Making Utility Rebates And Incentives Work

May 29th, 2012 | Posted in Blog, Informational | 1 Comment »

Guest Blogger, Christopher Morales via Facilities Net

In these difficult economic times, as the nation still seems be recovering from recession, there is a scarcity of one resource essential to implementing any recommended energy-saving measures: money. Without access to sufficient funding, maintenance and engineering managers and their organizations cannot implement energy-saving measures.

Depending on a facility’s geographical location, the strategic goals of local utility service providers, and local or state energy-efficiency regulations, incentive programs might be available that can help buy down the cost for implementing qualifying energy-saving measures.

For organizations to receive incentives or rebates, managers should be aware of current program trends, understand the common roadblocks in qualifying for these incentives, and understand strategies for implementing energy-saving measures that qualify for rebates or incentives.

Setting the Stage

It is probably not news that the United States and other industrialized nations are competing with growing markets in China and India for energy resources. As these markets continue to grow and build, the availability of certain fuel sources used by power-generation companies to supply utilities and end-users with electricity is starting to inflate electricity costs.

As a result, many state public-utility commissions and local municipal governments are beginning to impose more stringent energy-conservation requirements on the electric utility-service providers, which in turn is driving utilities to offer incentive and rebate programs to institutional and commercial facilities. There are greater opportunities for managers to seek out programs to help reduce implementation costs and improve project cost-effectiveness.

Although utility incentive and rebate programs can help buy down costs for implementing qualifying energy-saving measures, misunderstanding or unfamiliarity with the way the utility incentive and rebate programs work might adversely affect any given project’s cost-effectiveness. Such misunderstandings and unfamiliarity can create roadblocks in the process for receiving incentives or rebates, the most common of which include the following:

Failure to engage. The manager does not engage their utility service provider early in the process. It seems managers are not always aware of local utility incentive and rebate programs. When managers discover them — more often than not, through their contractors — they contact their local electric utility service provider, only to find out they are already too late in the process to qualify. In some cases, although the intent of the measure might qualify for an incentive or rebate, the actual equipment installed disqualified them from receiving rebates because it did not meet the minimum efficiency requirements of the program.

Lack of familiarity. Contractors and service providers are not familiar with the program requirements. As a consequence, either through specifying disqualified equipment or being unable to provide sufficient documentation, the implemented measure no longer qualifies for an incentive or rebate.

Falling short. The final incentive or rebate amount is less than the anticipated or estimated amount. Managers can become frustrated because they perceive the incentive or rebate program process as being slow and cumbersome. As a consequence, they might try to apply pressure to their installing contractors to get their work done faster.

This push can create a breeding ground for mistakes, either through failing to install equipment correctly or losing the required documentation in the shuffle. As a result, several things can happen. The installing contractor might have to correct these errors in the warranty period. The organization fails to realize energy savings. The measure might no longer qualify for an incentive or rebate. Or the incentive or rebate amount is less than anticipated.

Spotlight On Strategies

By understanding the way utility incentive and rebate programs work, and armed with the right strategies, managers can successfully implement qualifying measures for rebates and incentives to achieve savings. Key strategies include:

Finding the right one. Engage the appropriate utility incentive or rebate program before the project begins. Managers should contact their local utility service provider account representative before the project begins and contractors and service providers have been selected. In fact, managers should take this step before issuing any requests for proposals for consulting services and installing contractors.

Account representatives can guide managers to the appropriate incentive or rebate programs and help initiate any pre-approval application process the program might be require. The account representative also should be able to connect the manager with the program manager for the appropriate incentive or rebate program.

Hiring smart. Managers must be sure to select qualified service providers and installing contractors to perform the work when appropriate. Many utility incentive and rebate programs have a network of qualified service providers or trade allies. These partners and allies have gone through program orientation and training and have demonstrated their capability to comply with the requirements of the programs to which they are a partner.

Managers should work with the utility incentive or rebate program manager to select a partner or ally to provide consultation services — such as commissioning, energy auditing, or design services — and installation services, such as mechanical or electrical contractors. Selecting a partner or ally can help speed the process of going through the utility incentive or rebate program and help the organization achieve the maximum possible incentive or rebate.

Asking questions. Managers should not hesitate to ask questions of the utility incentive or rebate program manager to better understand the program’s process, requirements and timeline. Before beginning the process, managers must be sure to get satisfactory answers to the following questions:

  • What is the process to go through to receive the maximum possible incentive or rebate through the program?
  • How long does the process take?
  • What measures qualify for incentives through the program?
  • How do we start the process?
  • What information do I need to provide to the program?
  • What will be required of me throughout the process?
  • How much will I be involved?
  • Can you help me select a service provider to perform commissioning, energy auditing, or design, if needed?
  • Can you help me identify and select an installation contractor to implement the qualifying measures, if needed?

Managers should not hesitate to ask questions during the process, either. The utility incentive or rebate program manager is there to answer questions that might arise. By asking questions, the program manager will see the organization’s interest in meeting their requirements.

Engaging the utility incentive or rebate program before the project begins, using qualified service providers, and asking questions to the program manager, will lead to managers and their organizations having a better probability of receiving the maximum possible utility incentive or rebate for implementing qualifying measures.

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