PURPOSE

To request City Council support of Burbank Water and Power�s proposed residential rebates for solar attic fans and ceiling fans. 

BACKGROUND

On September 16, 2003 BWP staff updated the City Council on the utility�s Public Benefits programs.  At the same time, staff also presented new program and project proposals, all of which were Council approved, save one.  That proposal was to built a solar photovoltaic carport installation.  It was Council�s opinion that the funds required for building such a project could be better utilized by supporting the purchase of solar attic fans.  Council�s recommendation was for the utility to offer more substantial rebates to help promote these environmentally friendly products.  The merits of whole house fans were also discussed during this Council meeting. 

ANALYSIS

The City Council�s request was for BWP to set a rebate amount that could serve as a purchase inducement for solar attic fans by Burbank residents.  Staff stepped back and thought about what the underlining goal was.  We believe that the consensus goal of the Council was to provide a perhaps more practical and less costly application of active solar technology than the typical large array panel projects.  Solar attic fans are one product line that can serve this goal. 

Beyond the desire to introduce affordable active solar technologies in Burbank, there is a second goal that is addressed with solar attic fans.  That goal is to help our residents use less air conditioning without sacrificing comfort.  There are other products that also achieve this goal.  As discussed in the September 16 Council meeting, whole house fans provide an impressive ability to impact air conditioning use.  Likewise, ceiling fans accomplish this same goal with limited purchase, installation and operation costs.

BWP currently offers rebates on solar attic fans and whole house fans.  Burbank residents purchasing solar attic fans receive utility rebates of $50 or $100, depending on if the fan costs under or over $500, respectively.  (Rebate amounts for products included in BWP�s Home Rewards rebate program are determined by two factors: the amount spent on the product and if it was purchased from a Burbank retailer or not.  Purchases made from Burbank retailers receive double rebates.  The one exception to this rule is that all solar attic fans purchased receive the in-Burbank rebate amount.)  Whole house fan purchases are rewarded with $50 or $25 rebates.  The higher rebate amount is awarded to residents who purchase the product from a Burbank retailer. 

Rebates offered by Surrounding Communities

Research of residential rebates offered by surrounding utilities reveals that precedent has been set by several other cities.  The following table shows this rebate information.

*   BWP offers double rebates for approved items purchased from Burbank retailers.

** Pasadena offers increased rebates for approved items purchased from Pasadena retailers.

Pricing Research

BWP staff also conducted pricing research on these products.  We visited Lowe�s, OSH, and the Great Indoors and went on-line as well.  The following prices are for product only.  Installation costs were not evaluated as those vary dramatically from the virtually non-existent costs for do-it-yourself installer to premium priced professional installers. 

Solar attic fans tend to cost from $300 to $500.  Whole house fans run about $175 to $200.  Ceiling fans have the broadest price range, from a low of $30 and a high of $1,500.  However, the average price for ceiling fans tends to run from $100 to $200. 

Solar Panel Alternative

Council had mentioned rebate amounts of 50% of the purchase price for solar attic fans.  Staff agrees that such a rebate should certainly help in the marketing of these products!  Given that direction and our pricing research, staff recommends increasing the rebate amount for solar attic fans from a current price-dependent rebate of $50 or $100 to an across-the-board rebate of $200.  The rebate would apply to any solar attic fan permanently installed in a Burbank home regardless of where the purchase was made.  With typical product costs of $300 to $500, the recommended solar attic fan rebate amount provides a huge purchase incentive, 40% to 67% of the product cost. 

Addition to Home Rewards

Staff recommends that ceiling fans be added to BWP�s list of approved Home Rewards Rebate Program products.  Ceiling fans with or without attached lighting fixtures would be accepted, provided the fan and/or the light kit are Energy Star-labeled.  We recommend rebates of $50 for ceiling fans purchased from Burbank retailers, $25 for out-of-Burbank purchases.    This tiered rebate approach is in keeping with BWP�s Home Rewards program and serves to encourage Burbank purchases.  Rebates of $50 represent 25% to 50% of the purchase price of most ceiling fan models. 

In summary, BWP recommends rebate support on the following program elements:

Product                       Program Requirement                       Rebate Amount

Solar Attic Fans            Permanently installed in attic,                             $200

                         all makes & models accepted                (40% to 67% rebates,

                                                                                                  depending on price paid)

Ceiling Fans                  Energy Star models accepted,               $50*

                         including fans with and without              (25% to 50% rebates on

                         attached lighting fixtures; limit                 most models)

                         of three rebates per household

* Rebate amount listed is for purchases made from Burbank retailers.  Out of Burbank purchases will receive 50% rebates. 

 Rebate Marketing

Once approved, these rebates will be immediately incorporated into our very popular Home Rewards residential rebate program.  Staff will use a variety of communication vehicles to get the word out on the enhanced rebates.  We will meet with Burbank�s retailers and make sure that they are aware of the program extensions.  This point-of-purchase approach has been a very valuable communication method for us.  Burbank�s retailers are more than happy to display our brochures and mention the rebates to potential customers as the rebates drive sales.  BWP will also utilize Channel 6, another great resource for communicating with Burbank�s residents, as well as our website and bill inserts. 

Budget

Staff anticipates that these rebates will significantly drive sales of solar attic fans and ceiling fans and increase the usage of BWP�s Home Rewards rebate program.  Home Rewards has been an extremely popular program and has a growing trend.  For instance, throughout calendar year 2002 BWP processed an average of 122 rebate applications monthly.  So far this year, that average has increased by over 30% to 163 monthly rebate applications!  Our current budget for Home Rewards is set at $310,000.  At the rate we are going, we anticipate running out of funds in the fourth quarter of the current fiscal year.  Moreover, adding ceiling fans to Home Rewards program and increasing the rebate amount for solar attic fans may have a strong impact on our budget.  However, there is a saving grace!  The FY 2003-04 approved budget for Public Benefits includes a renewable energy project placeholder of $393,969.  This amount was earmarked for the solar carport project that was rejected in favor of increased rebates for solar attic fans.  Staff�s recommendation is to utilize funds from that line item for the solar alternative program and to support the expanded Home Rewards offering.

FISCAL IMPACT

The FY 2003-04 Public Benefits budget has sufficient funds to cover the proposed rebate incentives outlined in this report.

RECOMMENDATION

Staff requests City Council approval of two BWP recommendations.  First, to increase rebate incentives for solar attic fans to $200.  Second, to add Energy Star-labeled ceiling fans to the approved list of products in BWP�s Home Rewards rebate program, offering $50 and $25 rebates, as outlined in this report. 

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