Updated:
By: Brad Taylor

2022 Compressed Air Incentives from DTE Energy in Michigan

Michigan compressed air users can save big money on energy-saving upgrades through the DTE Energy Efficiency Program for Business. Rebates through this program cover all or part of the cost of energy-saving improvements such as leak repair, VSD compressors, high-efficiency dryers, and more. 

Are you a franchise owner? Franchisors qualify for special bonus incentives between now and November 30, 2022, when they complete qualified projects across multiple locations.  

About the DTE Energy Efficiency Program for Business

DTE Energy serves 2.2 million electric customers and 1.3 million natural gas customers in Michigan, including residential, commercial, and industrial power users. The Energy Efficiency Program for Business is targeted to commercial and industrial power users to help them reduce their energy consumption. The program includes prescriptive and custom incentives for both electricity and gas. 

  • Prescriptive incentives offer a set amount of money for specific types of projects, such as installing zero-loss drains or upgrading to a VSD compressor. 
  • Custom incentives provide rebates based on the amount of energy saved. 

The electric portion of the program includes rebates for energy-efficiency improvements including lighting, HVAC, and process electricity applications such as compressed air. Because compressed air is often one of the biggest single energy-using applications for manufacturers, it represents a significant opportunity for energy savings. Inefficiencies in compressed air systems can add thousands of dollars to the average manufacturer’s energy bill and add to the strain on the power grid. 

Additional information is available at dtebizrebates.com

Why does your energy company want you to use less energy?

Reducing the overall load on the power grid helps utilities better regulate supply and demand, minimize the risk of outages due to excess demand, and reduce overall wear and tear on transmission and distribution infrastructure. It can also help them forestall expensive infrastructure upgrades. Manufacturers and other large energy users provide the greatest opportunity for energy companies to reduce the overall load on the power grid and avoid big swings in energy demand.

Who is eligible for energy incentives through the DTE Energy Efficiency Program for Business?

The DTE Energy incentive program is open to commercial and industrial customers in good standing. The project must be installed at a facility served by DTE Energy. 

There is a limited pool of funds for energy rebates through the program each calendar year, which runs through November 30th. Pre-approval is not required for prescriptive rebates, but an application is recommended to ensure that funds are reserved for your project. Custom incentive projects always require preauthorization. 

Applications are completed online. If you’re not sure if your project qualifies, or need some advice in filling out the application, you can talk to a program advisor at 866-796-0512 or dtesaveeneregy@dnv.com

DTE Prescriptive Incentives for Compressed Air Systems

Prescriptive incentives from DTE can help companies offset the cost of energy-saving improvements to their compressed air systems—in some cases, they may cover the majority of the cost. The prescriptive incentives offer a set dollar amount for purchasing qualifying energy-saving equipment for your compressed air systems, including VSD air compressors, zero-loss condensate drains, and more.

While pre-approval is not required for most of DTE’s prescriptive offerings, DTE recommends submitting an application in advance to reserve funds for your project.

Check the 2022 DTE Program Catalog for details on all prescriptive incentives.  

Compressed Air Audits and Leak Repair

To make fast improvements in the overall energy efficiency of your compressed air system, an energy audit with a leak detection survey is a great place to start. Compressed air leaks are a huge energy drain—according to many studies, on average 30% of compressed air is wasted. These leaks, which can add hundreds or thousands to your annual energy bill, represent low-hanging fruit when it comes to energy efficiency improvement. 

DTE Energy covers compressed air audits that result in leak repair. To qualify, the audit must include data logging of compressor kW, pressure, and flow rate along with leak detection. In addition, the leak rate (in CFM) must be reduced by a minimum of 50% through repair of the identified leaks. (At Fluid-Aire, we recommend repairing all identified leaks whenever practical.) Compressed air users can apply for a compressed air audit and leak repair annually under two DTE programs. 

  • CA-25 covers $35/CFM detected for users operating with a VSD air compressor. 
  • CA-41 covers $20/CFM detected for users operating with a non-VSD compressor.    

Fluid-Aire Dynamics offers a variety of compressed air studies and system audits, including data logging and leak detection. In a leak detection survey, technicians use an ultrasonic leak detector to pinpoint the location and size of compressed air leaks in your system. We can repair most leaks on the spot and will tag larger leaks for later repair. If the cost of repair will exceed the amount covered by the DTE rebate, we’ll let you know exactly what to expect. (We find the cost of repair is almost always less than the cost of leaving the leak unrepaired.) 

Aire Tip: A 1-CFM leak will add ~$35 in energy costs per shift per year. 

VSD Compressor Incentives 

For many manufacturers, upgrading from a fixed-speed to a Variable Speed Drive (VSD) air compressor provides the single biggest opportunity for energy savings. A VSD air compressor saves energy by controlling the frequency supplied to the drive motor on the air compressor in response to real-time demand on the system. 

  • When demand is low, the motor will run at a reduced speed, requiring less energy to operate. 
  • When demand for compressed air is higher, the VSD will automatically increase the frequency to meet CFM demands. 

The DTE Energy prescriptive incentive provides rebates on the purchase and installation of a new VSD air compressor to replace an existing fixed-speed compressor. The incentive must be applied to the main compressor; backup or redundant systems are not eligible. The rebate amount depends on the size (HP) of the compressor and the number of shifts it is operated. 

  • For VSD air compressors of less than 50 HP, the program provides rebates of $20/HP for single-shift operation and $55/HP for triple-shift operation. (CA-34, 44)
  • For VSD compressors 50 HP to 500 HP, the program provides rebates of $50/HP for double shift and $80/HP for the triple shift. CA-26 and 43 cover single-compressor systems only. 
  • For multi-compressor systems between 50 and 500 HP, CA-45 and 46 cover $54/HP for systems in use 4,000 – 7,199 hours annually and $80/CFM for systems in use 7,200 hours or more annually. 

Want to retrofit your existing air compressor with a variable speed drive motor? CA-47 covers VSD retrofits for multi-compressor systems between 50 and 300 HP and is used for at least 7,200 hours annually at a rate of $52/HP.  

Aire Tip: Switching from a rotary screw air compressor to a VSD air compressor could save 30-70% on energy consumption for compressed air. Read more: Why Choose or Upgrade to a Variable Speed Drive Air Compressor?

Other Air Compressor Incentives

In addition to the VSD upgrade incentives, DTE offers incentives for two other types of compressor purchases. 

  • Two-stage rotary screw air compressors (CA-48): Covers $14/HP toward two-stage rotary screw compressors of 50 HP or greater that will be operated a minimum of 4,000 hours/year in a multi-compressor system. The compressor may be a variable speed drive (VSD), variable displacement (VD), or LNL-type compressor. 
  • Variable Displacement Air Compressors (CA-33): Covers $25/HP toward the purchase of a VD screw air compressor to replace an existing screw air compressor that uses modulating or load/no load control. 

Prescriptive Incentives for Compressed Air Components and Accessories 

DTE also provides prescriptive incentives toward the purchase of other types of compressed air system components and accessories that improve the energy efficiency of the system. Consult the 2022 DTE Program Catalog for full program qualification requirements. 

  • High-Efficiency Refrigerated Dryers (CA-27, 28, 29): Covers $0.30/CFM for installation of a refrigerated cycling thermal mass dryer, $1/CFM for a variable speed refrigerated dryer, or $1/CFM for a refrigerated digital scroll dryer. CA-30 pays $3/SCFM toward the purchase of a refrigerated air dryer to replace an existing desiccant dryer (for systems of 50 HP or greater). 
  • Heated Desiccant Dryers (CA-35, 36, 37): Provides $2.50/SCFM with a VSD compressor, $1/SCFM with a variable displacement compressor, and $1.50/SCFM with an LNL compressor towards the purchase of a heated desiccant dryer that replaces a heatless dryer. 
  • Blower Purge Desiccant Dryers (CA-38, 39, 40): Provides $4/SCFM with a VSD compressor, $2.50/SCFM with a variable displacement compressor, and $2.50/SCFM with an LNL compressor toward replacement of a heatless desiccant dryer using compressed air for purging with one that uses a blower for purging.
  • Zero-Loss Drains: Covers $100/drain for installation of zero-loss condensate drains, which eliminate the loss of compressed air during draining. The drain cannot be already integrated into new equipment. 
  • Pressure/Flow Controllers (CA-24): Covers $4/HP for pressure/flow controllers for compressed air systems. Must be installed on a main pressure header downstream from the storage/receiver tank and provide at least 5 psig reduction. 
  • High-Efficiency Nozzles (CA-23): $50/nozzle. Nozzles must be in use at least 1,000 hours per year and replace an open pipe/tube assembly. 
  • Compressed Air Storage (CA-32): Covers $30/compressor HP when upgrading capacity from ≤ 1 gal/CFM to ≤ 3 gal/CFM. Covers $25/compressor HP when upgrading capacity from ≤ 3 gal/CFM to ≤5 gal/CFM. Learn how upgrading air storage can save energy for your compressed air system
  • Low Pressure Drop Air Filters (CA-49): Pays $3/compressor HP for replacement of a standard coalescing inline filter with a low pressure drop filter for systems of 50 HP or larger. Is a low pressure drop filter right for you? Learn more about compressed air inline filtration.
  • Air Compressor Outdoor Intake (CA-50): Covers $6/compressor HP toward hard-ducting the air compressor inlet to the outside instead of using indoor conditioned air. The compressed air system must be 50 HP or larger and operate at 80 psig or higher.Custom Incentives

Custom Incentives

DTE also provides incentives for projects outside the scope of the prescriptive incentive offerings. These projects are reimbursed based on the amount of energy saved per year, measured in kilowatt-hours (kWh). In general, these projects are reimbursed at a rate of ~$0.05/kWh saved. However, DTE runs bonuses a few times a year which may reimburse qualifying projects at a higher rate.  

Custom projects must be pre-approved by DTE prior to equipment being purchased, ordered or installed. To get started with a custom incentive, manufacturers must work with a DTE advisor to obtain pre-approval before the project starts and any purchase orders are made. Fluid-Aire Dynamics can help manufacturers gather the required documentation and submit the application to DTE. 

Getting Started with DTE Energy Incentives for Compressed Air Systems

Fluid-Aire Dynamics makes it easy to qualify for incentives through DTE Energy. We have been trained in their application process and can even fill out the paperwork for you and provide all the required documentation to make participation as easy as possible. We can:

  • Conduct compressed air audits and leak detection surveys
  • Identify your greatest opportunities for energy savings and incentives
  • Fix leaks or install qualifying equipment and upgrades

 Contact us to learn how we can help you improve the energy efficiency of your compressed air system. The sooner you get started, the sooner you can start saving money on your energy bill! 

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