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Home Energy Magazine Online March/April 1994
TRENDS
Second-Generation Rebates: Manufacturer Buy-Downs
Promoting compact fluorescent lamps (CFLs) as an energy-efficient
alternative to incandescent lighting is a challenge that has stumped the
efficiency industry for years. Retailers won't commit shelf space until they
are assured of a self-sustaining market, with or without utility support. Some
utilities are questioning the cost effectiveness of subsidizing CFLs, and
consumers--if they have any opinion at all--usually believe that CFLs are
expensive, hard to find, and incompatible with most household fixtures.
The Environmental Protection Agency has teamed up with the Consortium for
Energy Efficiency (CEE), a utility partnership, to address these obstacles. The
utilities are pooling their resources to provide a rebate to lamp
manufacturers--a tactic pioneered by Southern California Edison which has
proven effective in reducing the cost of CFLs to consumers without the high
administrative costs typical of consumer and retailer rebate programs. By
giving the incentive directly to the manufacturers, the reduced wholesale price
is passed on to distributors and retailers before markup. Because markup
is typically a percentage of cost, a reduction in the initial wholesale cost
lowers the retail cost more than direct customer rebates do, often doubling
savings, which increases the effectiveness of utility DSM expenditures.
The partnership is developing a model request for proposals to be released for
public comment this year. The manufacturers' proposals will be evaluated
against more than a dozen criteria, including retail distribution, marketing,
promotion, product, and pricing capabilities. The goal is to identify the best
performing and most aggressively marketed products, and to standardize
specifications, evaluation criteria, bidding procedures, program timing, and
utility involvement with product delivery.
The manufacturer buy-down program does not attempt to promote compact
fluorescent lamps for all applications, or to dramatically expand the
performance of the technology. Because today's CFLs are suitable for only about
half of residential applications, a complementary initiative is under way to
encourage manufacturers to bring efficiency to the remaining home sockets.
This second initiative will provide an incentive to induce manufacturers to
develop and produce a lamp with all the familiar performance characteristics of
an incandescent A-lamp, but with superior energy efficiency at a reasonable
price. The proposal request for this project should be issued late in 1994,
with winners announced late in 1995, and marketing and introduction of new
products by 2000. This project takes advantage of a window of opportunity
created by the U.S. Energy Policy Act of 1992, which requires DOE to
investigate the need for efficiency standards for incandescent lamps, and to
issue those standards by April 1997 if it finds they are feasible and
justified. Introduction of an advanced technology could affect DOE's decision,
and influence legislation requiring the manufacture and sale of efficient
residential lighting products. For additional information, contact the CEE
program office at (617)330-9755.
-- Bill Von Neida
Bill Von Neida is program manager for residential projects at the U.S.
Environmental Protection Agency .
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