Last year was an incredibly tough time for many industries, except for maybe hand sanitizer and toilet paper. Commercial lighting was no different. As electrical utilities struggled to hit their energy savings goals, a record number of bonus rebates — 20% of the active programs in 2020 — offered a bonus. Like previous times of economic turmoil, such as the financial crisis of 2008, rebates increased to spur participation.

Because of this, 2021 is shaping up to be a solid year for commercial lighting rebates, according to BriteSwitch, a firm specializing in capturing local, utility, state, and federal rebates and incentives for businesses. The company shares some of the biggest trends it has observed for 2021.

Currently, 74% of the U.S. offers a commercial rebate.

As the adoption of LED lighting increases, will lighting rebates continue? In some form or another, lighting rebates have been around since the 1980s and will likely continue for the future. Even with the increased prevalence of LED technology, tons of older lighting technologies, like T12s and metal-halide, are still being used in the United States. Therefore, lighting rebates are still going strong in 2021.

Currently, 74% of the United States is covered by an active commercial lighting rebate program. This percentage is lower than normally seen at the beginning of the year (typically 76% to 78%), but it still means most businesses in the country have a rebate available to them. The most significant change in 2021 occurred in Ohio, where the major utilities discontinued their rebate programs at the end of 2020.

Rebate amounts for LEDs stay flat … and that is remarkable.

For the first time in years, the average prescriptive rebate for LED products did not decline year-over-year, according to RebatePro. Historically, the rebate amounts for LEDs have fallen between 10% and 20% every year, so staying flat is a huge improvement. See the average rebates for the major LED categories in the table below. 

Rebates for LED tubes remain at an average of $4 for a 4-ft. tube. There was a slight decline of rebates for replacement lamps (A19, PAR, BR), but it was relatively minor, with a difference of just $0.25 between this year and last year.

For the most part, LED fixture rebates are on par with the levels seen last year. The only exception to this trend is troffer rebates, which unexpectedly dropped 43% versus the previous year. Now troffers and retrofit kits have the same rebate amount. It is not clear why troffer rebates changed, but we don't expect to see such a significant decrease repeat itself next year. Since the rebates for fixtures can be relatively high, pay attention to any cost caps that may apply.

Rebates for lighting controls have been remarkably stable over the years, especially when compared to LEDs. In fact, if you look at the rebates over the last 10 years for all controls, there has been no change in the average amounts across all categories.

Networked lighting control (NLC) rebates were expected to grow, but the 2021 offerings are surprisingly very similar to 2020. Only three new programs added further incentives for NLCs; the average amounts are consistent with last year.

However, 35% of all rebate programs specifically mention NLCs in their paperwork, and many other utilities will consider these types of projects under custom. That means if you have a project with NLCs, it will most likely qualify for rebates. Nonetheless, it is still hard to quickly target areas with the best rebate programs for NLCs.

Be aware of DesignLight Consortium (DLC) changes.

In 2020, the DLC issued new technical specifications under version 5.0, which improved upon the specs of v4.4. The DLC originally slated the v5.0 transition for Dec. 31, 2020, but they pushed it back until Feb. 28 due to COVID-19. Most rebates — between 60% and 85%, depending on the category — require DLC listing to get an incentive, so this certification is essential.

If a program requires DLC certification and a product is not on the DLC website when the application is reviewed, it will not receive a rebate. Although many rebate programs may have offered a grace period during DLC transitions in the past, no program has implemented such a policy so far this year.

DLC v5.1 will get into effect early next year, and that will add new requirements for controllability in many types of fixtures. It is too early to tell how it will impact control requirements in rebate programs, but it is not expected to make a significant impact until 2022.

Longer pre-approval and check processing times.

A majority of prescriptive and custom rebate programs require pre-approval. In response to COVID-19 and many people learning how to work from home, the amount of time to receive pre-approval and to receive checks both became longer in 2020.

On average, it took 22% longer to get pre-approval (now 22 days) and 40% longer to get the rebate check (38 days) based on company data from thousands of rebate applications filed each year. Note that this trend is expected to continue in 2021, so make sure you give yourself enough time for pre-approval before the project begins.

Rebates may be the key to success in 2021.

With tighter budgets and more conservative spending, rebates are as important as ever to getting lighting projects done in 2021. If you are working on any project this year, make sure you know if there are rebates available and what may be required. These rebates and incentives are a smart way to do more with less money and should always be leveraged.

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].