Over the past few months, rebate organizations across the country have been busy updating their programs for 2020. BriteSwitch, a firm specializing in capturing local, utility, state, and federal rebates and incentives for businesses, shares some of the trends it has observed for 2020.
LED Rebate Amounts Decrease by 12%
Historically, prescriptive rebates for LED products drop by around 10% on average each year. In 2019, however, the first average increase of rebates was seen. Unfortunately, the upward swing has not continued in 2020, which has so far seen a 12% decrease in the rebate amounts across all LED categories. Looking at the data, BriteSwitch observed a significant difference in the rebate trends for retrofit lamps versus fixtures.
Replacement screw-in lamps (A-shape, PAR, etc.) experienced the largest drop, 27% in the last year. Linear tubes saw a decrease of 13%, which is the lowest decrease they've seen since tubes came on the market.
LED fixtures saw a significant increase in rebate amounts in 2019, but in 2020 they mostly leveled out. On average, rebate amounts for LED fixtures were only down 5% over the past year. Since the rebates for fixtures can be relatively high, make sure to pay attention to any cost caps that may apply.
76% of the U.S. Offers Commercial Lighting Rebates
The percentage of the United States that is covered by an active commercial lighting rebate is constantly changing based on rebate funding levels and programs being discontinued or added. Over the past 11 years, that percentage has ranged from a low of 68% to a high of 81%.
Currently, 76% of the nation is covered by an active commercial lighting rebate program, up from the 73% at the beginning of 2019. Still, there are some large pockets in Alabama, Kansas, West Virginia, and North Dakota that do not have commercial lighting rebate programs.
Rebate Pre-Approval Times Are Improving
Rebate pre-approval is required in a majority of prescriptive and custom rebate programs across North America. During the pre-approval process, programs review the application, verify whether the products are eligible, schedule inspections, and reserve the funding.
Since thousands of rebate applications are filed each year, BriteSwitch keeps track of how long pre-approval takes for projects. Historically, the pre-approval process typically took 29 days on average. Over the past two years, though, that time has decreased to just 18 days. That improvement could be due to a variety of reasons, such as increased use of electronic applications (versus paper), streamlined processes, and fewer applications for the utility to process.
Even though the average pre-approval time is only 18 days, some projects can still take months to obtain pre-approval. Therefore, make sure you allocate yourself enough time to secure pre-approval before any work is scheduled to start.
Anticipating the Change to DLC 5.0
The Design Lights Consortium (DLC) recently finalized the DLC 5.0 and 5.1 technical requirements. These policies address topics like increased efficiency of products, controllability of most LEDs, and improved light quality. Current products that meet all the requirements will be automatically updated to 5.0 at the end of March. On December 31, all products that do not meet 5.0 requirements will be delisted.
What does that mean for rebates? A majority of lighting rebates require an active DLC listing in order to receive an incentive. At this time, no rebate program has officially announced a plan regarding the move to 5.0. Since most 2020 programs are already in place and DLC 4.4 products will still be listed for the remainder of the year, you should not have a problem getting rebates for those products this year.
The real problem may happen in 2021, however. Because the 4.4 products will be delisted as of 2021, any project that goes into next year may be an issue. Since 5.0 has additional dimming and efficacy requirements, some existing stock may no longer qualify. If you’re planning a long-term project or a retrofit that will cross over the calendar year, make sure you either use a product that will meet the 5.0 requirement or finish the project before the end of this year.
Randy Young is the operations manager at BriteSwitch, a company that specializes in finding and capturing rebates for businesses. He can be reached at [email protected].
About the Author
Randy Young
Director of Marketing and Data Solutions
Randy Young is the director of marketing and data solutions at BriteSwitch, a company that specializes in finding and capturing rebates for businesses. He can be reached at [email protected].