Maximizing Rebates When Purchasing Foodservice Equipment

Rebates for energy-saving commercial foodservice equipment can be an incredible resource. This becomes especially relevant when the cost of this equipment teeters on the high range and operators continue to look for ways to prove ROI. Offered by the EPA’s Energy Star program as well as utility companies around the country, rebates can save foodservice operators up to thousands of dollars on equipment. For some operators, a $500 rebate can mean the difference between buying or not buying a specific piece of foodservice equipment.

But it’s no secret that first finding, and then applying for rebates, can involve some extra time and legwork.

Rebate amounts and requirements can vary from state to state and in most cases, depend on the programs that local utility companies have — or haven’t — set up. And then it’s a question of how to maximize those rebates once found. So we’re going to help break it all down. Starting now.

Step 1: Research Available Rebates

There are two basic types of rebates: ones offered by various utility companies across the country and those offered by government and other organizations like Energy Star and the Consortium for Energy Efficiency (CEE), according to David Zabrowski, general manager of the PG&E Food Service Technology Center in San Ramon, Calif.

“The challenge is rebates are not ‘one size fits all’ because every utility company has different requirements,” he says. Rebates, say, for an Energy Star-rated gas fryer might be $500 in one state and $1,000 in another.

Utilities base the rebate amount on the value of energy or water saved in one year of operation and/or on the cost of the equipment. But because those energy-saving estimates can range based on where utility companies get their information, those rebate amounts will fluctuate. Cost of the equipment represents the other. “A rule of thumb for most utility companies is they don’t want the rebate to exceed half the cost of the equipment,” says Zabrowski.

Utility companies generally use their own formulas to determine the rebate amounts. That means it’s up to the buyer to do more research and due diligence — something not everyone wants to spend the time to do. But it doesn’t have to be too difficult. “To find out what’s available in your area the first resource I would go to is the Energy Star rebate finder,” Zabrowski says. He quickly notes that list will only cover Energy Star-rated products and foodservice operators can purchase other energy-saving appliances.

We’ll get to Energy Star in a minute, but in the meantime, let’s explore additional resources for finding rebates. “Other tools are useful but require a little more digging,” he says. For example, DSIRE (http://programs.dsireusa.org/system/program), which is operated by the N.C. Clean Energy Technology Center at N.C. State University and funded by the U.S Department of Energy, offers a database of state incentives for renewable energy and the website allows users to search by state or by incentive.

The challenge with this resource, according to Zabrowski, is that it lumps all commercial, residential and agricultural equipment together. “And there is a heavy focus on renewables, like solar panels and ground water heating,” he adds. “So you have to dig down to find the commercial foodservice equipment, but it’s there.”

Another resource is the CEE (cee1.org), which maintains a list of member programs. “The nice thing about this site is it’s a little less cumbersome and you can drill down to commercial foodservice and find rebates for equipment that exist outside of Energy Star,” he says.

Of course, the Food Service Technology Center also offers a rebate finder on its website (http://www.fishnick.com/saveenergy/rebates) which includes incentives offered by West Coast utility companies PG&E, SoCalGas, Southern California Edison, and Sempra Energy.

Finally, rebate-searchers can visit the websites operated by their local utility companies, which often list rebates. Oftentimes, though, these sites are, shall we say, not as user friendly as other options, Zabrowski notes. Still, rebates often require completing application forms presented by these companies so in some cases visiting the sites becomes inevitable (more on that later).

As mentioned, Energy Star maintains a robust program for rebates offered nationwide for certain equipment types. A good first place to start is the program’s Commercial Food Service Incentive Guide (note: the EPA is currently updating that guide for 2015), which lists available rebates in different states for commercial foodservice equipment including ice machines, refrigerators and freezers, ovens, fryers, griddles, steam cookers, hot food holding cabinets and dishwashers.

"Last year, incentives were available in 45 states, with 30 states having at least one Energy Star-certified commercial foodservice product incentive,” according to Hewan Tomlinson, energy efficient program manager at U.S. EPA. “In total, there were over 800 Energy Star certified product incentives available.” Tomlinson recommends visiting www.energystar.gov/rebatefinder to view the Guide. See column A to filter by state and column 1 to filter by type of equipment.

Step 2: Apply for a Rebate through a Utility Company

In most cases, equipment buyers must apply for rebates directly through their utility companies. As mentioned, that requires contacting them or visiting their websites to download and complete required forms. Note: the CEE and Energy Star websites have links to these forms for certain utility companies for easy downloading.

“These forms are a little tricky, but that’s because they are designed to capture all customer information necessary to prove that a) the customer is eligible, b) the product is eligible and c) the customer has all the necessary tax and business information,” says Zabrowski. “Once you get over the fear of the forms, though, they aren’t too bad.”

The reason for the forms and essential “background checks” are that utility companies just want to make sure customers aren’t crossing state lines to buy products in one place to secure higher rebates and then ship them to other locations, according to Zabrowski. “This would be bad for the utilities because they are trying to document energy savings in their territory — if someone buys an efficient product and installs it somewhere else the utility isn’t getting the credit toward their energy-saving goals, which in many cases are required and administered by public utility commissions as a way to give back to tax payers.”

While the West Coast, Midwest and Northeast have pretty standard rebates, some utility companies in the Southeast might be more focused on pushing a certain fuel source, so there may be fewer rebates for electric equipment in those areas, Zabrowski notes. These types of variations depend on the state of energy and fuel sources in the region.

Step 3: Work with Dealer if Possible

On the residential side, customers buying energy-efficient appliances for their home can often receive rebates right upon checkout at big box retailers with little extra work needed.

The reality is that many utility companies around the country can be stretched thin and don’t always have the resources to conduct outreach to educate commercial foodservice dealers on how to navigate rebate programs for their customers. However, some utility companies have begun to work with dealers to offer this rebate-upon-checkout capability, according to Zabrowski.

“In California we’re working on a new model with SoCalGas and PG&E to work directly with dealers to offer rebates for those utility customers when they purchase equipment,” he says. “To be a part of this program, dealers must be in the SolCalGas and PG&E territories, and they have to sign up, but beyond that, utility companies will maintain a list of qualifying participants for commercial foodservice equipment buyers.”

It’s essentially a win-win for both the utility company and the dealer: the utility company passes off their rebates more easily, and the participating dealer can benefit from the sale. Zabrowski points out TriMark Economy Restaurant Fixtures in the Bay area as one participating dealer.

“We’re hoping the model for rebates used throughout the country for residential appliances will make its way to the commercial foodservice sector as more utility companies nationwide get involved,” says Zabrowski.

What’s most interesting, he notes, is there is still no correlation between the amount of the rebate and the participation level. “A high rebate doesn’t mean more people will buy that piece of equipment, but this is because many people don’t know the rebate exists,” says Zabrowski. Working with foodservice equipment dealers helps extend that education to the end-user level. Thanks in part to this program, PG&E, for one, offered 6,000 foodservice equipment rebates last year, he says.

Outside of the dealer community, the Energy Star Commercial Food Service Incentive Guide provides complete contact information for the program managers responsible for incentives so they can offer technical assistance, such as building energy assessments, or educate about incentives for front-of-the-house equipment as well, according to the EPA’s Tomlinson, who, like Zabrowski, also recommends checking with local dealers to find out if they are participating in any utility incentive programs.

The time involved in paying out the rebates depends on the utility company’s program, says Tomlinson.

Step 4: Consider Water Rebates

While energy use reigns as the top rebate area, there has been an increase in water-saving incentives.

“With the drought hitting the West Coast, water utilities are becoming more aggressive with their incentive programs,” Zabrowski notes. There are rebates for high efficiency toilets, low-flow fixtures, aerators, and in terms of larger equipment, for dishwashers and steamers but, again, these vary from utility company to utility company. Energy Star and CEE also maintain lists of rebates for water-saving fixtures and appliances.

Zabrowski recommends the Alliance for Water Efficiency (www.allianceforwaterefficiency.org) as a good resource to search for these incentives.

He points out, however, that some of these water rebates can fluctuate even more than energy efficient ones depending on the state of water availability in the region. Many often require reservations before the application process even begins.

“We still have a lot more work to do when it comes to improving water rebates,” says Zabrowski.

And while the same thing might be said for all rebates, the fact is they’re out there. It’s up to the buyer to find and use them, but the initial savings — not counting those earned by the efficiency of the appliances — can have a positive impact, not only on those capital investments but, ultimately, to the bottom line.