4 steps for getting the most out of utility rebates and incentives

4 steps for getting the most out of utility rebates and incentives

As the demand for energy is rising at record rates, billions of dollars in incentives are being allocated at the federal, state and local level across the U.S. to spur energy efficiency programs. For businesses, this means that there is a wealth of money available for them to tap into to help fund their energy reduction initiatives and offset the cost of energy efficient capital investments.

Though businesses have plenty of program opportunities available to them, there are several challenges that you and your company will face. There are multiple program providers who each have different standards, timelines and requirements. To complicate things even more, these programs are constantly changing. Just keeping up with what opportunities are currently available can be overwhelming, especially for multi-site operators.

To help overcome these challenges, there are four steps that must be followed to ensure your company is getting the most value and return out of these rebate and incentive opportunities.

Step 1: Do your homework

With 48 states providing one or more energy efficiency program for businesses, there are many incentives and rebates that are offered through these programs for measures such as changing out inefficient HVAC equipment, switching to LED or CFL lighting, implementing energy management systems, installing ENERGY STAR products, water management, improving building envelopes (cool roofs, window film, insulation) and installing renewable energy such as solar panels. However, all of these incentives vary by state, industry and product.

Before getting started, conduct research on the different rebate and incentive opportunities that are available to you. The ENERGY STAR® website offers an extensive database of equipment and appliances that have been approved by the government to meet energy efficiency standards, and the ACEEE website lets you look at energy incentive opportunities by state.

Step 2: Establish a strategy

Once you determine the rebate and incentive opportunities that are available to you, it's important to develop a strategy. Like any business plan, you need a strategy to ensure that you're aligning your resources to reach your target ROI on incentives and rebates.

When developing your rebate incentive strategy, ask yourself the following questions:

  • For the activities that I want to pursue in the coming period, what does my capital budget look like?
  • How much will these rebates and incentives offset the initial cost?
  • Which facilities and technologies will get me the biggest return on investment?
  • What are the time limits for implementing these initiatives?
  • What are the rebate and incentive deadlines and what is the application process?
  • What is the measurement and verification process?
  • Do I have the appropriate paperwork? Am I required to conduct a pre-audit?
  • What are the risks and ramifications for getting less than predicted?
     

Next page:  Avoid this common mistake

A common mistake that companies make when evaluating the ROI for these initiatives is that they do not take into account the cost of inspections, metering, internal resources needed or additional work that may be required. Once you add in these costs to your final calculation, you may find that other projects offer a better ROI.

Step 3: Manage the progress

The next step is to create an essential flow of information that makes it easy to evaluate and prioritize all the incentives and opportunities. When prioritizing the best opportunities, be sure to consider all of the stakeholders that will be involved with the project – from the contractors to your internal team to even the equipment suppliers.

Step 4: Submit and file

Submitting and filing the paperwork is an important part of the process that is often overlooked. Many companies miss out on opportunities because they do not correctly complete the form or follow the required steps in the process. To avoid these pitfalls, designate someone to manage the rebate approval process and double-check all the paperwork. This person can be responsible for answering additional questions that may arise from the rebate approval process and help account for any pre-audits that may be required as part of the rebates.

For companies with a wide-spread portfolio across multiple sites, you may consider partnering with a third-party service provider, which can help manage this entire process (our company, Ecova, is one such provider) – including researching available rebate and incentive opportunities, helping determine the best opportunities to pursue, documenting the process to demonstrate and prove ROI, and executing all of the efficiency projects and upgrades.

As companies look to decrease their environmental footprint, keep in mind that there are resources available to help. With sky-high energy demand, aging infrastructure and increasingly limited resources, utilities want you to participate in these rebate and incentive programs. In many cases, the money is being funded by the utility bills you are currently paying. In the long run, it pays off to ensure you are getting the most out of these programs.

Picture of money falling from the sky provided by Jean Lee via Shutterstock.