In February, the Design Lights Consortium ("DLC") finalized the technical specifications for the next generation of LED products. These new requirements, versions 5.0 and 5.1, are designed to help usher in new levels of energy efficiency, light quality, and controllability. The DLC started certifying products under the new v5 spec earlier this year, and they will remove older products that don't meet this certification at the beginning of 2021. This change can have a significant impact on the potential rebates a project may receive.
What is the DLC?
The Design Lights Consortium is a non-profit organization that sets standards for efficiency, controllability, and light quality of LED products and controls. Their product specifications ensure that customers get high-quality and efficient lighting that they can depend on. Their qualified product lists cover most types of commercial lighting, as well as networked lighting controls and horticulture lighting.
What does the DLC have to do with rebates?
The DLC does not provide any rebates or incentives themselves. Instead, their certification is used as a benchmark by many rebate organizations across North America. Based on data from our RebatePro tool, between 70 - 85% of rebates require that a product is DLC listed in order to get a rebate. This means that most customers who want to receive an incentive will have to use a DLC listed product.
What is changing?
The DLC v5.0 technical specification requires increased efficacy requirements across all categories compared to the last version (v4.4). The DLC will delist products that do not meet the v5.0 efficacy requirements on February 28. In essence, this change means customers will get more lumens out of the LED solutions while using fewer watts. Originally, v5.0 would require dimmability on standard indoor luminaires and retrofit kits, but this requirement was postponed because of the COVID pandemic.
What does this change mean for rebates?
DLC certification is a requirement for a majority of rebates across North America. Many programs are very strict about this rule, requiring a screenshot of the current DLC listing. When the DLC delists the v4.4 products on February 28, most rebate programs will no longer provide incentives for those delisted products.
Will my projects be affected by the transition to DLC v5?
Unlike the last major revision to the DLC requirements, which made manufacturers resubmit testing data to get the new qualification, this transition automatically upgraded any product that already met the v5.0 requirements. Because of this change, about 78% of the DLC product list is already v5 certified.
The chart below shows how many of each product are DLC v4.4 listed versus v5.
Another possible issue is that products currently considered as "DLC Premium" under v4.4 may change to the "DLC Standard" under v5.0. In areas that provide an additional incentive for DLC Premium products, that may mean lower rebates for projects in 2021.
Will there be a grace period for older products?
In 2017, during the last major DLC revision, an estimated 40% of products were no longer eligible to be listed. In response, most rebate programs offered a 60 to 90 day grace period to still use older v3 products. It helped distributors use that time to get rid of their old stock and gave projects already underway time to finish.
We don't expect to see many grace periods offered by rebate programs this time. For the v5 transition, the DLC has given over a year of notice and worked very closely with manufacturers in designing the spec. They've also communicated this transition very clearly through multiple channels. The market seems to be much more prepared for this transition than they were in the past, so a grace period is less likely. As of today, no program has indicated that there will be any grace period.
How can I make sure I still get rebates for my project?
If you are working on any project that will continue into 2021, make sure the product is DLC v5.0 rated. You can easily find out this rating using DLC's tool.
If the product is still showing version 4.4, you'll need to make sure the project finishes, and the final rebate paperwork is submitted before the product is delisted on February 28. If it's a project for which you received pre-approval, reach out to the rebate program to see what implications this change may have on your incentive.
Looking toward the future
Along with the v5.0 requirements, the DLC also published v5.1, which will go into effect later in 2021. These specifications will have additional conditions like dimming and better light quality. We don't expect these to present an issue for 2021 rebate programs, but it will be something to keep in mind in the second half of the year.
Will there still be rebates in 2021?
We expect commercial lighting rebates will be widely available in 2021. Except for a few isolated areas, most programs have indicated they will continue next year. While they have not yet announced their 2021 details, the general consensus is that rebates will actually increase next year. Many utilities are struggling to reach their savings goals, with a large number of projects being put on hold this year. By increasing their rebate offerings, they're hoping to spur further investment in energy efficiency projects.
Will you be working on a project in 2021? We can help you make sure your products will qualify and estimate the incentives you may receive. See how we can work together.