Downlight Fixtures

342

$21.00

Accent Lighting (Track Head) Fixtures

73

$55.00

High-Bay Fixtures

118

$95.50