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U.S. Department of Energy Energy Efficiency and Renewable Energy

Energy Incentive Programs, Indiana

Updated November 2011

Indiana utilities budgeted nearly $40 million in 2010 across their various programs (including those directed at residential and low-income customers) to promote customer energy efficiency.

What public-purpose-funded energy efficiency programs are available in my state?

Indiana has no public-purpose-funded energy efficiency programs.

What utility energy efficiency programs are available to me?

Duke Energy offers the Smart $aver Incentive Program for rebates on high-efficiency lighting, pumping systems, and air-conditioning units (including heat pumps). These incentives are prescriptive, based on the efficiency and capacity of equipment. Eligibility is limited to customers with a demand less than 500 kW. Total incentives are capped at $50,000 per calendar year per facility for all eligible equipment.

NIPSCO offers existing facilities $0.06 (lighting) to $0.09 (all other) for first-year savings from efficiency projects through its Commercial & Industrial Electric Incentive Program. This is a custom program, so measure type is not restricted, though savings must be clearly demonstrated. A counterpart new construction program offers $0.045 per first-year kWh saved.

Indiana Michigan Power (AEP) offers its C&I Rebates Program, through which prescriptive rebates of up to $50,000 per year are provided for efficient lighting and VFD installations. A custom program is also available, offering $0.05/kWh for first-year savings (up to $20,000) from measures not covered under the C&I Rebates Program. Pre-approval and post-installation inspections are required.

Indianapolis Power & Light offers its Business Energy Incentives Program, with both a prescriptive component, covering lighting and drives, and a custom one (with a maximum incentive of $25,000). Pre-approval is required for the latter, as well as for incentive amounts above $25,000 in the prescriptive program.

Wabash Valley Power, a generation and transmission utility, offers prescriptive rebates of up to $25,000 to customers of its numerous northern Indiana distribution cooperatives for lighting and HVAC (packaged air conditioners and programmable thermostats).

Vectren provides rebates to its gas customers on a wide range of high-efficiency gas equipment, as well as on boiler tune-ups and steam trap servicing. Citizens Gas offers a set of prescriptive rebates for customers acquiring high-efficiency gas equipment, such as boilers, furnaces, and water heaters, as well as for steam trap servicing and boiler tune-ups. Custom incentives, at 30% of project cost, are also available up to a maximum of $25,000.

What load management/demand response options are available to me?

The PJM Interconnection (PJM), a regional transmission organization (RTO), offers several demand response programs. Two specific programs may be attractive to federal facilities in PJM's northeastern Indiana footprint:

  • The Economic Load Response program allows electricity users to provide load reductions in exchange for a payment based on hourly wholesale electricity prices. Participation is fully voluntary. Program participants have two options: The Real-Time or Day-Ahead Option.

    • The Real-Time Option allows participants to decide at any time to provide load curtailments (with one hour notice to PJM) and receive payment based on the real-time electricity price (the "locational marginal price" in DR parlance).

    • The Day-Ahead Option permits customers to submit load reduction bids (of at least 100 kW) into the day-ahead energy market. Participants whose bids are accepted are paid for their load reductions based upon the day-ahead, hourly electricity market prices (the day-ahead LMP). Reductions are figured based on a customer baseline load (CBL), which is essentially the average load levels for the same hours in four of the facility's previous non-responding days. Retail electricity customers can participate in the program through any existing PJM member, such as their utility, a third-party electricity supplier, or a specialty curtailment service provider (CSP). Regardless of which type of firm it is, the CSP will generally offer to split the revenues with the customer at a pre-determined percentage. Customers on real-time (hourly) electricity pricing can participate, but at much less attractive remuneration terms since they are already exposed to market electricity rates.

  • PJM's emergency "capacity" program allows demand resources to participate in PJM's Reliability Pricing Model (RPM) forward capacity market via a CSP. Participants pledge to either reduce their load by a specified amount (guaranteed load drop, GLD), or to a specific kW level (known as firm service level, FSL), within one or two hours of an event notification. Load reductions are mandatory and may occur up to ten times per year, lasting up to six hours per event. Penalties for non-compliance are substantial. Remuneration is based on the results of the annual RPM capacity auctions in various PJM regions. Remuneration levels for the 2012-13 and 2013-14 PJM years (which begin June 1, 2012 and June 1, 2013, respectively) in PJM's western region (of which northeastern Indiana is a part) are as low as $6,000 per MW in 2012-13 and $10,000 in 2013-2014, compared to roughly $40,000 in 2011-12. Participants are also eligible to receive energy payments for actual reductions, though, if and when the program is called.

In both programs, participants can provide load reductions either through curtailing electricity use or operating on-site generation consistent with local environmental regulations and permits. Interested customers must receive authorization to participate from the Indiana Utility Regulatory Commission prior to enrollment.

Duke Energy offers the PowerShare program, in which participants are remunerated for reducing load below a customer-specific baseline during selected summer and winter months when market prices are high. There are two options: a voluntary and mandatory one. Payments are higher for the mandatory program, but there is a penalty for not meeting the committed load shed during notified events.

Indiana Michigan Power (AEP) offers both an emergency and price curtailable service rider for customers over 1 MW in Indiana. Under these programs, the facility can select from two emergency or three price options depending on the duration of curtailment it is willing to commit to.

Indianapolis Power & Light offers various curtailable riders (Riders 14-18) that permit customers to take advantage of credits both for capacity (contracted kW) and energy (actual kWh curtailed during events) in exchange for curtailing consumption or using their generators in times of grid emergencies or high wholesale power prices.

Vectren (Southern Indiana Gas and Electric) offers several interruptible riders to its commercial customers, as well as a direct load control program through which participants receive summer monthly payments of $5 per air conditioner or heat pump under 5 tons and $4 per kW for each unit over 5 tons.

Wabash Valley Power, a generation and transmission utility, provides incentives to its numerous northern Indiana distribution cooperatives for demand response. Most of these distribution cooperatives offer interruptible options to their large customers. Consult with your coop's representative to learn what opportunities are available.

Utilities in the footprint of MISO (formerly the Midwest Independent System Operator) may enroll interested customers in any of MISO's various demand response offerings, from which they can receive payments for reducing load. Federal customers should contact their local utility representative to inquire about participation.

What distributed energy resource options are available to me?

The Database of State Incentives for Renewables and Efficiency (DSIRE) provides information on programs that offer incentives for renewable distributed generation. The following programs may be of interest to federal customers.

  • Indiana's Office of Energy Development (OED) sponsors the Indiana Solar Thermal Grant Program, by which solar thermal systems are cost-shared at 25% of their installed cost, up to $25,000. The program's proposal window for 2010 was during the month of August, but it may be offered again in 2011. Interested customers are advised to consult the OED website, above.

  • Indianapolis Power & Light's Renewable Energy Production (REP) rate is a feed-in tariff that provides generous remuneration rates for ten years for ratepayer's renewably generated power, including $0.24/kWh for power from 20-100 kW solar PV systems ($0.20/kWh for systems from 100kW – 10 MW) and $0.14/kWh for the output of small (50-100 kW) wind installations ($0.075/kWh for 1-10MW systems).

  • NIPSCO also offers a feed-in tariff, with similar rates to IP&L's but including a rate escalator and up to 15-year terms. NIPSCO's offering also covers biomass and small hydroelectric systems.

Are there energy efficiency programs sponsored by the state government?

The Indiana Economic Development Corporation offers a small number of loan and grant programs that could be devoted to energy efficiency projects. However, no programs are currently available to federal customers.

What additional opportunities are available to me?

Federal customers whose utilities have area-wide supply contracts through GSA (e.g., Duke Energy), may be able to take advantage of 3rd-party financed energy efficiency projects called utility energy services contracts (UESCs). Information is available on GSA's Energy Center of Expertise Library Page. Federal facilities should contact their account executive to determine the level of each utility's participation.PJM (see above in the demand response section) now allows energy efficiency projects to participate in its forward capacity markets, based on its Reliability Pricing Model (RPM). To be eligible, EE projects must reduce load continuously by at least 100 kW during peak summer hours, and not be dispatchable. This load reduction can be bid into PJM's annual (for three years in advance) and "residual" (nearer-term) capacity auctions, and if selected will receive the auction clearing price. Interested customers can participate through energy service companies conducting ESPCs or utilities executing utility energy services contracts (UESCs) at their sites.

NOTE: Energy efficiency funds and demand response programs are updated at least annually. Please contact the FEMP webmaster if changes are needed between updates.