(Issue: August 2019)

Midstream Rebates Grow

By Craig DiLouie, CLCP, LC

With strong advantages for all stakeholders, midstream rebates are expected to grow. For lighting management companies, they simplify recommending and purchasing energy-efficient lighting for retrofit projects.

Rebates endure as an incentive to reduce lighting energy consumption, but they continue to evolve. A significant emerging trend is midstream or instant rebates, which can simplify rebate administration for lighting management companies and their customers, thereby facilitating adoption of energy-efficient lighting.

The most common type of rebate is the downstream rebate, in which the utility pays the rebate directly to the purchaser. This typically involves a long process involving qualification, approval and payment. With a midstream rebate, the rebate is administered by the distributor, which is then paid by the utility. 

For lighting management companies, this means being able to buy energy-efficient lighting products at a lower cost due to a built-in instant rebate.

Midstream rebates are available for both residential and commercial lighting. The first programs promoted replacement lamps, though luminaires such as LED indoor luminaires, downlight retrofits, wall packs, and exit signs are now being included.

These rebates are currently relatively rare, available only in about 10 percent of rebate territories. According to BriteSwitch, they currently account for less than five percent of replacement lamp and two percent of luminaire rebates.

They are expected to grow, however, based on their popularity and cost-effectiveness. Examples of providers include Baltimore Gas & Electric, Entergy Texas, Mass Save, PG&E, and Southern California Edison.

While midstream rebates are simpler for lighting management companies, they will have to get to know the program’s requirements and then take time to follow it.

To participate in a program, a lighting management company must confirm a program is in place in the project’s geography, find a participating distributor, and learn what products are covered in a list of eligible SKUs. Typically, the rebate covers certain general categories (i.e., lamps, luminaires, controls), specific subcategories (e.g., indoor luminaires), and then qualifies these subcategories according to listing in the DesignLights Consortium’s Qualified Products List or ENERGY STAR.

Note the rebate program may cover some equipment types but not others, meaning some equipment in a given project may receive an instant rebate, while the rest will have to apply for a traditional downstream rebate. Also note some programs cover other energy-efficient building equipment such as motors.

For an upgrade project, the buyer typically must be a customer of the utility giving the rebate. Often, the customer is required to pay a minimum amount per product to show commitment. Most programs require the customer receive the full rebate from the distributor. If a contractor is the buyer, some programs require the full savings be passed on to the end-user.

The buyer should ensure not only that the product qualifies but that the rebate will be available at the time of purchase, as offerings and availability can change at the rebate program’s discretion. The program may require the lighting be installed within a certain time frame after purchase (e.g., 30–60 days), and may request inspection to make sure the lighting was installed.

Additionally, the lighting management company may be required to provide information about the end-user, as the distributor typically must provide information about contractors and end-users to the rebate program each month.

With strong advantages for all stakeholders, midstream rebates are expected to grow. For lighting management companies, they simplify recommending and purchasing energy-efficient lighting for retrofit projects.

 
Craig DiLouie, CLCP, LC, principal of ZING Communications, Inc., is a consultant, analyst and reporter specializing in the lighting and electrical industries, and a regular contributor to LM&M. You may contact Craig at cdilouie@zinginc.com.