What is Rebate

Horace He

Last Updated: October 16, 2023

What is Rebate

In the lighting industry, a rebate refers to a financial incentive or refund provided by power companies or utility companies to customers who purchase and install energy-efficient lighting products. The primary objective of these rebates is to encourage the adoption of energy-efficient lighting technologies and to reduce overall energy consumption.

There are different types of rebates available in the lighting industry, depending on the state and power company. The three most common types of LED rebates in the United States are:

  • Point of Sale (POS) Rebate: This type of rebate is automatically deducted from the purchase price at the time of sale. It provides an immediate financial benefit to customers, as there is no need to wait for the rebate to be processed separately.
  • Prescriptive Rebate: This type of rebate is paid out over a predetermined period of time. Customers have the flexibility to choose their own lighting fixtures as long as they meet specific energy efficiency standards set by the power company or utility company. The rebate amount is typically based on the energy savings achieved by using the eligible lighting products.
  • Custom Rebate: This is the most complex type of rebate. Facility managers can propose custom rebates to power and utility companies, which involves a more intricate planning process. Custom rebates allow facility managers to have full control over the rebate program, including the choice of lighting products and the calculation of energy savings. The rebate amount is negotiated between the facility manager and the power company based on the projected energy savings.

Customers should check with their local power company or utility company to understand the rebate programs and requirements applicable to their specific location.

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