Most rebate programs have participation and energy reduction targets they strive to achieve each year. Occasionally, when they’re having problems meeting these goals, they implement bonus programs. These programs typically offer increased incentives for the existing rebate measures for a set period of time. The value of the bonus will vary depending on the utility. Sometimes, it's an extra 10% or 20%; other times, it can more than double the original rebate.
Bonus programs typically start to appear over the summer or in the fall, but more areas of the country have been adding them over the past few months. This increase is likely due to the lack of activity many programs have seen due to COVID-19. Currently, 75% of the United States is covered by a commercial lighting rebate. Of that, almost 20% is offering an additional or bonus opportunity, and more bonus programs are expected to develop in the coming months as the economy struggles to resume.
As people continue to deal with the results of the pandemic, BriteSwitch, a firm specializing in capturing local, utility, state, and federal rebates and incentives for businesses, is providing insight into the types of bonuses being offered. While the programs can vary widely on how they work, they tend to fall into four main categories.
- Bonus on specific products. Rebate programs may offer additional incentives on certain product categories to help increase participation. It may be a particular type of product, like a 4-ft LED tube, or a whole category, such as outdoor lighting. While they may be for a certain product type, they never specify that projects use a specific brand or model. An example is Energy Trust in Oregon, which is currently providing a 150% bonus on TLED measures.
- Bonus on certain customer categories. If there's a specific market segment that seems to be particularly reluctant to upgrade their lighting, programs may offer a bonus for that segment. For example, in New Jersey, schools and municipalities currently receive double the rebates that other types of businesses would get.
- Across the line bonus. This bonus type gives an additional rebate for any project, regardless of the application or product. For example, a program may offer an extra 20% for any lighting rebate it provides for the next 60 days. The benefit of these programs is that it is across the board, so you can use any product you want and not spend time researching what will get you the highest total rebate.
- Trade ally bonus. Some programs find it's more effective to incentivize the person selling the lighting instead of the end user. To receive these incentives, you typically must be a trade ally with a program. Becoming an ally can require being approved by the program administrator and attending training sessions. Since these bonuses go directly to the distributor, contractor, or ESCO, they instantly increase the project's margin.
It's also important to keep in mind that using bonus programs can incentivize customers to make purchases. Typically, rebate programs have deadlines, but bonus programs create an even more urgent timeline. With shorter time periods and higher incentives, it's a great way to motivate a customer to begin a project. For example, PECO in Pennsylvania had a lucrative bonus program running until May 31. Working with various distributors in the region, BriteSwitch used that deadline to close several projects on the verge of signing a PO. The bonus program helped them get a commitment for the projects and their customers to get an extra 25% to 100% in rebates.
Since bonus programs are usually sudden and short-lived, it's a good idea to get on the mailing lists for rebate programs you work with. It's important to note that many bonus programs have specific rules and requirements. They may have strict pre-approval or final approval dates, or you may need to enter a special code on the application. Pay attention to all the fine print and deadlines, or you will miss out. Also, keep in mind that many programs still have their cost caps. While it may appear that a rebate may be 20% higher because of the bonus, it may still be capped at 75% of project cost.
Randy Young is the operations manager at BriteSwitch, a company that specializes in finding and capturing rebates for businesses. He can be reached at [email protected].
