Understanding New Utility Rebate and Incentive Programs for Energy Efficiency



The first energy-saving incentive programs primarily involved utility companies issuing rebates to plants and facilities that purchased energy-efficient equipment. This incentive style is now mainly referred to as prescriptive measures and is still a vital component of a utility’s portfolio. But today, there’s more of an emphasis on performance or per unit of energy saved.

The shift toward paying-for-performance rather than buying new equipment, combined with building a conducive atmosphere for becoming more energy-efficient, was first conceptualized nearly 20 years ago. However, tracking energy usage was in its infancy and an unreliable source for most incentive programs.

Monitoring energy usage in real-time has become far more reliable with advancements in metering systems. As a result, some PFP energy-saving programs available today require companies to set target deadlines for energy usage and show proof of implementation.

How Utility Programs Are Funded

These programs are not gifts. The ratepayers themselves fund most utility programs. A line item on the electric bill typically funds the local incentive program. And since a consumer has to pay into the program, it behooves them to try to get their money back by applying for incentives.

Consider it a silent hand pushing people to make the right decision for the community in which they live.

Becoming Energy-Efficient First Begins Within a Company

Energy efficiency is a process that requires company focus, and the atmosphere needs to reflect positivity toward the change through promotion and organization. It requires continuous improvement and involvement from the company for implementation to prove successful.

APenergy’s incentives management service can help companies set energy-saving goals to improve performance and track progress through the course of implementation. We use incentive programs as a catalyst to fast-track projects and get companies excited about their projects rather than strictly being a production or ROI evaluation.

Some projects can take years to get approved, engineered, and ultimately implemented. Incentives can generally be an afterthought for companies that focus on accomplishing the goal at hand.

APenergy focuses on being a company representative, maximizing opportunity, and utilizing funds paid into the energy incentive program. But energy-efficiency improvements are for the company’s bottom line. The company has to choose an efficient infrastructure that is more economical in the long run rather than the solution that pays back the quickest.

The Importance of Strategic Energy Management

Putting forth a continuous effort to improve a facility’s energy efficiency is the only way to secure optimal performance. The effort can sometimes feel like a battle, but it is a necessary fight to win.

APenergy has technical experts who can help companies find the right path with strategic energy management by sharing unbiased insights and cost-effective strategies to reduce a company’s energy consumption.

With over 35 years of industry experience, APenergy can help companies implement energy-saving measures without the risk of hindering production uptime or the quality of the products produced. Whatsmore, APenergy’s knowledge of utilizing utility incentive programs can boost a company’s performance and help companies access new technologies supported by utilities – often at zero cost.

Implementing a strategic energy management plan will ensure ongoing improvements by keeping tabs on maintenance and savings while identifying new opportunities for further reduction in energy consumption.

The significant steps in building a solid strategic management plan include developing a policy, setting objectives and targets, evaluating data and results, reviewing the policy’s strengths and weaknesses, and continuing with improvements.

Energy Efficiency Programs Versus New Energy Resources

A utility has to decide how to spend its revenues. New energy resources like nuclear power plants can be great avenues worth exploring, but they are expensive and have long timelines. It is often more economical to encourage companies to pursue energy efficiency programs, as implementation is quicker and requires less investment.

If every company took advantage of the incentives available, not only would their bottom lines improve, but utilities and the environment would also benefit from not having to build yet another natural gas, coal-fired, or nuclear power plant.

Building a new power plant can take up to three years in implementation alone, and nuclear power plants can take even longer. Additionally, the average energy savings from energy efficiency programs are one-third the cost of new energy resources.

Utilities have the problematic task of meeting the electricity demand throughout the territory they manage while remaining profitable, which is why they are eager to issue incentives to companies willing to reduce energy usage.

Figure 24 shows the total opportunity projected in 2025 for industrial subsystems for the territory of ComEd Illinois. The figure suggests that, in energy reduction opportunities, there are roughly 400 gigawatt-hours (GWhs) of available load to shed from the grid – if companies are adequately incentivized to participate.

Understanding the Difference Between Rebates and Incentives

There are nearly a thousand rebate and incentive programs available across the county. APenergy can help personnel navigate the process and find the right programs for their facilities.

Resources with details on utility rebates and incentives available in the United States are easily accessible. The Database of State Incentives for Renewables and Efficiency is a research tool for exploring programs at one’s disposal.

However, DSIRE is a community-driven platform, so the information can tend to be outdated, which is why an industry expert like APenergy is a more efficient source for understanding specific programs.

The terms rebate and incentive can sometimes go without distinction from one another, but knowing the differences in how they are structured is essential.

Rebates from utilities work in the same way as any other rebate. A portion of a company’s investment in new equipment or technology is reimbursed.

Incentives are more like a reward to a company for initiating action that otherwise would have gone ignored. Incentive programs have more oversight by utilities, and if they determine that a company was planning on implementing upgrades before applying, they will not receive any funds.

There are a few different rebates and incentives, including instant (e.g., midstream), prescriptive, and custom.

The instant program simply provides a rebate credit that is applied to invoices from approved distributors.

The prescriptive program is a specific dollar amount given for completing energy-efficient measures. The projects in these programs have predictive outcomes and usually are standard improvements. The following steps include:

● Become pre-approved
● Purchase and install materials
● File final paperwork
● Post-inspection takes place
● Approval is awarded
● Await incentive check

The custom program requires more paperwork, more steps, and proof of success. But it also has a more significant payback. After installing the new equipment, an inspection that measures the reduction of kilowatts of power occurs.

The complexity and varying timelines involved with custom programs lead to most companies allocating money for the project before even commencing.

The drawback to these programs is that the paperwork can become daunting and challenging. Also, confirming the relevance of programs requires industry expertise, and the time involved can strain a company’s schedule and resources.

Contact APenergy Today

APenergy has a deep understanding of leak detection and control. We pride ourselves on the most cost-effective solution for our clients who need trusted experts that can minimize internal facility staff hours.

Our expert team is ready to help companies start saving energy and money today. If interested in our leak detection and control program, contact the APenergy team, the leading energy efficiency consultants, at 740-862-4112 or message us at (https://apenergy.com/contact/).