Contractor’s Corner: Rebates

By Stan Walercyzk

Greetings, contractors, to the second installment of Contractor’s Corner. This article will focus on distributors helping you with energy efficient products, which qualify for rebates. Distributors who do this can make your life easier and improve your bottom line, as well as theirs.

Although many contractors try to stay on top of rebates, others do not.

Rebates can often cover 20% – 50% of the product cost, which can make many projects much more attractive to customers.

Contractors can be so busy with getting jobs, ordering materials, scheduling, managing work, billing, etc., that there is often not enough time to insure that products are energy efficient and qualify for rebates.

Sometimes it is the utility that provides rebates, and sometimes it is a third party.

There are typically three types of rebates. One is called prescriptive, which is a fixed dollar amount per product. The other is called customized, which is usually based on the KWH saved over the first years, and sometimes there is an adder for peak load reduction. Prescriptive rebates are usually easier to do. There are also upstream rebates that go to qualified distributors, so they can provide lower prices to you. These usually have the least paperwork for you.

Some rebate programs allow the contractor to get the rebate, and if they get it, they lower the price to the end-customer accordingly. But it is important to know that rebates may be considered taxable income.

Too often, energy efficient projects are completed and paid for, and then the end-customer or contractor find out that they will not get a rebate, because the products did not qualify or that paperwork was not submitted and approved early enough. Nobody is happy.

Although the rest of this column focuses on lighting, it also applies to other technologies.

Many organizations only rebate high performance fluorescent T8 lamps and electronic ballasts, which are approved by the Consortium of Energy Efficiency (CEE). Generic T8 lamps and ballasts do not qualify, so distributors should stock the approved ones. Also, some fixture manufacturers typically use generic ballasts and sometimes install generic lamps at the factory, which do not qualify for rebates. So distributors should stock or have short lead times on T8 fixtures, which qualify for rebates.

For LED products, go for Energy Star for screw-ins and residential grade fixtures, and DesignLights Consortium (DLC) for commercial grade fixtures.

CEE, Energy Star and/or DLC may require improved performance as products get better, so current listings should be checked.

A well-informed distributor can really help a contractor if it is better going with LED or a high performance incumbent technology. For example, unless DLC improves its requirements, it mandates that LED troffers or hard-wired troffer kits need to provide at least 3000 out of fixture lumens. But often that is overkill, so it is often best to go with a lower wattage high performance fluorescent solution, which costs less.

Some organizations will not rebate some LED products, even if they are approved by DLC. An example is LED T8s. (In general, there are much better solutions than LED T8s.)

Organizations periodically change their rebate programs. For example, on May 1st of this year the California investor owned utilities changed its customized rebates on lighting from $.05/KWH saved over the first year up to $.08 for LED and advanced controls, and down to $.03 for everything else. At $.03 it is often not worth dealing with a rebate process. Rebate programs in other states may do something similar.

Rebate programs often have ending dates, when projects need to be completed and paid for.

We would love to hear specific stories from contractors, including non-lighting related ones. Please email me at stan@lightingwizards.com.

Stan Walerczyk, LC, CLEP, HCLC