Reincentivizing Oilheat

On December 31, 2016, the last of the remaining Residential Energy Efficiency Tax Credits for furnaces, boilers and water heaters expired. The federal tax credit program, which applied to qualifying, ENERGY STAR® certified home heating systems, has been renewed several times in the past. However, with the House of Representatives’ spending bill proposing to cut ENERGY STAR funding by as much as $35 million (66% percent), it seems increasingly unlikely, at least in the current political environment, that the tax credits will be brought back anytime soon.

And even if they were, the question remains: “How much good are they really doing for homeowners?”

In their latest incarnation, the Residential Energy Efficiency Tax Credits awarded $150 for the installation of a boiler or furnace and $300 for a water heater — and only if the new equipment met stringent energy efficiency standards: 95 AFUE for a boiler or furnace and .82 EF for a water heater. These ratings essentially excluded all but the most cutting-edge heating systems, many of which remained out of budget for the average homeowner even when factoring in the tax credit. Also excluded were almost all oil-fired heating systems.

With fewer and fewer tax credits being awarded for high-efficiency, oil-fired boilers and furnaces, it fell upon state and regional trade associations to fill the gap. The Upgrade & Save Energy Efficiency and Safety Rebate Program has allowed them to do exactly that. Administered by state and regional associations in partnership with integrated marketing communications firm PriMedia, Inc. and the National Oilheat Research Alliance (NORA), Upgrade & Save programs have been running since early 2016. Though rules and rewards vary from region to region, the program generally offers consumers rebates of hundreds of dollars for the installation of a high-efficiency, oil-fired boiler or furnace and/or an aboveground oil storage tank.

The Players
Upgrade & Save programs are currently running in New York, Pennsylvania, New Jersey, Connecticut, Rhode Island and Virginia. The latest state to come on board, North Carolina will begin offering its Upgrade & Save program in September 2017.

New York, which consumes more heating oil than any other state in the country, has four separate programs running, each of which is administered by a different regional association: Upgrade & Save Long Island is administered by the Long Island-based Oil Heat Comfort Corp. (OHCC), Upgrade & Save NYC is administered by the New York Oil Heating Association (NYOHA), Upgrade & Save Hudson Valley is administered by the Hudson Valley Oil & Energy Council (HVOEC), and Upgrade & Save Upstate New York is administered by the Upstate New York Energy Association (UNYEA).

Other associations offering Upgrade & Save programs include the Fuel Merchants’ Association of New Jersey, the Oil Heat Institute of Rhode Island, the Connecticut Energy Marketers Association (CEMA), the Virginia Petroleum, Convenience and Grocery Association, the North Carolina Petroleum & Convenience Marketers, and in Pennsylvania, the Delaware Valley Fuel Dealers’ Association, Chester County Fuel Dealers’ Association and South Central Pennsylvania Energy Association. As the programs are NORA-sponsored, they are open to all members of the participating state and regional associations, as well as all non-members serving the same areas.

The Percentages
As of July 25, 2017, a total of 2,680 Upgrade & Save rebates have been processed industry-wide. Of these, 1,891 rebates have been awarded for high-efficiency, oil-fired boilers and furnaces, and 789 rebates have been awarded for new aboveground oil storage tanks. These rebates have been processed by a total of 404 participating Oilheat dealers.

Industry-wide, the average boiler that is replaced is 33 years old and has an efficiency rating of 73.19%. The average efficiency of the replacement boilers is 85.59%, a 12.4% improvement over the older models. The average furnace that is replaced is slightly newer, at 28 years old, and has an efficiency rating of 73.32%. The average efficiency of the replacement furnaces is 84.95%, an 11.63% improvement over the older models.

The average underground or aboveground storage tank that is replaced is 37 years old.
On Long Island, where Upgrade & Save has been running longer than anywhere else, a total of 1,004 rebates have been awarded: 650 for furnaces and boilers and 354 for aboveground storage tanks. There, the average boiler that is replaced has an efficiency rating of 70.64%, and the average efficiency of the replacement boilers is 85.42%, a 14.78% improvement. The average furnace that is replaced on Long Island has an efficiency rating of 70.81%, and the average efficiency of the replacement furnaces is 84.41%, a 13.6% improvement. Across the Island, 33 companies have participated in the program to date.

The Portal
Each Upgrade & Save program is supported by an online portal, where Oilheat dealers can register to participate in the program, review program rules, submit rebate requests, keep track of available rebate funds, and download free marketing materials for use in newsletters, on websites and in other customer communications. Because each rebate portal is mobile friendly, participating companies’ sales professionals and installation technicians are able to review the program with customers while out in the field and can even sign them up on the spot.

The online portals are designed for ease of use and to expedite the rebate submission-review-approval process. Whereas in the past, Oilheat dealers might have had to fill out a form by hand, then fax or mail it to their state or regional association, and wait for their submission to be reviewed and approved, now rebates can be processed and approved in seconds, so the dealer can begin work on the installation right away, and the customer can collect their rebate shortly after the job is finished. Depending on the program, rebate checks are sent either to the association, to the participating dealer, or direct to the consumer.

Another benefit of the online rebate portal is one that consumers will most likely never think about, though it affects them too in the long run. Because all rebates are processed online, all of the program’s statistics are stored in one central location and can be used to demonstrate the success of the program when NORA is next up for congressional review. Additionally, since association leaders can track which companies are using the program and which aren’t, rebate funds can be re-allocated each year in accordance with dealer participation.

The Point
Shortly after PriMedia first rolled out Upgrade & Save in early 2016, Oil & Energy reached out to NORA President John Huber to get his feedback on the then-new rebate program. “For dealers, it’s a key arrow to keep customers they might have lost,” he said. “Helping people improve the efficiency of their system either by upgrading their boiler or furnace, or even adding a thermostat, is a key goal of NORA’s, so having a way to have that goal met is exciting.”

Some 16 months later, with over 2,500 Upgrade & Save rebates processed industry-wide, Huber’s words ring truer than ever. As more and more consumers take advantage of the incentives Upgrade & Save provides, excitement about the program continues to grow among Oilheat associations, dealers and consumers.

Reached for comment, CEMA President Chris Herb spoke enthusiastically about the benefits of Upgrade & Save CT. “Connecticut’s Upgrade & Save Program has been a resounding success by effectively helping the industry encourage their customers to move to high-efficiency Oilheat equipment and replacing fuel tanks,” he told Oil & Energy, adding, “The program delivers on the NORA promise to promote safety, efficiency, lower emissions and Oilheat!”

And that, of course, is the whole point.

To get involved in the Upgrade & Save Energy Efficiency and Safety Rebate Program, contact PriMedia Creative Director John Bruno at 800-796-3342 or visit PriMedia online.

Pin It

Comments are closed.