Rebates

4. Purpose of Residential Rebates. Participants in the residential sector panel commented that rebates serve multiple purposes including: to reduce the cost of energy-efficient products; to help close sales; to build "off-season" sales; to induce retailers to increase their dedication of floor space to energy-efficient products; to help shape future product investment by manufacturers and permanently increase the percentage of "Energy Star" or high-efficiency products on the market; and to introduce and educate consumers about energy-efficient options. A) Are there additional purposes that rebates serve? B) Which of these purposes do you think are most important to support with ratepayer funds? C) What is the best rebate program design and administration model to accomplish any or all of the important purposes? D) Would it be better for the State to raise the minimum efficiency levels required for new equipment and appliances sold in California, and spend less money on rebate and promotion programs? E) Should the commission become involved in specifying the design* of rebate programs or give administrators the choice of rebate designs, while at the same time requiring more rigorous evaluation of rebate programs? F) How should the Commission measure or evaluate the effectiveness of rebate programs?

5. Purpose of Commercial and Industrial Rebates. Some panelists from the commercial and industrial sectors suggested that rebates are often not the best strategy for encouraging efficiency investments in this sector. They stated that cash rebates are often not the determining factor in a company's decision to pursue an energy efficiency upgrade project, and that the project must meet internal financial considerations regardless of PGC funding. One participant recommended that rebates be applied only to projects that would not otherwise receive internal investment approval. Other panelists commented that limits on the size of rebates (by site and by corporation) prevent incentives for "big ticket" investments. Still another panelist suggested the State require that all new motors sold in California be more efficient than current standards require. How can the Commission encourage administrators to develop more effective " rebate" approaches for this sector? How can commercial and industrial programs be structured so that rebates have a stronger influence on capital investments and actually stimulate more efficiency upgrades and savings by the private sector? Would it be better for the State to raise the minimum efficiency levels required for new electrical or thermal equipment sold in California, and spend less money on rebate and promotion programs?

6. Many participants commented that the CPUC places too much attention on hardware rebates, and should instead reward results, with recognition of the value of non-hardware actions such as diagnostics, behavior, process-change, and commissioning. What other forms of incentive or reward (financial, service, or public recognition) could be more effective?

7. Split Incentives. Some residential and business participants identified split incentives between tenants and landlords as a significant barrier to energy efficiency investment. What types of programs should be designed to deal with this barrier? How can the Commission encourage program administrators to come up with more innovative approaches to deal with this problem? For both the residential and non-residential rental sectors, how should the Commission contend with the split incentive dilemma with respect to landlords and tenants when deciding upon energy efficiency rebate programs?