Why Are There Utility Incentives and Rebates For Lighting Retrofits

Minnesota State Energy Office

In the last several years, concerted efforts have been made to lower energy use and CO2 emissions. Part of how this gets accomplished at the state level is by providing incentives to lessen upfront costs associated with making the necessary changes.

In Minnesota, the Next Generation Energy Act of 2007 was developed by the Conservation Improvement Program (CIP) to create clear energy-saving goals for electric and gas utilities. The Minnesota Department of Commerce, Division of Energy Resources (DER) oversees CIP to ensure that ratepayer dollars are being used effectively and energy savings are reported as accurately as possible. A 2008-2013 assessment of the economic impact of the CIP found that the program generated at least four dollars in benefits to Minnesota for every dollar invested.

Each local electric and gas utility develops it’s own conservation plan, with a variety of programs offered to assist both residential and commercial customers become more energy efficient. Utilities are required to submit conservation plans to the Department for review and approval prior to implementation. The DER then reviews and approves each plan and the associated energy savings calculations.

Lighting programs for residential customers include energy audits by trained energy consultants as well as rebates for compact fluorescent lights. Commercial and industrial customers will generally find more rebates at their disposal, including rebates for high efficiency lighting and lighting control systems.

Traditionally, utility programs have focused on creating incentive for customers to purchase energy efficient products instead of standard efficiency products. Going forward however, expect utilities to pilot newer approaches to save energy such as offering packaged services, and measuring savings that result from operation and maintenance or behavioral measures. This can mean setting up building control systems or simply turning the lights off more often as they are not in use.

Overall, utility incentives have played a vital part in lowering our country’s carbon footprint and will continue to be a key component in reducing that even more going forward.

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