2024 Compressed Air Incentives from DTE Energy in Michigan

Jan 24, 2024 by Kevin Taylor

Table of contents

Compressed air users in the southeast Michigan/Detroit metro area 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. 

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 2024 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 $25/HP to $100/HP, depending on the number of shifts. (CA-34, 44, 51 and 52);
  • For single-system VSD compressors 50 HP to 500 HP, the program provides rebates of $97/HP (CA-26, 43);
  • For multi-compressor systems between 50 and 500 HP, DTE covers $76/HP for systems in use 4,000 - 7,200 hours annually and $107/CFM for systems in use more than 7,200 hours 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 used for at least 7,200 hours annually at a rate of $73/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?

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 2024 DTE Program Catalog for full program qualification requirements.

Program Number


2024 Incentive Limit


High-Efficiency Air Nozzle



Compressed Air Pressure Flow Controller


CA 25 & CA 41

Compressed Air Audit with Leak Repair

  • With VSD
  • No VSD



CA 26 & CA 43

VSD Air Compressor 50-500 HP

  • 2,000 - 6,000 hours of use
  • >6,000 hours of use



CA 34, CA-51, CA-44 & CA-52

VSD Air Compressor <50 HP

  • 1 shift
  • 2 shift
  • 3 shift
  • 24/7





CA-46, CA-45

VSD Air Compressor (Multiple System) 50-500 HP

  • 4,000 - 7,200 hours of use
  • >7,200 hours of use




VSD Restrofit Air Compressor (Multiple System) 50-300 HP 

  • >7,200 hours of use



2-Stage Rotary Screw Compressor (VSD/VD/LNL type)



Low Pressure Drop Air Filters ≥50 HP

$4.50/connected compressor HP


Air Compressor Outdoor Intake ≥50 HP

$8/connected compressor HP

CA-27, CA-28, CA-29

Efficiency Compressed Air Refrigerated Dryer

  • Cycling Thermal Mass
  • VSD
  • Digital Scroll





Refrigerated Air Dryer Replacing Desiccant Air Dryer



Zero-Loss Condensate Drain



Compressor Air Storage Tank

$25/connected compressor HP


Variable Displacement Air Compressor


CA-35, CA-36, CA-37

Heated Desiccant Dryer

  • VSD
  • VD
  • LNL




CA-38, CA-39, CA-40

Blower Purge Desiccant Dryer

  • VSD
  • VD
  • LNL





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).

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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