• Hetal Parekh

Green Incentives 101: Utility Rebates


how does an energy efficiency rebate impact my project
Green incentives 101: Utility Rebates

What is an energy efficiency rebate?


An 'energy efficiency rebate' or 'energy rebate' or 'utility rebate' is a financial incentive program offered by utility companies to its customers for installing new energy efficient equipment in their buildings. These equipment saves energy and money for the end customers and helps the utility companies reduce their demand side energy consumption.


Many electric utility companies offer significant rebates to install energy efficient equipment that reduce the energy consumption of the property – such as switching to LED lights, installing new HVAC equipment, thermostats and other sensors and controls, energy star rated commercial equipment for refrigeration and hot water among others.



How does an energy efficiency rebate impact my project?


There are multiple considerations relating to the first bottom-line that a property owner should take into account while making an energy efficiency investment. When an energy rebate is added into the financing strategy, it improves the project profitability and ROI and reduces the payback period.


Visibility: Rebate programs can usually be accessed through the website of your utility provider with links to pages with additional details, in-depth information, and a technical chart of the eligible upgrade measures to avail the rebate.


Qualification: Qualifying energy conservation measures (ECM) and the associated rebate amount vary by utility company. Further, these programs are also periodically updated, which can significantly affect the total rebate incentive. EnerYields' database provides you the most up-to-date information and our experts can maximize the rebate by making sure all equipment and design are aligned with the rebate program.


Application process: Energy rebate application process is a relatively simple and straight-forward compared to other green incentives. For initial review and pre-qualification, you are required to upload an online form with supporting documents (varies by utility company), receipt and proof of energy savings. Upon review, the program administrator reserves the funds and post-completion, the rebate is processed upon verification of technical documentation.


Approval period: Subject to pre-qualification, most utility companies release the rebate checks within a period of 90 days from the time of installation.


Impact on upfront cost: Rebates are processed as refunds as opposed to an upfront payment, upon submitting the bills for the upgrade expense. Since the owner is responsible for the day-1 out of pocket expense for purchase and installation, a rebate does not lower your upfront capital expense for the project.


Impact on end of year-1 savings: Rebates are processed only upon installation, and it covers only portion of the equipment purchase cost. EnerYields experts can help you identify the maximum refund for your project. At end of year one, a part of the qualifying purchase is refunded thus improving the savings and ROI.


Impact on payback period: An energy rebate partially covers the initial investment into your project, significantly improving the time taken to break even on these energy upgrades.


If you are a commercial property owner looking to maximize the profit and minimize the initial investment of your green project, start your financing search with EnerYields.



Note: This blogpost borrows from the founder's PhD research. Full dissertation can be found here.