Written by: Johnathon Fata
The energy efficiency industry is an ever-changing landscape of technologies, programs and participants. Even the financial incentives offered by utilities change over time, which makes the timing of a building’s energy efficiency retrofit a critical consideration.
Why do utility incentives exist? At a high level, utilities in many states have energy reduction targets established by that state’s public utilities commission. These reduction targets are established because energy efficiency is typically the lowest cost resource for utilities to acquire and is prioritized over new power plants, which are more costly. Once these targets are set, utilities achieve energy reductions in their portfolio through incentives and innovative programs designed to connect customers with relevant incentives and support. Incentives are designed to encourage market adoption of energy efficient technologies over less efficient technologies by offsetting some or all of the cost of the retrofit.
If the utilities currently provide incentives, then why should I care about the timing around my energy efficiency retrofit?
These incentives change (i.e. are reduced) over time as the technologies they incentivize come down in cost and as building codes are tightened to require more and more efficient technologies.
Time to take advantage of utility incentives!
Taking advantage of utility incentives at their current level is critical for optimizing the business case for energy efficiency retrofits. Time is of the essence when it comes to incentives, and one example of this can be found with Waypoint’s client, Pacific Gas and Electric (PG&E). PG&E offers a wide array of incentives for commercial customers, however, many of these programs may expire at the end of 2015. Customers who have not submitted their application or completed installation (depending on the program) by the end of 2015 will not be eligible for the incentives at their current levels. These incentives may be reduced or could be removed completely in future years, which hurts the financial case for an energy efficiency retrofit and may cause ownership to back out of the project altogether. If the project had considered this timing sensitivity and taken advantage of the incentive at the higher level, it may have had a much higher likelihood of moving forward.
Waypoint works with its customers to secure utility incentives throughout the country and has extensive experience with this process both in our current utility programs and directly with our commercial and multifamily customers. For more information on utility incentives and how Waypoint can help in understanding, identifying and securing the right incentive for you, contact us at firstname.lastname@example.org.