Article by:
Nikki Chi
March 1, 2023
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California LED Lighting Incentives and Benefits for Multifamily Communities

If you’re considering solar for your multifamily community, then it’s a great time to analyze your energy efficiency. Adding solar panels to your property is one step in the right direction of energy savings, but reducing your overall energy needs by improving your energy efficiency should be your first step. One of the easiest ways to do that is to retrofit your community lights with LED light bulbs. There have been major innovations in the light bulb space since the original incandescent bulb. In fact, studies have found that just switching to LEDs can save you 20%-30% on your annual operating costs. This valuable energy-saving measure has many rebates and incentives to help cover the cost of your LED lighting project.

How Much Energy Do LED Lights Save?

LED lights maximize your solar power usage because they use less electricity, freeing up solar power to be used for other things. In comparison to other common lighting options, LEDs use:

  • 80% less energy than incandescent bulbs
  • 80% less energy than high-intensity discharge (HID) bulbs
  • 75% less energy than halogen bulbs
  • 20% less energy than compact fluorescent (CFL) bulbs

Additional Savings

A secondary benefit of LED lighting is that they last considerably longer than other lighting options. The comparison to the lifespan of an incandescent bulb is especially shocking. Here’s how LED lifespan measures up:

  • 42 times longer than incandescent bulbs
  • 13 times longer than halogen bulbs
  • 5 times longer than CFL bulbs
  • 3 times longer than HID bulbs

This means you’re not only saving on electricity, but also you’re buying fewer replacements and saving on maintenance labor.

LED Lighting Incentives

California has its sights set high with a goal of 100% renewable energy by 2045. Energy-efficient upgrades and multifamily solar are key components to reaching that goal. So, there are many state, regional, and utility-provided incentives and rebates for various projects, including switching to LED light bulbs. Because LED lights and other upgrades require a capital investment, it’s wise to check with your local utility for any incentive or rebate programs to reduce the cost for your community. While we can’t list every incentive here due to the large number of utilities throughout the state, below are the top three LED lighting incentives to get you started.

California Energy Design Assistance (CEDA) Program

CEDA offers free energy design assistance, as well as incentives for commercial, industrial, public, agriculture, and high-rise multifamily new construction or early design stage projects. If your property is eligible, they provide custom energy modeling to help your design team. Then, they support the implementation of the energy-efficient design by guiding you to the appropriate incentives to reduce your cost.

Southern California Regional Energy Network (SoCalREN) Multifamily Program

SoCalREN provides both technical assistance and financial incentives for energy-efficient upgrades to multifamily properties. Their incentives are not limited to LED lighting, as they support retrofits that reduce both electric and natural gas usage. In 2019 alone, they paid over $7.1 million in incentives to multifamily property owners, resulting in energy-efficient upgrades impacting 13,740 units in the region.

Los Angeles Department of Water and Power (LADWP) Commercial Lighting Incentive Program (CLIP)

LADWP’s CLIP incentive applies to business customers with an average monthly energy demand over 200 kW (kilowatts) with a lighting retrofit that will save at least 10% of that electricity. The incentive covers up to 100% of the project cost with rates ranging from $0.08 to $0.24 per kWh (kilowatt-hour) of annualized energy savings.

Outdated Light Bulbs Leave Money on the Table

Considering the wide availability of LED lighting incentives and the fact that the LADWP program alone covers up to 100% of the project cost, switching to LED lighting is a very low-risk upgrade for your multifamily property. Not only will you reduce your utility bill and the bills of your residents, but also you may recover a large portion of your investment thanks to incentives. Furthermore, whether you already have solar or plan on adding it in the future, reducing your electricity demand will maximize your renewable energy benefits.

As environmental, social, and governance (ESG) becomes even more of a must-have for real estate portfolios, you may also want to explore other energy-efficient upgrades for your property. Click here to learn more about the many multifamily incentives included in the recent Inflation Reduction Act.