Utilities Investing in LEDs

The growth in the LED market has been remarkable, coming from zero to probably at least 50% of new construction in a short time period is phenomenal for a “new” product. And the retrofit market continues to move to LEDs. A major part initial has been energy efficiency (and it continues to be) but a growing part is additional functionality. And utilities continue to lead the way investing in rebates for LEDs to shed the need for energy generation.

A newsletter we received today from Briteswitch further emphasis the move to LEDs.  Consider some of the newsletter’s content:

“Over the past few months, organizations across the country have been busy updating their 2016 rebate programs. Right now, 64% of the country is covered by an active commercial lighting rebate program.”

“Last year, incentives for LED tubes really took off as rebate program managers started to add these products. This year, the number of programs providing incentives for these lamps increased 28%. An interesting trend we saw though was that the average prescriptive rebate for these lamps dropped 33% since last year. This is very similar to the decline we saw two years ago with screw-in LED lamps and typically happens as the rebates try to adjust to the price levels in the marketplace. The average prescriptive rebate at this moment is $7.95 per lamp.”

“Last year, the Design Lights Consortium (DLC) added a category for LED screw-in lamps that replace HID lamps. These mogul base lamps can replace 150W – 1000W lamps in high bay or exterior applications to save energy. This year, HID replacement lamps made their first appearance in prescriptive rebate programs. Currently, only a handful of programs offer prescriptive rebates for these, but based on the adoption speed of other LED products in the past, we expect acceptance to grow over the year. Right now, the average prescriptive rebate is around $60 per lamp. For rebate programs that do not have a prescriptive rebate available yet, custom rebates may be available after negotiation.”

Some thoughts…

• If you don’t subscribe to Briteswitch’s newsletter, you should.  If you’re not acquainted with them, it is worth the call.
• If you don’t want to subscribe, email me and I’ll forward a copy to you.
• If you are serious about being in the LED space, you should be aware of the rebate programs in your marketplace. Further you should offer some type of rebate administration service (and some distributors charge a fee for this service and some use it as a differentiator.)
• Reportedly, some utilities offer rebate programs to support distributors.
• Make sure your salespeople know about available utilities.
• Market the rebates, and your rebate services, to customers (as a service for contractors or direct to end-users) to position yourself as “the energy / lighting resource” in your market. And market it frequently.  Promoting utilities once is not enough to ensure that your customers remember you.
• Don’t think you are too small to take advantage of the lighting opportunities in your market.  Here in Raleigh a small distributor, Victory Lights Inc, has been promoting its lighting capabilities on sports talk radio.  They don’t have the resources, presumably, of Graybar, Rexel, Sonepar, WESCO or many of the larger regional distributors, but they are focused, creative, committed (to lighting) and wiling to take a risk and market themselves.  Is there any reason why you can’t?

So, how much could capturing rebates add to your lighting sales?