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BriteSwitch’s Leendert Jan Enthoven Talks Lighting Rebate Trends

For a feature to be published in Electrical Contractor’s April issue, I recently had the opportunity to interview Leendert Jan Enthoven, President, BriteSwitch, a rebate fulfillment firm, whose North American rebate database provided a look at some interesting trends in commercial lighting rebates. 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: 2023 brought something we don’t usually see to the commercial lighting rebate arena: stability. Looking at all the programs across the country and what’s happening, except for a few things, it’s mostly fairly similar to 2022. That’s good news for distributors and contractors; the dollar amounts for all lighting and controls are still fairly high and the funding is stable.

Geographically, commercial lighting rebates remain relatively strong across the US. Over 78% of the country currently has an active commercial lighting rebate available. Like in the past, these programs are still strongest in the North East and North West while areas like Ohio, Kansas, and North Dakota don’t have any energy efficiency programs for lighting.

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

Enthoven: Rebates for general service lamps, like A19s and PARs, see the biggest change in 2023. This is because of Phase 2 of the Energy Independence and Security Act (EISA) which will go into full effect in July this year. This legislation will increase the minimum efficacy requirements of many medium-base lamps, basically taking inefficient lamps off the market. As a response to this, we see two big changes. In the first half of this year, rebate programs are pushing hard to get projects completed, with many offering bonuses or increased incentives. In fact, the average rebate for a screw-in lamp increased 71% to $7.66 per lamp. The second change is that many programs announced they will be discontinuing rebates for these types of lamps starting in July.

The rebate amounts for LED lighting mostly stayed the same between 2022 and 2023. It’s the third such year that they’ve stayed flat, which is remarkable because prior to that, the incentives were usually dropping 10-20% each year. Utilities still need people to do lighting upgrades to save energy, and with increasing material and labor costs, they must match the rebate dollar amounts to the costs of the projects in order to get them done.

The rebate programs themselves also seem to be more stable. Years ago, we constantly saw programs running out of funding mid-year or reducing dollar amounts suddenly to meet budget restrictions. In the last year though, fewer programs have run out of funding, so the programs felt more stable than in the past. That’s good, because it helps distributors and contractors use them as real sales tools without worrying too much about a rebate program changing overnight.

The programs are also getting a lot harder to participate in. In an effort to save costs, many program implementers are turning to online portals and tools to move the bulk of the technical work to the applicant. These portals are often slow and poorly designed. What used to be as easy as filling in a PDF or Excel-spreadsheet is now a whole online process. Typically, a simple pre-approval application went from taking 5 minutes to fill out to at least over 20 minutes per location. At the same time, these rebate programs cut their staff, meaning if you need assistance with the portal or have questions since their rules are ambiguous, you usually have to wait for a week or so to get a response.

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

Enthoven: Over the past 14 years that we’ve been monitoring the lighting control rebate programs, incentives for these products have always been stable and that’s again the case for 2023.

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: We’ve really seen a lot of interest in EV charging rebates from our distributor and contractor partners since many of them are looking to get into this new and rapidly expanding market. Rebates play a huge part in this segment since the cost of installing EV chargers can be considerable and therefore the rebates are often very lucrative.

EV charging rebates work very differently from lighting rebates. The reason behind his makes sense; lighting upgrades, and other equipment like HVAC and VFDs, are meant to save energy, so they usually fall under similar energy efficiency programs. EV chargers, though, actually increase the electric energy usage. Because of that, the incentive programs are designed differently than their energy efficiency counterparts. They’re run by different organizations, have different rules, staff to deal with, and completely other types of guidelines.

As we all know, most lighting rebates can be attributed to the local electric utilities. For EV chargers however, the rebates can come from many different sources: municipalities, electric utility companies, regional/county governments, and state and federal governments. It makes it a lot more cumbersome to find all these different EV charging rebates. And in some cases, these different rebates can even be stacked.

Because the EV charger rebate programs are often completely new, they still have a lot of growing pains. They usually didn’t learn from the energy efficiency programs that have been running for decades and instead tried to re-create the wheel, leading to a sometimes really cumbersome application process.

DiLouie: What generally is available, and what are opportunities for an integrated systems approach to upgrading?

Enthoven: EV charger rebates can either cover a portion of the cost of the equipment itself, the equipment and labor cost combined, or the make-ready cost. Right now, 53% of the US has a rebate for home/residential applications and 65% for commercial/public/fleet use. The dollar amounts are relatively high though compared to energy efficiency incentives. The average rebate across the US is $521 for a residential charger, $3,157 for a level 2 commercial charger and $27,751 for a DCFC level 3 fast charging station.

Because EV charger rebate programs are completely separate from energy efficiency programs, there’s usually not an integrated approach for lighting and EV charger projects.

We have seen contractors use interest in EV chargers as a foot in the door for other projects. For example, if a contractor is quoting several charging stations in a parking garage, they may also pitch a lighting upgrade of the garage at the same time which would provide better light levels, improved safety for people charging, and energy savings. While both measures would likely have rebates, they would have to file separate rebate applications.

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

Enthoven: Last year, networked lighting control rebates saw a considerable increase with 16% more utilities offering new rebate programs. At that time, we thought that might signal a stronger market for NLC rebates in 2023, but it largely remains flat this year. That’s not necessarily a bad thing, as a majority of the programs still provide an incentive for NLC, but it doesn’t seem to be as “hot” as many manufacturers and other vendors were hoping for.

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

Enthoven: The structure of networked lighting control rebates still varies a lot across the country which makes them often difficult to understand.

For example, SMECO in Maryland has four categories of rebates depending on the wattage of the fixture connected to it and if the system has a local/cloud server or is server-less. Xcel Energy in Colorado has a much simpler rebate structure which is just $0.40 per watt controlled. The program in Connecticut on the other hand, is a set rebate per type of fixture connected to a NLC system so $70 for a 2×4, and $210 for a high bay fixture.

DiLouie: Looking at rebates for other energy-saving technologies such as HVAC/hot water systems, what generally is available, and what are opportunities for an integrated systems approach to upgrading?

Enthoven: For a majority of energy efficiency programs, lighting is the biggest part of their rebate program budget, in many cases accounting for over 80% of the program’s funding. Programs will typically also incentivize HVAC, VFD, hot water systems, and other energy efficiency technologies, but the rebates aren’t as strong there as we’ve seen for lighting over the years and it doesn’t improve the payback period as much for those technologies.

There are a few programs that offer additional incentives for taking an integrated systems approach and upgrading several technologies all at once, but they are much more rare than stand-alone incentives. Typically, these are called performance based or custom rebates which look at the overall energy savings, either versus the existing technologies or the local electrical code. They’re usually relatively complex and ask for detailed engineering calculations and measurement and verification studies.

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

Enthoven: Based on the past few years of data, we see rebates for energy efficiency staying relatively stable. While certain lighting technologies and products might fall off a rebate list, like A19s, new products like networked lighting controls can replace them. For EV charging stations, we believe the number of rebate programs will continue to expand fairly rapidly in the near future.

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

Enthoven: It’s funny, in discussions with contractors, manufacturers, and distributors, so many people are under the impression that lighting rebates are not around anymore. Thankfully, their demise has been greatly exaggerated. The rebate programs are still out there and they’re still strong. While the programs may be more complicated to participate in, these rebates are still a powerful tool in selling lighting and controls. The potential rebates should be included on all quotes.


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