For the last seven years, Public Service of New Mexico PNM has offered programs that incentivize businesses for purchasing energy efficient equipment. They offer both prescriptive and custom applications in order to provide various methods to apply for these incentives. Power companies across the country offer programs like these in order to reduce the load on their grid while reducing upgrade costs, and to conform to federal regulations. Businesses benefit by reducing the capital cost of the project, installing equipment that provides longer life and less maintenance, and reducing their utility bills. After college, I began my engineering career as an inspector in program and noticed how quickly technology advances how these programs help shift the market.
In my first years I saw tons of incandescent light bulbs being replaced with CFL bulbs, LED retrofits were considered a custom measure, and T12 fluorescent lamps were easily found in any store. Four years later, fluorescent technology has made great leaps in efficacy, moving from the older generation of T8s that provided 88 lumens per watt, to the newer T8 technology that provides 95-100 lumens per watt. But even with that increase in efficacy, it’s hard to argue against the consistent >120 lumens per watt of LED fixtures. LED is fast becoming the standard retrofit, not only because they have become more affordable, but because consumers are seeing the value in having efficient equipment in their facilities. One of the main examples of a shift in technology is how PNM no longer offers incentives for CFL bulbs, which puts CFLs in the category of incandescent bulbs as an outgoing technology. By educating the contractors and suppliers that participate in these programs to encourage customers to invest in more efficient equipment, PNM has helped influence which technology is more commonly used. This has also been helped along by improving the incentives available and streamlining the application process.
The application process that I’ve been referring to which is currently used by PNM is considered a “Downstream Incentive Program.” The typical way it works is that the consumer will purchase and have the equipment installed, and then apply for the incentive after all is said and done. A few weeks later they receive the incentive check. To a lot of consumers this is cumbersome and turns them away because they don’t want to deal with the paperwork, or they’re not even aware of the incentives offered. What many fail to realize is that the process really isn’t that scary and that all the information is readily available. But even dealing with gathering information tends to detract people from the process altogether. A newer method of is making an appearance in most programs called the “Midstream Program.” This type of program gets rid of all the ugly paperwork for the consumer and takes care of the rebate at the distributor level. Instead of having the contractor or the consumer apply for the incentive through a “lengthy” application process, the distributor applies the incentive at the register for the energy efficient equipment, giving the customer an instant rebate. Usually, for the more efficient equipment, there is some lead time to deal with and an additional first cost, so this helps take care of some of that incremental cost and also means that the more efficient equipment is more readily available from the distributor because they are more likely to have it stocked. While PNM currently offers this primarily for HVAC equipment, you can expect lighting to follow soon. Again, helping the market distribute this more efficient equipment.
One thing to keep in mind is that these programs are geared towards helping with the first cost of equipment and to help the gap between the cheaper, less efficient equipment and the costly, cheaper-to-run equipment. While it’s difficult to provide numbers because lighting and HVAC equipment savings vary greatly based on building-type and occupant use, it is a fact that a higher up-front cost for many types of efficient equipment is well worth the savings in yearly energy use and lifetime maintenance of that equipment. It is up to us, the consultants and the distributors/contractors, to educate the public that it is worth paying a little extra money up front for long-term benefits and that these programs are available to help with some of those costs. These are tools that we can use to educate our clients that energy efficiency should be a big component of their business model.