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Analysis: Prescriptive Chiller Incentives in North America

2021-08 Newsletter Post Image (1)Chillers are a major source of energy usage in many buildings to provide cooling capability for occupant comfort or for part of an industrial process. Commercial buildings, hospitals, campuses, manufacturing plants and other large buildings are frequent users of a chiller system instead of standard unitary or split systems. A deeper dive into chillers is well beyond the scope of this article; there are many excellent sources of educational material to be found. 

Introduction to chiller incentives

For this article, we are focusing on prescriptive/deemed incentives which tend to be an easier process due to a simplified approach to measurement and verification of energy savings. There are many utilities for which the custom program is the only path for chiller incentives and we are setting those aside for this analysis. 

For utility prescriptive energy efficiency programs chillers come in two primary forms, water-cooled and air-cooled. Utility incentive programs often further differentiate incentives by what kind of refrigerant compressor is used:

  • Centrifugal
  • Reciprocating
  • Rotary
  • Screw
  • Scroll
  • Magnetic Bearing

Some programs will also require or differentiate incentives that use a variable frequency drive.

Efficiency requirements

Most utility programs will have a minimum efficiency requirement that must be met to qualify for an incentive. Chillers will have to meet one or a combination of the following efficiency measurements:

  • COP - Coefficient of Performance
  • EER - Energy Efficiency Ratio
  • IPLV COP - Integrated Part-Load Value Coefficient of Performance
  • IPLV kW/Ton - Integrated Part-Load Value kW/Ton
  • kW/Ton

Chillers are generally required to meet AHRI standards as well. AHRI maintains a list of chillers that have met their requirements.

Incentive calculation

Chillers are often incentivized like their unitary and split system counterparts. Many programs will base their incentives on kWh saved, kW saved and a combination of kW, and kWh saved. Also very common are prescriptive calculations based on the number of tons of cooling capacity the unit has assuming the efficiency requirements have been met. In this case, the rate per ton used is often varied by size of the unit.


However, some chiller programs include secondary and even tertiary incentives on top of those base incentives. These are typically incentives based on how much more efficient the chiller is over the baseline qualifying efficiency measure. For example, a program may have a required EER minimum of 10.61 and if met will pay a rebate of $32/ton. And then pay an incentive for every 0.01 of improvement over the 10.61 EER. The formulas for calculating this performance over the baseline efficiency can get very complex, involving combinations of the efficiency ratios. 

By the numbers

By our analysis, there are 100 electric utility programs with chiller incentives in the US and Canada. These utility programs represent 393 actual electric utilities, cover 7.7m commercial customers.

The following table lists the number of programs that incentivize each type of chiller:


Chiller Type

Number of utility programs

Air-Cooled Centrifugal Chiller 


Air-Cooled Reciprocating Chiller


Air-Cooled Rotary Chiller


Air-Cooled Screw Chiller


Air-Cooled Scroll Chiller


Water-Cooled Centrifugal Chiller


Water-Cooled Magnetic Bearing Chiller


Water-Cooled Reciprocating Chiller


Water-Cooled Rotary Chiller


Water-Cooled Screw Chiller


Water-Cooled Scroll Chiller



Incentive calculation type by number of programs:

Incentive calculation type

Number of utility programs

Prescriptive per Ton only


kW saved only


kWh saved only


kWh+kW saved only


Combination base and performance



Prescriptive Chiller Programs geographic availability

We charted the states and provinces that have a utility that offers prescriptive chiller incentives.

Canada: Ontario, Alberta, New Brunswick, Quebec

Update 11/1: Chillers and estimates on their incentives are now available in the UtilityGenius platform.

Mike Cham
Mike Cham
CTO, Encentiv Energy

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