Electric utilities frequently offer cash rebates to growers purchasing efficient grow lights for cannabis. However, it is easy to unknowingly reduce the rebate amount or add time and complexity to the process. Avoid the following mistakes:
Mistake 1: Unreasonable Cash Flow Expectations
Utilities pay rebates for grow lights only after they are installed and operational. Lighting vendors (most often) require payment before manufacturing and shipping lights. This creates a time and financial gap. In most cases you will cover the full price of lights, then wait on shipping, install, and utility inspection and accounting procedures for the check. Based on our project data, the average time between purchasing lights and receiving a rebate check is 84 days, and 139 days between submitting a rebate application and receiving a check.
Do: Anticipate this cash gap and plan accordingly if using short term financing. Reply to utility staff promptly – you want to move this process as quickly as possible.
Mistake 2: Thinking You’re Ready…Before You Are
Buying lights or inviting utility staff for an inspection too early can set you back. One grower paid for lights before their build out was complete. As a result, lights sat in a warehouse and 296 days passed before they received a rebate check. Make sure your facility is ready for lights before purchasing them. Also, your facility needs to be fully functioning before utility staff visits for the final inspection. Although specific utility requirements vary, this may include having adequate power (such as a new transformer), control systems/timers, tables, HVAC, live plants under lights, and an active State Cannabis License.
Do: Buy lights after utility pre-approval, but only when your facility is ready. Understand utility inspection expectations.
Mistake 3: Misinterpreting “Baseline”
Your energy rebate is determined by the cost and consumption of your efficient lights compared to a standard fixture, known as “baseline”. If you already have lights hanging, these are your baseline. However, for new canopy, the utility needs a reference point to understand what lights a grower would have used without their rebate. This is a rather subjective definition, but the baseline you identify will vastly affect a rebate offer. To maximize rebates, the cost and wattage gap between baseline and efficient lights should be as big as possible and believable. Some growers mistakenly report their 2nd choice lights as baseline. However, this mistake will underestimate savings and result in a smaller rebate.
Do: Use a single ended 1,000-watt fixture for baseline in new canopy. Include the energy used by the ballast to determine full baseline wattage.
Mistake 4: Inaccurate Cost Reporting
Figuring out how and what to report for lighting and associated costs can be confusing. Utilities offer rebates for cannabis lamps on a custom basis where a certain rate for energy savings is paid up to a cost cap. Inflating costs or underreporting costs can diminish your rebate – be as precise and accurate as possible. Report what you will pay for lights (not full retail value) and include associated costs when applicable. For all projects include tax, freight charges, and controllers. Some utilities may account for the cost of an energy efficiency consultant if you use one. If you are replacing old lights with efficient ones, include the labor and costs associated with removal and disposal of the old lights or rewiring the room. If you have a new facility, include instillation costs in excess of what you would have spent for standard lights.
Do: Get a final bid from your light vendor and report the actual price you will pay for lights. Include other associated costs when appropriate.
Mistake 5: Incorrect Hours of Use
The number of hours your lights are on each year directly affects rebate calculations; it is important to report the hours your lights are on accurately. As a cannabis grower, expect to be closely monitored by the utility for two weeks to six months. One client forgot to mention they turn off lights four hours each week for spraying. Utility staff caught this gap with routine monitoring and the grower was required to return $3,000 from their rebate.
Do: Think through all aspects of your operations from the perspective of when your lights are in use. Keep veg lights in veg and flower lights in flower. Report all aspects of light use and stick to the plan.