Utility Rebate Programs. In a number of markets throughout the U.S., local electrical utilities and related organizations are offering rebates for the purchase and installation of energy efficient products and systems. Ratepayer-funded programs are offered by utilities to encourage load reductions by its customers. It costs approximately seven times as much to produce a kWh as it does to save a kWh.
According to a study by Harris Williams & Co., in 2009, ratepayer-funded energy efficiency program budgets totaled $4.4 billion. Aproximately 55% or $2.4 billion of program budgets fund incentives for utility customers (such as a small business owner receiving a rebate for for the purchase of energy efficient motors, LED lights etc.). Approximately 30% or $1.3 billion of program budgets, are designated to to pay for outsourced program services which consist of: 1. program consulting and design, 2. program management and implementation, and 3. evaluation, measurement and verification. Internal administration and other costs account for approximately 15% or $600 million of program budgets.
The ratepayer-funded energy efficiency program management sub-sector of the energy efficiency services sector is rapidly expanding in the U.S. From 2004 through 2009, ratepayer-funded energy efficiency spending increased from $1.7 billion to $4.4 billion, representing a CAGR of 21.3%. The number of state-level policies enacted over the past several years suggests that the next decade will see sustained increase in funding levels. Ratepayer-funded energy efficiency spending is estimated to increase at a CAGR of 16.1% from 2010 to 2015.