I can’t tell you the number of times I have approached building owners or managers with great opportunities to upgrade energy systems (lights, HVAC, etc.) saving money right away and paying back the investment in a short time, and the first question I’m asked is “Are there any rebates?”. When I tell a client there are none for that or it is paltry, the building owner/manager actually ignores the many other benefits and is reluctant to do the project. If the payback of an upgrade is under 3 years and the ROI of investment is double digit percent growth per year anyway, why should a rebate “make or break” a project? I guess some people really enjoy “free money”, of part of the cost being paid by a government or utility. While a client and the engineer should look for all available applicable rebates, it is unreasonable to actually squelch a project due to its absence.

So that you understand why rebates may or may not be available in your area, here is some background. It is certainly contrary to business sense for a utility to pay a building to install and utilize technology that will cause it to use less energy (natural gas or electricity). Utilities offer rebates for either of two reasons. One is they are forced to by the state’s government or watchdog agency. These elected officials or people beholden to them know that being able to say that they saved a certain amount of a resource or utilized it more efficiently is what people want and a good thing for a politician to boast. A second reason is that the more energy a region uses, the greater the infrastructure costs are for the utility. In even modest utility districts, utilities are forced to spend billions of dollars in capital costs to upgrade, expand, or replace existing infrastructure (utility lines, gas lines, etc.). And, of course, to ensure they are up-to-date and safe. If infrastructure fails, and a power blackout results or a gas line explodes, the negative headlines, the anger of residents and businesses, and being hauled into legislative hearings over the failure, is something to avoid at nearly all costs. Therefore, the less energy used, the less that infrastructure needs to be upgraded and at a lower cost.

Therefore, it is important to do research on rebates. The availability and amount for different programs vary between utilities. In general, most rebates are universal for a utility. A rebate for LED lights resulting in decreased electric usage is valid throughout a utility’s district. However, some utilities designate some rebates as greater in different areas within the district. For example, in New York City, Con Edison’s Demand Response Program encouraging building owners to use their own generators and be off the grid during peak demand periods, has greater rebate payments for buildings located in a certain area which has seen the greatest growth in electrical demand (gentrification) and weakest infrastructure. And lower incentives everywhere else, including zones where infrastructure is fine. So look carefully at the conditions of a rebate.

Part of your research should also be on timing. Utilities and the commissions that oversee them often decide annually on rebates. They decide if they are effective or not, look at market conditions, and then adjust for the next year. A rebate at a certain level this year may go down (or up) next year or be eliminated altogether. For example, some utilities are reducing or eliminating LED lighting rebates. The price of LEDs has droped recently, plus it is more accepted. Many feel an incentive is no longer needed; savings and payback are sufficient without it. Your engineer (including this one!) should keep up with the latest trends and talk to those managing rebates.

I should add that I have seen the opposite reaction (occasionally) of building owners and managers feeling almost guilty about receiving a rebate for an upgrade. Nobody should feel this way. Most rebates come from charges that are in your monthly utility bill. You pay into a fund used for rebates. Therefore, when you do an upgrade, you are simply taking back the money that you have put in!

In summary, research or have your engineer research and go forward with any energy rebates that an upgrade qualifies for. However, don’t be hung-up on it. If a rebate (or tax deduction or other financial benefit) does not exist or is only worth a small percentage of the upfront cost, let it not stop you from doing the project. The vast majority of energy upgrade projects are very financially beneficial for building owners for a long-period of time even without utility or government rebates.

CCES has the experts and experience to help you get the maximum financial benefits from an energy upgrade, including being up to date on potential rebates and to get you through the application process. Contact us today at 914-584-6720 or at karell@CCESworld.com.