What are cost caps, and how they affect your rebate program?

Many people get disappointed when they see a high advertised rebate amount getting a much smaller rebate than expected.

This inconsistency can happen due to cost caps. On most of the rebate applications in North America, there is a cap of how much of the cost can be covered. This way, rebate programs make sure that the customers contribute a fair amount towards the lighting.

We have done detailed research and analysis of cost caps using our RebatePro tool to see its impact on the actual rebate amount.

Cost caps are based on two costs- Material costs and project costs

Cost caps are based on either material costs or project costs. According to our research, 37% of the rebate programs have cost caps based on material costs, whereas the remaining 63% of the cost caps are based on project costs.

In some cases, the program allows you to include the internal costs in the project costs with proper documentation.

How much cost do they cover?

There are a lot of distributors and contractors who are looking for a golden opportunity to sell lighting to their customers and have rebates pay for all of it.

However, this is not common anymore, as only 8% of the programs cover up 100% of the total project costs. Other common cost caps are 100% material costs and 50% of the project costs. Note that these are just the cost caps, the rebate will not exceed the determined incentive amount.

What is the impact of cost caps on the rebate amount?

If you see a rebate program showing $15 per LED tube, make sure that you read all the fine print going along with it. The actual rebate might be lower.

What are midstream rebates and caps?

Midstream rebates are the incentives offered directly through a distributor, and it usually operates differently. These programs use minimum customer contributions rather than the percentage of costs.

For example, the utility may offer a midstream rebate of $10 per fixture, but it requires the customers to contribute a minimum of $5 after the incentive.

How to understand the cost caps?

Cost caps play a significant role in the final rebate amount of your project. If you are working on a project, you must read the fine print and understand the cost caps completely.

If you have any doubts or questions regarding this, you can always reach out to us for assistance. We will help you out.

If you are a distributor or contributor and are looking for the best rebates in the country, you must be aware of the cost caps as well.

The top rebates report in the RebatePro makes it easy for you to identify the best rebate programs in the area by taking into account all the factors.

Final Words

Talk to us about your project, and we will help you identify the best rebate programs.

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