Unintended Benefit: Utility Incentives Drive Smart Building Technology Adoption

It’s no secret that utility incentives play a role in underwriting many energy efficiency projects in North America. With ever-increasing energy requirements, efficiency incentives are frequently used by utilities to help customers implement measures that reduce overall demand. While it may seem counter-intuitive that the entities that are selling power are helping customers use less of it, the reason is simple. It is far less costly to reduce energy consumption than to build additional generation capacity – coal, nuclear, wind, or otherwise.

A not-so-well-known element of those programs was recently identified in a market forecast from analyst group IDC. In IDC Energy Insights Predictions 2013: North American Utilities, research analyst Casey Talon says that, “in 2013, utility incentives will drive $160M in smart building technologies, ensuring energy efficiency is here to stay.”

For utilities, “smart building” technology deployment isn’t the goal of the programs; load reduction is. The happy accident is that these smart building technologies are being dragged along by the efficiency programs, delivering both near- and long-term benefits. In the near-term, customers and utilities benefit from reduced energy use. In the long-term, these steps toward a smart building infrastructure enable ongoing efficiencies and improved operations.

Our customers’ experiences underscore IDC’s predictions as our end-users are not necessarily looking for smart building technology, either. They want energy-efficient lights that reduce electricity bills, lower peak-load charges, offer rapid project payback, and deliver an attractive return on investment (ROI). They get their money’s worth, with excellent light and compelling savings, with smart building technology included. That smart system enables higher levels of energy savings and a host of new capabilities that provide additional dividends in the installations for years to come.

While $160M is a drop in the utility incentive bucket valued at hundreds of billions of dollars, it is an early indicator of things to come. And, we – along with the rest of the smart building industry – appreciate that these dollars are delivering significant savings to our customers in addition to long-term benefits.

Michael Feinstein is vice president of sales and marketing for Digital Lumens. If you’re interested in reading more on the IDC Energy Insights Predictions for 2013, here is the link to the Press Release overview. To access the replay of IDC’s Prediction presentation, please visit http://bit.ly/EI_Predictions2013_Utilities. For more information on commercial and industrial utility incentive programs in your area, please see the DSIRE database or contact Digital Lumens directly.

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