Key Takeaways
Prescriptive and custom rebates are the two primary incentive paths for commercial energy efficiency projects, each designed for different project types and savings structures. Understanding how these rebate programs work allows facility managers and building owners to maximize ROI, reduce upfront costs, and accelerate payback timelines.
What is the difference between prescriptive and custom rebates, and which should you choose?
- Prescriptive rebates offer fixed incentives for standardized upgrades.
- Custom rebates are based on calculated energy savings for complex projects.
- Prescriptive programs are faster and easier to apply for
- Custom programs require pre-approval but often provide higher payouts.
- Many facilities benefit from combining both rebate strategies.
What Are Prescriptive Rebates?
Prescriptive rebates are utility incentives that provide fixed dollar amounts for standardized energy-efficient upgrades with predictable savings.
These programs are designed for common upgrades for which energy savings are well-documented. Utilities assign predetermined incentive values (e.g., per fixture, per unit), making the application process straightforward and fast.
Because of their simplicity, prescriptive rebates are widely used across commercial facilities looking to implement quick, cost-effective improvements without complex engineering analysis.
What Types of Projects Qualify for Prescriptive Rebates?
- LED lighting retrofits replacing fluorescent, HID, or incandescent systems
- Lighting controls such as occupancy sensors and daylight harvesting
- HVAC upgrades like high-efficiency rooftop units
- Refrigeration improvements, including ENERGY STAR equipment
- Variable frequency drives (VFDs) for motors and pumps
- High-efficiency commercial kitchen equipment
These projects qualify because their energy savings are standardized, making them easy for utilities to validate.
Choose the Right Rebate Strategy for Your Project
Prescriptive and custom rebates each offer unique advantages but determining the right path depends on your building, project scope, and energy goals. Understanding which approach delivers the greatest value can significantly impact your total project savings.
Explore our Case Studies to see how Incentive Rebate360 has helped organizations navigate both prescriptive and custom rebate programs to maximize incentive recovery.
When you’re ready, schedule a call with our rebate experts to review your project and determine which rebate strategy is best for your building.
👉 View Our Rebate Recovery Case Studies
👉 Schedule a Call with Our Rebate Experts
What Are Custom Rebates?
Custom rebates are performance-based incentives that reward energy savings from complex or non-standard projects.
Unlike prescriptive programs, custom rebates are calculated based on actual or modeled energy reductions. Utilities evaluate each project individually and assign incentive values based on metrics like $/kWh or $/therm saved.
This approach allows facilities to pursue innovative or large-scale upgrades that don’t fall within predefined rebate categories.
What Types of Projects Qualify for Custom Rebates?
- Advanced building automation and energy management systems
- Large-scale HVAC system redesigns or control conversions.
- Custom chiller and boiler retrofits
- Industrial compressed air system optimization
- Building envelope improvements (insulation, windows)
- Manufacturing or process-specific energy upgrades
These projects require deeper analysis but can deliver significantly higher savings and incentives.
What Are the Key Differences Between Prescriptive and Custom Rebates?
The main difference between prescriptive and custom rebates is simplicity versus flexibility, with each offering unique advantages depending on project scope.
| Category | Prescriptive Rebates | Custom Rebates |
| Incentive Type | Fixed dollar amount | Based on energy savings |
| Application Process | Simple and fast | Detailed and complex |
| Pre-Approval | Often not required | Typically required |
| Project Type | Standard upgrades | Complex or unique systems |
| Payout Potential | Moderate | High |
| Timeline | Short | Longer due to evaluation |
This distinction is critical for planning energy projects and aligning them with the right funding strategy.
When Should You Use Prescriptive Vs Custom Rebates?
Prescriptive rebates are best for quick, standardized upgrades, while custom rebates are ideal for complex, high-impact energy projects.
- Use prescriptive rebates when replacing equipment with widely available high-efficiency alternatives.
- Use custom rebates when implementing system-level changes or innovative technologies.
- Combine both when upgrading multiple systems across a facility or portfolio.
Many organizations maximize savings by layering both approaches across different project scopes.
How Do Utilities Support Both Rebate Types?
Most utility programs offer both prescriptive and custom rebate options to accommodate a wide range of energy efficiency projects.
Programs like the New Jersey Clean Energy Program (NJCEP) allow facilities to:
- Apply prescriptive rebates for lighting and equipment upgrades.
- Pursue custom incentives for advanced system improvements.
- Access financing options such as on-bill repayment to reduce upfront costs
This flexibility enables businesses to build comprehensive energy strategies rather than relying on a single incentive path.
Find the Right Rebate Path for Your Building
Choosing between prescriptive and custom rebates isn’t always straightforward. Each option has different requirements, timelines, and potential savings, making it important to follow a structured approach to maximize incentives.
Review Our Process to see how Incentive Rebate360 evaluates projects, identifies the best rebate path, and manages submissions from start to finish.
When you’re ready, schedule a call with our rebate experts to discuss your building and determine whether a prescriptive or custom rebate will deliver the greatest value.
👉 Review Our Rebate Recovery Process
👉 Schedule a Call with Our Rebate Experts
Frequently Asked Questions
Do Prescriptive Rebates Require Pre-Approval?
Prescriptive rebates often do not require pre-approval, allowing faster project execution, though requirements vary by utility.
Are Custom Rebates Worth The Extra Effort?
Yes, custom rebates typically offer higher payouts because they are based on actual energy savings, making them valuable for large or complex projects.
Can You Combine Prescriptive And Custom Rebates?
Yes, many facilities use prescriptive rebates for standard upgrades and custom rebates for advanced systems to maximize total incentives.
How Are Custom Rebates Calculated?
Custom rebates are calculated based on projected or measured energy savings, typically expressed in dollars per kWh or therm saved.
What Is the Biggest Risk with Rebates?
The biggest risk is missing eligibility requirements or deadlines, which can result in lost incentive opportunities.
Conclusion
Choosing between prescriptive and custom rebates is not about selecting one over the other; it is about aligning your energy strategy with the right incentive structure. Prescriptive rebates provide speed and simplicity for common upgrades, while custom rebates unlock deeper savings for complex, high-impact projects.
For most commercial facilities, the strongest approach is a combined strategy that captures immediate savings through prescriptive programs while pursuing larger, long-term gains through custom incentives.
Incentive Rebate360 helps organizations navigate both prescriptive and custom rebate programs, ensuring no opportunity is missed and every project is optimized for maximum financial return. Contact the team at 480-653-8180 or [email protected] to identify and secure the incentives available for your next project.
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