Throughout the Program Briefs series, a few topics have been addressed that can have a BIG impact on the cost effectiveness of energy efficiency programs; one such topic discussed the importance of calculating the appropriate Incremental Cost and Payback, and a second covered how to Avoid the Ultimate Free Rider. Is there a way to cover these topics consistently for all projects? There just might be!
Project pre-approval is the process where a customer submits a prescriptive or custom rebate application before the project is started. This allows the efficiency program implementation staff a chance to assess compliance with program rules (eligibility), perform a preliminary analysis, and estimate the energy impact as well as the potential incentive. While this may seem like an extra step, it can provide valuable information to the customer, as well as utility staff.
The first and most obvious benefit to project pre-approval is the ability to ensure projects meet program requirements, such as efficiency requirements, payback period being too short (or too long in some cases), and any manner of project baseline concerns. This helps to reduce the number of projects where the energy savings is reduced significantly during an evaluation.
More importantly, it provides another significant benefit; preventing end users from purchasing equipment, often times very expensive equipment, that doesn’t qualify for a rebate. Imagine the frustration of a large customer, who, at the insistence of an equipment vendor touting the program incentives, installs a $500,000 chiller only to find out there will be no incentive because the chiller doesn’t exceed code required efficiencies.
Pre-approval not only would have saved the customer money, but could have been used as a tool to get the optimal equipment purchased, or to promote other parts of a project that fall into other program offerings as well. The customer is happy, and the utility is the hero. It’s a win, win!
While there are significant benefits to pre-approval, it may not be realistic to require all projects to go through a pre-approval process. Implementing some sort of selection strategy is an excellent way to combine a little added upfront work for high impact projects or measures, while not bogging down the entire process.
Hands down, project pre-approval is a great avenue to detecting or eliminating “problem” projects before they reach the point of no return, literally.