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New Con Edison Incentives Make Commercial And Industrial HVAC Upgrades A Better Investment

A water-cooled chiller

Con Edison is enhancing its incentives for commercial and industrial customers that make HVAC upgrades with two program offerings.  

The first is the Prescriptive Rebate Program, which offers cash incentives for the installation of standard energy-efficient equipment, including HVAC such as furnaces, boilers and chillers.

The second option offers incentives for custom upgrades of $0.16 per kilowatt hour saved plus an additional $600 for each kilowatt of energy reduction. These HVAC upgrades will also benefit from Early Replacement and Extended Life offerings, designed to encourage owners to replace outdated equipment with more efficient models before they break down. 

The incentives will encourage owners to consider high-efficiency HVAC upgrades and custom measures that would otherwise be too expensive, Con Edison Program Manager Caitlin Prager said. Unlike LED lighting, which is a more accessible, affordable and frequent improvement, HVAC upgrades happen less often and at a higher cost to property owners.

Incentives encourage owners to choose more efficient equipment. 

“Commercial customers don’t upgrade their HVAC equipment as frequently as lighting, but when they do, it’s a major investment,” Prager said. “We need to get the attention of the customer and the market partners when the customer is ready to make that investment.”

Con Edison’s Commercial and Industrial Energy Efficiency Program is for properties averaging peak demand over 100 kilowatts. All large commercial customers, including office buildings, schools and hospitals can benefit from the incentives. Multifamily residential buildings are covered by a separate program.


New Approach Means Greater Incentives

With Early Replacement and Extended Life offerings, owners can take advantage of the former when HVAC equipment is replaced before the end of its effective useful life. For chillers, which on average last 20 years, the replacement age would have to be less than 19 years old. Useful life varies across equipment.

After receiving backup documentation, Con Edison will pay an incentive on the difference between the existing chiller and the energy savings achieved with a newer, more efficient model. 

Extended Life has a similar policy. For buildings with HVAC equipment 125% beyond its effective use life, owners who opt for a more efficient replacement will receive an incentive payment on the full spread of the savings. 

The two offerings mark a change in the way Con Edison approaches HVAC upgrades. Historically, incentives were rewarded based on the difference between a baseline code for the equipment and the more efficient product. This did not always represent the true savings owners would earn by upgrading outdated HVAC and it limited incentive payments. 

“We are responding to feedback from our customers,” Prager said. “In reality, they are taking equipment that is way below code and looking for help to replace it with a more efficient product. We want our incentives to fully reward customers for the energy savings they’re achieving.”

Both offerings, and the added custom measure incentives, are part of Con Edison’s plan to encourage customers and their market partners to consider HVAC replacement before equipment breaks down. Incentives allow people to look at more efficient models, Prager said. 

By significantly increasing its HVAC incentives and offerings, Con Edison is signaling it is committed to making energy efficiency feasible and desirable. 

“We’re making our HVAC incentives richer to make it more attractive for these large customers to invest in new equipment,” Prager said. “We all benefit from these investments. The customer gets lower bills and contributes to a cleaner environment. We all have a role to play in helping New York City and New York state meet their environmental goals.”

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