No business likes to leave money on the table. But many do just that when they fail to pursue all available incentives for energy upgrades.
Companies often are driven by noble intentions when they replace lighting or other systems with energy-efficient solutions. They want to run more sustainable operations and reduce their energy use, but saving money on their utility bills is always a plus, too.
Photo courtesy of Energy Management Collaborative |
However, many pass on upgrading to more energy-efficient systems because they believe such projects are too expensive. If only they knew that most utilities and others offer incentives, which cover anywhere from 20 percent to the entire cost of energy-reduction projects, often including labor, materials, taxes and other costs.
"There are incentives available all across the country, with thousands of utilities offering energy-efficiency programs," says Katie Quam, manager of customer incentives at Energy Management Collaborative (EMC), a Minneapolis-based specialist in turnkey lighting conversions and service solutions for business. "It's very important that customers know about incentives and go after them or have someone help them go after them."
Some companies fail to take advantage of incentives because they just aren't aware of them. Others find the application process too arduous. And some try to capture incentives but make missteps along the way, voiding their eligibility.
Many resources are available that can help. Firms across the country can be a business's secret weapon to finding and securing available incentives. Agencies that administer utilities' energy-efficiency programs are another resource, providing information and guiding businesses through the incentive process.
Seven key steps will help to ensure you qualify for as many incentives as possible.
Core communication. Start by having conversations with your utilities. Check to see if they have any incentive programs available, and for what type of energy-efficiency project. Some involve lighting, others relate to heating, ventilating, and air conditioning (HVAC) systems, and other new technology. Let them know what sustainability projects your business wants to complete, and find out if their incentive programs match those plans. With that incentive information in hand, you can start thinking about the best (and most lucrative) places to start.
The right ally. Once you decide to pursue a project, your next step should be to identify a trade ally partner, suggests Timm Heck, an energy advisor in the chain and franchise program at Focus on Energy, Wisconsin utilities' statewide energy-efficiency and renewable resource program. Trade allies are companies or contractors that have been approved by utilities to help customers obtain incentives. Some utilities even require that you team up with a trade ally in order to receive incentives.
Working with a trade ally will give you an advantage. Many utilities offer them training and regularly hold quarterly conference calls to keep trade allies updated on all the latest changes in energy incentives. And these incentives change often. This comprehensive training means that trade allies will provide you with the most current information on approved technologies and every available incentive program.
"I always think it's best to have a qualified professional who works in the area on a daily basis help you find out what kind of project you can do," Heck says. "A trade ally can confirm the eligibility of your project first, and then determine who might have incentives available. They also can help with energy savings calculations. If you're pursuing a project at multiple locations, they can tell you what incentives in which areas will provide a higher return on investment."
Prioritize locations. Some utilities and states have better incentives than others. That's why it is essential to determine which provide the best returns and plan your installation schedule accordingly, notes Shay Reza, cofounder of Arise International. New York offers some of the highest incentive rates in the country. Many companies with nationwide presence oftent start their energy-efficiency upgrades there first to take full advantage of those programs.
Checking in. Once you decide to do an energy-efficiency project and go after incentives, don't start anything without learning all of a program's requirements. Here is where a trade ally or partner can be especially helpful. Each utility has different rules, and not following those requirements often equals not getting the incentive.
So before you get any contractors or vendors involved, put your trade ally to work. They can dig into all of the utilities' requirements regarding materials, systems, documentation and more. They also will determine what technology you should use, what level of energy savings you need to achieve, and what documentation they require, such as design plans or invoices, notes Quam of EMC.
You've been approved. Next comes one of the most important steps before starting an energy-efficiency project: getting preapproved by the utilities. Not every utility requires preapproval for every incentive program, but many do require that step before you can capture any incentives.
The preapproval process might include sending in design plans, submitting specs on materials like light fixtures or HVAC systems, and site inspections. The utilities want to verify that you're using qualified equipment — typically items that have earned designations from Energy Star or the Consortium for Energy Efficiency, Heck says./p>
Getting that preapproval secured means you'll be ready to go well before the project start date. It's also important because you then ensure that the incentive funds are available. "When utilities give you approval, they often set aside the rebate funds for your projects," Quam says. "Once that pool is depleted during the year, the funds may no longer be available until the utility has approved a new budget."
Extra time. It's important to schedule enough time for preapprovals into the design and planning process if they are needed, recommends Reza. That's especially true for companies undertaking projects with multiple locations. Often utilities require four to six weeks to approve a project — giving them time to review documentation and do site visits — and it typically must not start before approval.
"One of the most common mistakes on the incentive side is when businesses aren't flexible with an installation date. If they have an installation date that won't change, sometimes the pre-inspection doesn't get finished in time and they start to install before approval," putting their incentive at risk, says Reza. "So we ask for a little more flexibility on their end."
Deadline diligence. Keep a close eye on program deadlines. After approving a project, many utilities provide a certain amount of time to complete the work. Make sure you adhere to those deadlines, as well as others. Some utilities have deadlines for submitting any final documentation after you complete an energy-efficiency project.
Start saving now
Going through the process of capturing incentives takes attention to detail, but it is definitely worth the time and effort. Companies often recoup half of the cost of their energy-efficiency projects, helping them direct those energy savings to their bottom line more quickly.
"Incentives are very significant," says Reza. "It's in their best interest to get these incentives because it can really lower their payback time by half."
Securing incentives also maximizes the value of the dollars you invest in energy projects while lowering the initial cost of the work, making the investment goes farther and works harder.
Suzy Frisch is a veteran freelance writer and editor in Minneapolis. She covers business, law, medicine and many other topics.