The Real Reason Your Utility Co. Wants to Pay YOU - A.J. Perri NJ HVAC Skip to content

Why Does Your Utility Company Want to Give You Hundreds of Dollars?

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It’s no secret that we all need to be more energy efficient, both to save money and be more environmentally friendly; the big surprise is that the utility companies actually want to pay you to do so.

If it seems strange for companies that are in business to make a profit to want consumers to use less of their product and thereby save money, the explanation is somewhat simple: The utility companies cannot keep up with demand.

Our demand for energy, whether it is oil, gas,
or electricity, goes up every year.  This is increasingly  true when harsh weather conditions like we have seen for the past 18 months call for the heavy use of heating and air conditioning.  The problem with that is energy companies have not upgraded their power plants to keep up with these growing demands.

So, what’s a utility company to do?  They can invest hundreds of millions of dollars in infrastructure improvements…or give homeowners a rebate when they install high-efficiency equipment to greatly reduce the amount of energy they consume.  And since residential heating and cooling systems account for nearly half of energy consumption in the U.S., it’s easy to see why companies are so eager to help replace them with more efficient models.  While it seems as if this will cost the utility company a lot of money, it is still a lot less expensive than upgrading their infrastructure.

Also, the federal government continues to raise efficiency standards on new heating and cooling equipment. Right now, utility companies want you to install this new, high-efficiency equipment while the older, less-efficient equipment is still available.  As an incentive to get you to move forward with the upgrade, they are offering rebates that help neutralize the price between high- and mid-efficiency equipment.

However, these rebates will not be around forever.  As soon as it’s prohibited by law to install less-efficient models at the beginning of 2015, these rebates will disappear.  And, any consumer who installs the equipment at that point will have missed out on all the rebates while paying a lot  more than if they had simply been proactive NOW.

If you have a home that was built during the peak new-building years of 2002-2006, you may want to consider that heating and cooling equipment has an estimated lifespan of about 8-10 years.  If your home is one of the hundreds of thousands built during that time, you should have your equipment inspected to find out how much longer it’s expected to last. You may want to proactively install new equipment.  If you don’t, you may be kicking yourself come next January.

A high-efficiency heating and cooling system, once you spend that rebate check, will continue to save you money every month on your utility bills because you’ll use less energy.  While you’re helping your utility company keep infrastructure costs low, you get some extra cash in your pocket and the knowledge that you’re helping the planet by reducing greenhouse gasses.

SOURCE:, Dept. of Energy, EnergyStar