What are LED Lighting Rebates?

To put it simply, a rebate is an incentive, in the form of money, provided by a utility company to purchase and install new energy-efficient products to replace legacy equipments that are not energy conscious. One might wonder as to why utility companies would want to do so. Well, its a win-win for both the utility companies and users. While the users are benefitted by reduced upgrade costs, the utility companies get to reduce overall kWh consumption and demand on the existing grids.

Rebates are an effective way to see the return on investment for your new LED lighting system in a few years.

Of the 2,500 utility companies in the United States, 800 of them offer some form of a rebate for LED lighting projects and it is important to understand that rebate programs are managed on the state and municipal levels and vary across the country.

What are the benefits of Rebates?

Lighting rebates can be a boon when you decide to go ahead with an LED retrofit or conversion project. You are probably aware of the pros of upgrading to LED lighting- low energy costs, reduced maintenance and a great leap towards reducing carbon footprint. But, apart from these benefits, switching to LEDs can bring in savings, essentially giving a leg up in ROI. While the idea of LED Lighting Rebates might seem far-fetched, but they bolster the benefits of LED lighting solutions. With their short-term benefits, rebates make investing in LEDs much easier.

What do you require to avail these Rebates?

In the States, energy-efficient products including LED Lights are eligible for rebates from utility companies and state governments. In many cases, users are also offered tax exemptions and tax credits. Although requirements vary by state and utility companies, there is one common requirement:

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ENERGY STAR label

Residential LED products with this label are eligible for rebates. The US EPA (Environmental Protection Agency) introduced this program to promote the use of environmentally friendly products. Products that earn the ENERGY STAR label meet strict energy-efficiency specifications set by the US EPA helping you save energy and money while protecting the environment. Look up rebates and special offers near you on ENERGY STAR certified products here.

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DLC Listed label

The Qualified Products List by DesignLights Consortium (DLC) includes high-quality and high-performing LED products. A project by the Northeast Energy Efficiency Partnerships (NEEP), the major mission of DLC is to ensure the implementation of improved design practices in all areas of the commercial lighting market.

Lighting products are required to be subjected to rigorous laboratory tests and both the ENERGY STAR and DLC Listed labels guarantee high performance and qualification of those tests. Rebates make LED products much more affordable and at times even reduce their costs below that of the traditional lighting systems that don't qualify for these rebates. A major thing to also remember is that many incentive programs are limited by a budget or expiration date and you risk missing out on them if you wait too long before upgrading to LED lighting systems.

What are the types of LED Lighting Rebates?

The two different rebates available for LED lighting projects are Midstream and Downstream Rebates. Each of them comes with different processes, timelines, and requirements.  The major difference is the time when you receive the rebate compensation.

Midstream Rebates

  • The amount eligible for the rebate is deducted from the cost of the product at the time of its purchase and the distributor receives the amount of the rebate from the program.
  • Typically limited to lamps and tubes, but some programs include limited selections of fixtures and retrofit kits as well.

Downstream Rebates

  • The rebate amount is received by the customer based on the set parameters by the rebate program after the completion of the project.
  • These parameters typically include the wattage of the fixture being installed, watts saved, kWh saved, type of fixture, fixture v. retrofit kit, square footage of the building, etc.
  • Two types of downstream rebates available
    • Prescriptive: a set dollar amount is provided per unit based on the parameters listed by the utility company.
    • Custom: a set dollar amount is provided per kWh or kW saved.