Why utility companies provide rebates

Why are there utility rebates?

Seattle City Light recently had a mail in offer for a free LED light bulb. It arrived in an attractive recyclable package with information about why this one bulb makes a difference. As they put it “conserving electricity is the most cost-effective way to meet our future energy needs”. In fact, utilities routinely offer their customers substantial rebates to encourage installation of a variety of energy saving equipment and measures for just that reason.

Why incent conservation?

In our capitalist economy it might seem counterintuitive for a business to ask customers to use less. Doesn’t that mean less profit for the utilities? No, that won’t happen. As the population of Washington State grows, there will be more and more demand, especially for electricity. If they can keep up with that demand using their existing infrastructure, it keeps our rates low and they make more money in the process. Rebates cost a lot less than building new power plants and that’s a win/win.

A second reason that conservation is incented in our area is that our state has a law requiring utilities to conserve, (The Clean Energy Initiative). Without getting into the complexities, the law requires utilities to hit conservation targets and invest in renewable energy or face penalties.

How to take advantage of energy efficiency rebates

In Western Washington, all of our major utilities offer home energy efficiency rebates of some kind. This includes all of the local electric companies, plus Puget Sound Energy and Cascade Natural Gas. You can see a list of current rebates across the region on our site. Rebates cover energy saving upgrades such as high efficiency heating and window replacement, insulation and air sealing, toilets, water heaters, home energy audits, plus geothermal and solar energy. The value of the rebates can be $10 to $1800 for appliances and much more for solar panels. Every year the rebates change as they continue to calculate the savings gained from each measure and reassess what they can afford to offer to incent those savings.

Here’s how most Washington state utility rebates work:

1. The utility defines the qualifications under which they will offer rebates or grants. For example, the rebate for a ductless heat pump might be only on units placed in a main living area (Tacoma Power), or on a 95% efficient furnace (PSE).

2. Each utility accepts qualified contractors into their program, who they verify are licensed for their trade. (In some cases they allow DIY projects to qualify).

3. They train the contractors how to work with their specific program, including paperwork requirements, inspections, quality standards etc. Typically contractors who are qualified by the utility can take the rebate right off the invoice, so you are not paying and then getting a check later.

4. Where required, the customer may be asked to fill out an application in advance of the project. For example: if you are a Seattle City Light customer and would like a ductless heat pump, there is an application to file first to determine that you qualify.

There may be a few hoops to jump through to get the larger incentives, including applications, pre-inspections, in-progress inspections, and post inspections, depending on the utility or the project. It is, however, free money, and your contractor can walk you through any requirements.

Washington Energy Services is a qualified contractor for all major Western Washington utility rebate programs and can help you save on energy efficient upgrades. For more information, contact us today.