Understanding Point-of-Sale Programs

Point-of-Sale (POS) incentive programs are not new. Throughout the United States they have been a part of successful utility ratepayer funded energy efficiency programs for many years. Most of these programs are administered by utilities, but a handful are managed wholly or in part by a state-wide entity. 

What is a Point-of-Sale Program

Within the utility energy efficiency program lexicon, "point-of-sale" is broadly used to indicate an incentive that is offered as an instant discount applied at time of sale or installation (as opposed to having a consumer apply for a rebate retroactively via an online portal or mail in rebate form).

• Retail POS programs have been a popular approach for utility lighting and appliance programs for more than a decade. In addition, several retailers now sell heat pump water heaters either direct to consumers or contractors or in conjunction with affiliate installation service providers.
• Distributor POS programs have also become increasingly popular for programs focused on the installation of efficient water heating and heating and cooling systems with distributors as a focal point of engagement and management. These distributors in turn work with affiliate contractors/plumbers to manage and offer POS incentives. 

Because they focus on mid-level actors, i.e., retailers and distributors, these programs are often referred to as midstream programs; POS programs are a type of midstream program.

Advantages of Retailer and Distributor Point-of-Sale Programs

Importantly, programs that have switched from designs that require consumers to apply for rebates to retail and distributor POS approaches have seen significant increases in program uptake due to several advantages. Beyond the obvious direct benefit to consumers of reducing the cash needed to purchase the product, the approach can: 

• Help ensure supply of targeted appliances/measures.
• Elevate cash flow management to an appropriate level, as larger businesses have greater resources and are more accustomed to managing cash flow. (Contractors and plumbers do not typically have cash on hand to carry multiple rebates and wait to be reimbursed).
• Reduce the number of relationships that a program implementer needs to manage, while still benefitting local jobs and smaller business.
  • Distributor POS programs work directly with smaller contractors and plumbers.
  • Big box retailers can hire or partner with affiliate installers or pro networks.
  • Independent retailers can be engaged through retail buying groups such as Nationwide Marketing Group.

As states explore designs for their own programs, it is worth considering similarities and differences between existing midstream/POS programs and the state rebate programs envisioned by the Inflation Reduction Act. The following is a sample list of midstream programs currently being offered by ENERGY STAR partners.

*This list is not exhaustive and does not include other POS program types such as those that work directly with a contractor network.