I recently had the opportunity to interview Leendert Jan Enthoven, President, BriteSwitch, LLC, a rebate fulfillment firm, on the topic of 2022 commercial lighting rebates and rebate trends. This interview was conducted to inform articles for the May issue of ELECTRICAL CONTRACTOR and the March feature for the Lighting Controls Association, where average rebate dollars for popular lighting and control rebates will be published. Transcript follows.

DiLouie: How would you characterize the current commercial prescriptive lighting rebate opportunity in the United States? What is the current overall level and trend in funding?

Enthoven: 2022 has proven to be another strong year for commercial lighting rebates. Currently, 77% of the US has a rebate for commercial lighting or controls. That’s up from 74% we saw last year and close to the highest we have on record, 79% in 2017. While most of the country has incentives available, there still are some notable hold-outs like Alaska, Kansas, North Dakota, Ohio, and West Virginia.

DiLouie: How did the pandemic affect rebate availability in 2021, and what impact will this have on 2022? Are things back to “normal”?

Enthoven: The pandemic didn’t affect the availability of rebates in 2021. Most programs continued as expected throughout the year.

As an effect of the pandemic, we noticed that rebate amounts increased throughout 2021. Towards the end of the year, programs either increased their incentives or offered limited-time bonus programs that provided temporary increases of anywhere from 10% to 100%. In Q4 of last year, we saw that roughly 20% of the rebate programs in the US were offering some kind of bonus to try to spur participation.

DiLouie: What are the top 3-5 trends in lighting rebates and what impact are they having on demand for energy-efficient lighting?

Enthoven: Overall, the rebate amounts for LED solutions stayed relatively flat for 2022. That’s a big change from the past. Historically, LED rebate amounts have dropped 10 – 20% each year. Last year was the first year they stayed flat, and this year continues that trend. The price increases seen across the industry, as well as lack of active projects, are probably the reasons behind this change.

2022 has also proven a strong year for rebates for horticulture lighting. The number of rebates for horticulture lighting has tripled over the last year. The rebate amounts for horticulture lighting have always been relatively high, but the new programs have brought the average amount down by roughly 25%. Still, even with that decrease, it’s the product category with one of the highest rebate amounts at an average of $102 per fixture. We also noticed that in 2022, a lot of the horticulture rebates have switched from custom to prescriptive, making them easier to estimate and file for.

We saw that incentive amounts varied a lot throughout the year last year. For most programs, a rebate amount will be set at the beginning of the year and remain consistent. Last year, adjustments were going on through the year. Most of this was to adjust the levels to take advantage of the available program budgets. This means distributors and contractors have to stay on top of the programs and changes that might be occurring.

DiLouie: What are the top 3-5 trends in lighting control rebates and what impact are they having on demand for lighting controls?

Enthoven: Lighting controls rebate amounts continue to remain consistent. Over the past 14 years, we’ve noticed incredible stability in the rebates for this category.

The number of utilities offering rebates for Networked Lighting Controls (NLC) increased by 16% in 2022. In most cases, if there is a lighting rebate available, NLC will also receive an incentive. These rebates are usually on top of, and not replacing, the rebates for standard lighting controls.

DiLouie: What role do electric vehicles and electric-vehicle charging stations play in rebates now? How do they work, and what are opportunities for electrical contractors and distributors in this category?

Enthoven: EV charging equipment, also called EVSE, is a growing opportunity for electrical contractors and distributors. It’s a relatively new segment with tremendous growth potential in the next few years. We’ve seen rebates, incentives, and grants for EV chargers skyrocket over the past year. These rebates significantly reduce the cost of installing EV chargers, but they may present a challenge. Rebates for EV chargers are much different from rebates for energy-efficient products like lighting or HVAC. While they both provide incentives, they’re more like a distant cousin than a sibling. They come from different organizations, run on different timelines, and are often structured differently. It takes a significant amount of time to fully understand them for even a seasoned rebate veteran.

One of the biggest differences between traditional lighting rebates and EVSE rebates is the sources of funding. For lighting, the rebates are typically through the utility. For EV charging stations, it can come from a variety of sources like the utility, state, county, municipality, or others. Sometimes several programs can even overlap, and you have to select which is the best for each individual project. We’ve been tracking energy efficiency rebates for 14 years, and there were so many differences with EV charging rebates that we had to develop a whole new database to capture and identify all the rebates correctly.

That being said, there’s a tremendous opportunity out there as the electrical charging infrastructure grows in North America. The number of rebates for Level 3, or DC fast-changing, EV charging stations increased by over 20% just in the past three months.

DiLouie: How would you characterize growth in lighting control rebates? Where do you see this trend headed in the future?

Enthoven: Over the past 14 years, lighting control rebates have always been remarkably stable, with dollar amounts and rebate availability being relatively consistent between the years. Most rebate programs in North America offer an incentive for control solutions, but they’re often tucked away in the back pages of a rebate catalog and not highly emphasized. It’s a shame, because the average rebate amounts for controls are relatively high compared to the cost, making them a relatively inexpensive upsell to most lighting retrofit projects.

DiLouie: How would you characterize growth in networked lighting control rebates?

Enthoven: The number of utilities incentivizing networked lighting controls increased by 16% in the past year. The rebate amount itself didn’t change much. Most rebate programs seem excited by the opportunity that NLC presents, but the consensus is that the growth of these systems is slower than expected. One of the biggest challenges seems to be educating the marketplace on how to market and sell these solutions effectively.

DiLouie: What are the most popular models for networked lighting control rebates?

Enthoven: Most of the rebates for NLC are on a “per fixture installed” basis. Filing for incentives for NLC can be tricky. Just one project can have a combination of standard control rebates, standard lighting rebates, and NLC rebates.

DiLouie: What do electrical contractors need to know about helping their customers gain rebates?

Enthoven: The two biggest issues that contractors working on rebates run into are pre-approval and product selection.

A majority of rebate programs require pre-approval before installation. The amount of time pre-approval takes varies depending on the rebate program, but the average is 3 – 4 weeks across North America. Contractors must make sure to allow themselves time to get pre-approval before a project is slated to begin. It’s better to start on the paperwork as early as possible to make sure rebates don’t delay the project.

Product selection is also critical when it comes to rebates. Many programs have strict requirements for what type of lighting is installed. The most common requirements are that the LED is EnergyStar or Design Lights Consortium listed, with over 3/4 of programs requiring certification to receive incentives. Contractors must make sure the product they’re using is currently on the DLC or EnergyStar website; a logo on a spec sheet is not sufficient proof. It’s even more important this year, as DLC will transition from version 5.0 to 5.1 later this year.

DiLouie: Where do you see rebates going in the future?

Enthoven: If price increases, material scarcity, and inflation keep on track, I think commercial lighting rebates will remain stable, if not increase, in the future. For lighting upgrades, the early adopters and the low-hanging-fruit opportunities have already made the switch, and now it’s a matter of convincing the hold-outs, which may need more financial incentives to make the switch.

DiLouie: If you could tell all lighting professionals only one thing about lighting and control rebates, what would it be?

Enthoven: If you do not include rebates on all of your quotes, you’re missing out on a huge opportunity. The rebates allow you to lower the perceived price to your customers without impacting your margin. They also show your customers the value and expertise you add. Rebate paperwork can be a cumbersome burden, but don’t let that stop you. Having a dedicated person at your company to handle rebates, or outsourcing to a third-party rebate processor, can reduce the hassle.