LG&E and KU commercial rebates provide cash incentives for qualifying energy-efficiency improvements at eligible Kentucky businesses. The Business Rebates Program supports lighting, HVAC, compressed air, commercial food service equipment, and other upgrades in existing facilities. Certain new construction and major renovation projects can also qualify when their energy performance exceeds applicable building codes.

For facility managers and business owners, the first step is matching the proposed improvement to the correct incentive category. Some rebates pay a fixed amount per fixture or equipment unit, while others depend on calculated energy savings and peak demand reductions.

Key Takeaways

Customer eligibility, equipment specifications, and application requirements determine which incentives a project can receive.

• Eligible LG&E and KU commercial and industrial electric customers must participate in the utilities’ Demand-Side Management cost recovery mechanism.
• Prescriptive rebates cover specified lighting, HVAC, compressed air, and food service improvements.
• Custom incentives can support qualifying refrigeration, industrial process, and other projects not covered by the listed prescriptive measures.
• Energy audit rebates cover 25% of audit costs, up to $3,000, when submitted with another qualifying rebate category.
• Incentives cannot exceed 75% of eligible project cost, and funding remains subject to availability.

Who qualifies for LG&E and KU business rebates?

Commercial and industrial customers paying into the Demand-Side Management, or DSM, mechanism can apply. A Kentucky business address alone does not establish eligibility; the facility must have a qualifying utility account.

LG&E serves Louisville and 16 surrounding counties, while Kentucky Utilities serves 77 Kentucky counties across central, southeastern, and western Kentucky. Local examples include Louisville (Jefferson County), Lexington (Fayette County), and Richmond (Madison County). Businesses must verify their actual electric provider because service boundaries do not necessarily cover an entire county.

LG&E gas-only customers are ineligible. Industrial customers who previously opted out of DSM may opt back in, but qualifying project and application dates must follow the appearance of the DSM charge on their utility invoice. Customers who opt back in must remain enrolled for at least three years.

For the incentive cap, project costs exclude internal labor and must be reduced by other grants or incentives received.

Does LG&E offer commercial lighting rebates?

Yes. LG&E lighting rebates and Kentucky Utilities lighting rebates cover specified interior and exterior LED upgrades, along with eligible interior lighting controls.

The August 2026 program fact sheet lists these representative incentives:

Confirm the exact product’s required ENERGY STAR certification or DesignLights Consortium qualification before purchasing. General service lamp lighting is excluded from the interior lighting category, and controls connected to exterior lighting do not qualify for the listed control incentive.

Replacing 100 qualifying 400W high bays would produce a preliminary prescriptive rebate of $5,000. Final payment depends on eligibility, documentation, and the project-cost cap.

What commercial HVAC incentives are available?

LG&E HVAC rebates and KU incentives include qualifying smart thermostats, chillers, chilled-water reset measures, and chiller tune-ups. Commercial HVAC incentives also include eligible variable frequency drives, which adjust motor speed to match operating needs.

IEER measures cooling efficiency across different operating loads. Water-cooled chiller eligibility depends on equipment size and specified partial-load efficiency.

Chilled-water reset incentives range from $100 to $2,000 per unit, depending on chiller type and capacity. These measures adjust chilled-water temperature to reduce energy use under appropriate operating conditions.

The program does not provide a blanket rebate for every commercial HVAC replacement. Confirm the equipment category and performance criteria before including an incentive in the project budget.

Are air compressors eligible for LG&E and KU incentives?

Yes. Compressed air rebates support qualifying equipment upgrades and system improvements. Eligibility for several measures depends on system horsepower (hp).

Examples include:

• Leak repairs on systems totaling ≥15 hp: $75 per repaired leak.
• High-efficiency nozzles replacing standard open blow-off nozzles: $20 each.
• No-loss condensate drains: $75 each.
• Qualifying compressor or vacuum-pump variable speed drives rated 15–150 hp: $45 per hp.
• Reduced discharge pressure: $50 per psi reduction.

A qualifying 50 hp compressor with an integrated variable speed drive could receive a preliminary $2,250 incentive. System sizing and operating conditions still matter; installing a variable speed compressor does not automatically establish eligibility.

Does the program cover food service and refrigeration upgrades?

Commercial food service rebates cover specified ENERGY STAR-certified equipment, including electric convection ovens, combination ovens, and hot food holding cabinets.

Listed incentives include $85 for an electric convection oven with at least three pans, $300 for a combination oven with 3–14 pans, and $600 for one with more than 14 pans. Qualifying holding cabinets receive $55 or $165, depending on capacity.

Commercial refrigeration upgrades may qualify through the custom category. Refrigerated display lighting has a listed prescriptive incentive, while broader refrigeration improvements require project-specific evaluation and savings calculations.

How do custom, construction, and audit incentives work?

Custom incentives cover qualifying improvements not available through other incentive options. Examples include refrigeration upgrades, energy recovery, HVAC controls, energy management systems, and industrial process improvements.

The calculation is $0.03 per first-year kilowatt-hour (kWh) saved and $100 per kilowatt (kW) of peak demand reduction. A project saving 100,000 kWh annually and reducing peak demand by 20 kW would produce a preliminary $5,000 incentive before applicable limits.

The fact sheet recommends preliminary utility review before purchasing custom-project equipment but does not require it.

New construction and major renovation incentives cover qualifying lighting, HVAC, and building-envelope improvements. Applicants must provide COMcheck-WEB results, with incentives calculated using the same energy-and-demand rates. A separate LEED pathway offers $2,000–$10,000 based on qualifying Energy and Atmosphere points and building size.

Energy audit rebates require an audit report, invoice, proof of payment, and an application submitted alongside another qualifying rebate category.

Frequently Asked Questions

Can a thermostat receive both an Online Marketplace rebate and a Business Rebate?

No. A smart or learning thermostat that received an instant Online Marketplace rebate is ineligible for the Business Rebate thermostat incentive.

How often can the same chiller receive a tune-up rebate?

The rebate is available once per 18-month period for each chiller. New construction projects are ineligible for this incentive.

Are operational adjustments eligible without replacing equipment?

Certain retro-commissioning measures can qualify at $0.05 per first-year kWh saved. Examples include optimizing economizer controls, resetting system pressures, and improving equipment schedules.

How should businesses plan and submit a rebate project?

Follow these four steps to organize the project and application:

1. Verify account eligibility. Confirm the facility’s electric provider and DSM participation before budgeting for a rebate.
2. Review the incentive pathway. Match the project to the applicable category, request preliminary custom-project review, and confirm the filing deadline and whether it runs from purchase, invoice, installation, or completion.
3. Install qualifying equipment and preserve records. Retain model numbers, product specifications, itemized invoices, proof of payment, and installation dates.
4. Submit a complete application on time. Include required savings calculations or construction documentation. Submit an energy audit rebate alongside another qualifying rebate category.

Contact Incentive Rebate360 before purchasing equipment to review your Kentucky facility’s eligibility, estimate available incentives, and coordinate the documentation and submission process. To contact us call 480-653-8180, email [email protected], or schedule a call at a time that works for you.