Updated June 25, 2021
We are examining the use of the DesignLights Consortium® (DLC®) Premium classification in US and Canadian electric utility programs. The DLC Premium designation has existed since 2015. Since then, adoption of this concept into utility programs has been by a small select group and is getting progressively smaller. When we last covered this topic in our newsletter at the very end of 2018, several utilities have dropped any specific support for DLC Premium. We will cover the current usage of DLC Premium by geography, and in detail by program and category.
Figure 1
The map in Figure 1 Illustrates the states and provinces that contain at least one utility that either requires DLC Premium or offers higher rebates for DLC Premium. We have identified 3 levels of program support:
The increase in rebate for DLC premium overall is between 3% and 60%, but varies greatly by program and category, which we will illustrate in detail further below.
Utilities offering Premium rebates: 79 (out of approximately 1,000 that offer C&I rebates)
Total number of commercial electric accounts in US: 19,350,000 (approximate from 2017 EIA)
Total number of commercial electric accounts in DLC Premium utilities: 1,190,000
% of commercial electric accounts in DLC Premium utilities: 6.1%
The following programs have changed support for DLC Premium since March 2020:
The following table summarizes the specific utilities and programs that support DLC Premium. The data is drawn from our Encentivizer database. Premium only indicates that there is no percent increase because DLC Standard is not incentivized. The range is largely driven by the lumen package of the products.
| State | Program | Category | Percent Increase |
|
CA |
PG&E |
High Bay |
Premium only |
|
CT |
EnergizeCT |
Troffers |
6% - 31% |
|
CT |
EnergizeCT |
Parking Garage |
25% - 60% |
|
CT |
EnergizeCT |
Troffer Retrofit Kits |
6% - 31% |
|
DE |
EEIF |
Troffers |
13% - 33% |
|
DE |
EEIF |
Parking Garage |
20% - 25% |
|
FL |
JEA |
All |
Premium only |
|
MN, IA, ND, SD |
Bright Energy Solutions |
Case lighting |
20% - 33% |
|
NS |
Nova Scotia |
High Bay |
6% - 25% |
|
NY |
National Grid |
Outdoor |
3% - 40% |
|
NY |
National Grid |
High Bay |
11% - 16% |
|
NY |
National Grid |
Troffers and Kits |
33% - 50% |
|
NY |
National Grid |
Parking Garage |
6% - 10% |
|
NY |
National Grid |
Retrofit Kits High Bay |
13% - 16% |
|
QC |
Hydro Quebec |
Multiple categories |
Varies |
|
RI |
National Grid |
Outdoor |
33% |
|
RI |
National Grid |
High Bay |
16% - 50% |
|
RI |
National Grid |
Troffers and Kits |
11% - 20% |
|
RI |
National Grid |
Parking Garage |
25% - 50% |
|
RI |
National Grid |
Retrofit Kits High Bay |
50% |
It is an understatement to say that given the increased requirements and cost of complying with DLC Premium, the amount of utility support is lackluster. But we will examine the opportunity and challenges of DLC Premium through a couple of lenses.
Currently the major hallmark of DLC Premium is higher efficacy. In the DLC Premium utilities, that higher efficacy is rewarded with higher rebates. However, in many utilities, rebates are calculated based on Watts saved or kWh saved. Higher efficacy in these programs is then rewarded with higher rebates as well given the higher energy savings. But if we take High Bays as an example, in the current version of the DLC SSL 5.0 the minimum for efficacy for standard is 120 and for premium is 135, which is a 12.5% increase. Offering a building owner a 120 vs 135 lumen/watt solution would yield a 12.5% higher rebate for the DLC Premium qualified product for these energy savings-based programs. 12.5% is in the range that the DLC Premium programs offer as extra incentives, without the rest of DLC Premium requirements. On the other hand, for programs that offer fixed rebates based on category of product and lumen ranges, there is no extra rebate dollars for a DLC Premium product. This is a contrived example, but illustrates the complexity around the valuing the central feature of DLC Premium.
Obviously, the limited geography and market coverage of DLC Premium is worthy of a few questions. How much business do I do in these territories? How much do I sell of these specific categories in each of these utilities? Where do you do business?
The new DLC SSL 5.1 will go into effect in 2022 and will have enhanced requirements for DLC Premium products.
Each one of these factors require examination by manufacturers to determine their costs from both a product development and testing lab perspective.
Will more utilities explicitly support DLC Premium?
Given the recent trends in DLC Premium adoption (or abandonment), it is difficult to imagine that more utilities will suddenly support DLC Premium. The minimum efficacy increases are minor generally, and since most utilities are judged on kWh and kW savings, there isn’t much justification for adopting it. To balance that, there is some discussion about the quality of light with more progressive public utility commissions and utilities, but remains to be seen how that translates to utility program goals.
Will utilities that support DLC Premium increase the amount they are incentivizing?
It would be difficult to understand why. Utilities are also judged by the cost of acquiring energy savings, and therefore must balance any increase in dollars with a commensurate increase in energy savings, which is not warranted in this case. Again if public utility commissions can get behind some sort of additional compensation for light quality, then you may see increases.
Note to Encentivizer Product Awareness subscribers: The economic analysis of where DLC Standard and Premium matter is easily calculated using the Product Awareness tool. Picking an equivalent Standard and Premium fixture from your catalog in the tool enables you to quickly determine how Premium affects your products’ rebates.