Businesses and property developers planning new construction projects in Puget Sound Energy (PSE) territory can take advantage of a valuable opportunity to cut upfront costs and improve long-term energy efficiency. PSE New Construction rebates offer flexible, performance-based financial incentives for energy-saving improvements in commercial and multifamily buildings.

Whether you’re designing a commercial facility or a multifamily development, understanding how to qualify for and maximize these rebates can lead to substantial savings on your construction budget.

What Are PSE New Construction Rebates?

PSE’s Commercial and Multifamily New Construction rebate programs provide financial incentives based on predicted or measured energy performance. These incentives are calculated according to the amount of electricity (kWh) and natural gas (therms) a building saves compared to a baseline standard, such as local energy codes or typical industry practices.

There are several grant estimations approaches available depending on the project’s scope and design method:

EUI Performance Method: Based on whole-building energy use intensity (EUI) as measured by 12 months of metered consumption. Offers $0.45 per annual kWh and $8 per annual therm saved, with no maximum cap.

Energy Modeled Whole Building: This approach compares your proposed design to a code baseline using energy modeling. The incentive remains the same, $0.45 per annual kWh and $8 per annual therm, with no limit on total grant amount.

Lighting Power Density (LPD) Reduction: Projects that exceed Washington State Energy Code (WSEC) lighting efficiency by at least 5% can earn $0.30 per annual kWh saved. There’s also a bonus for using interior Luminaire Level Lighting Controls (LLLC) fixtures. Note that TLEDs are not eligible under this method.

Custom Component Approach: For projects that include innovative systems or non-standard equipment, PSE offers up to 100% of the incremental cost for energy efficiency improvements beyond current codes or standard practices, using the same incentive rates of $0.45/kWh and $8/therm.

Multifamily Rebates and Affordable Housing Bonus

Multifamily properties are also eligible under the PSE New Construction rebates program, provided they include four or more attached units and are located within PSE’s electric and/or gas service areas. These can be purely residential or mixed-use developments.

Incentives for multifamily buildings are also calculated based on whole-building performance, with rates set at $0.45 per annual kWh and $8 per annual therm. However, projects that qualify as affordable housing receive a 50% bonus multiplier, raising the incentive rates to $0.68 per annual kWh and $12 per annual therm.

To qualify for the affordable housing bonus, developments must meet Washington State Housing Finance Commission standards, including:

Renting at least 40% of units to residents at or below 60% of the Area Median Income (AMI)

Or 20% of units to residents at or below 50% of AMI

Or use income averaging to keep the project’s average income below 60% of AMI

Documentation, such as a regulatory agreement or a commission approval letter, is required for verification.

Eligibility Requirements and Application Process

To be eligible for PSE’s Commercial or Multifamily New Construction rebates:

Your project must be located within PSE’s electric or gas service area.

The property must serve commercial, industrial, or qualifying multifamily use.

The project must be in the design or construction phase.

All projects must be reviewed and pre-approved by PSE before the installation of energy-efficient measures.

Final Thoughts

PSE New Construction rebates are designed to support smart energy investments from the ground up. By aligning your project design with PSE’s program guidelines, you can reduce both construction costs and long-term utility expenses, especially for multifamily developments and affordable housing projects that qualify for additional bonuses.