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Powering Profits: Energy Incentives for Laundromats and OPLs in the TVA Region

Written by jd

Oct 17, 2025

(615) 885-1115

1) Executive summary (what’s out there & who qualifies)

  • TVA EnergyRight® Business & Industry (B&I) offers cash incentives for energy-efficient upgrades across most of TN and large parts of KY/AL/GA served by TVA-affiliated Local Power Companies (LPCs). There are prescriptive categories (e.g., HVAC, lighting, refrigeration, variable-speed drives) and a Custom path that pays up to $0.18 per first-year kWh saved—useful for laundry-specific measures like heat-pump water heating, heat-pump dryers, controls, or process optimizations. Projects are generally submitted by a Preferred Partners Network (PPN) contractor and must follow program rules. EnergyRight+2EnergyRight+2

  • Other IOU/municipal/co-op programs operate side-by-side with TVA where applicable, notably Georgia Power (rebates through its Commercial Energy Efficiency Program) and city/coop programs that coordinate with TVA. These can fund lighting, HVAC, controls, refrigeration and more; some have “direct install” options for small businesses. Georgia Power+2DSIRE+2

  • Gas & water-heating incentives: Several natural gas utilities in TN/GA/AL (e.g., Piedmont Natural Gas, Atlanta Gas Light, Spire) advertise commercial water-heating incentives or conversion rebates that can reduce capex for high-efficiency or fuel-switching water heaters—important for OPLs and laundromats with big DHW loads. Piedmont Natural Gas+2Atlanta Gas Light+2

  • State financing: Tennessee’s Energy Efficiency & Renewable Energy Loan Program (Pathway Lending) and PACE financing enable low/long-term capital for upgrades; KY and AL State Energy Offices aggregate programs and contacts. Tennessee.gov+2Tennessee.gov+2

  • Federal levers:

    • USDA REAP grants/guarantees for rural small businesses (many laundries qualify by location) fund energy-efficiency projects; guidance in 2024–2025 references grants up to 50% of eligible costs (caps apply) and loan guarantees. The Department of Energy’s Energy.gov+1

    • U.S. tax code: Section 179 expensing (2025 limit $1,250,000, phase-out over $3,130,000) and—per 2025 legislation reports—100% bonus depreciation returning for qualified property placed in service after Jan 19, 2025 (confirm with your CPA). IRS+1

 

2) TVA EnergyRight®: how laundries actually use it

Who’s eligible? Commercial customers served by a TVA LPC (or direct-served by TVA). You’ll typically work with a PPN contractor who scopes savings and files the application; pre-approval can be required. EnergyRight+1

What gets funded?

  • Prescriptive menus such as HVAC, LED lighting, refrigeration, VSDs (e.g., $100/HP for VSDs on existing HVAC fans), plus other posted categories that apply in most facilities. EnergyRight+1

  • Custom Incentives for measures outside the prescriptive list—“up to $0.18 per first-year kWh saved.” This is where laundry-specific tech can live: heat-pump water heaters, heat-pump or heat-recovery dryers, laundry controls/EMS, high-efficiency circulation pumps, and process heat recovery. EnergyRight

Key program guardrails (2025) include minimum incentive thresholds, approvals, and funding availability; the Rules & Guidelines document is the definitive reference. EnergyRight

Local engagement: Your LPC (e.g., MLGW in Memphis; Volunteer Energy Cooperative; etc.) often has a landing page pointing you to TVA B&I incentives and contacts. MLGW+1

3) Measure-by-measure: what’s most impactful in a laundry

  1. Domestic hot water (DHW) upgrades

    • Heat-pump water heaters (HPWH) or high-efficiency gas water heating (where appropriate) cut kWh/therms dramatically. TVA’s Custom path is well-suited to HPWH in OPL/laundromats due to large, steady DHW loads. Pair with gas-utility incentives if using gas. EnergyRight+1

  2. Dryer retrofits

    • Heat-pump dryers or gas-to-electric optimization may qualify through Custom if you can document kWh savings. Where gas is used, some utilities offer conversion incentives for dryers/water heaters (check AGL/Spire). EnergyRight+1

  3. Washer efficiency & controls

    • While TVA’s prescriptive list doesn’t publish a specific “commercial washer” rebate, first-year kWh and kgal reductions from high-spin/low-g-force washers, lower inlet temps (via HPWH), and cycle optimization can be monetized under Custom. Also note ENERGY STAR® commercial washers data for savings claims support. EnergyRight+1

  4. Make-up air / ventilation fans (VSDs)

    • $100 per HP for VSDs on existing HVAC equipment helps control dryer room ventilation energy—common in laundries. EnergyRight

  5. Lighting, refrigeration (for attendant stores), and controls

    • Standard prescriptive items that reduce base-load consumption and often fund quickly. EnergyRight

Ozone Laundry Incentives for Laundromats & OPLs

Cut hot water use by up to ~90% and get paid to upgrade

Why ozone?

Ozone injection replaces most of the thermal disinfection load with powerful cold-water oxidation. Well-implemented systems routinely slash hot-water demand by up to ~90% and shorten dry times—driving big savings in electricity, gas, and water while improving wash quality. laundryconsulting.com+2hklaundry.com+2

Industry leaders: Aquawing (validated ozone delivery) and San-O3-wash (Aquawing’s laundromat platform) are widely adopted for commercial and self-serve applications. Both are designed to sanitize while enabling cold-water cycles that cut utilities and chemicals. aquawingozone.com+2National Laundry Equipment+2

Where the money is (incentives & rebates)

TVA EnergyRight® (TN/KY/AL/GA in TVA territory)

  • Custom Incentives: Projects that aren’t on the prescriptive list (e.g., ozone laundry) can qualify under TVA’s Custom path at up to $0.18 per first-year kWh saved—ideal when you model hot-water and dryer energy reductions from ozone. Applications typically run through a Preferred Partners Network (PPN) contractor and must follow the Business & Industry Rules & Guidelines. EnergyRight+1

Non-TVA examples (proof that utilities fund ozone)

  • Xcel Energy explicitly rebates ozone laundry equipment, noting large gas savings versus traditional hot-water processes—useful as a benchmark when your local utility wants a precedent. Xcel Energy

  • If you’re outside TVA or have a different electric/gas provider, use ENERGY STAR’s commercial rebate finder to locate current business incentives and then propose ozone as a custom energy-saving measure if it isn’t listed prescriptively. ENERGY STAR

What to claim (savings that justify incentives)

  • Hot-water energy: Up to ~90% reduction when converting hot cycles to ozone-enabled cold water. Pair this with water heater run-time cuts (electric or gas). laundryconsulting.com+1

  • Dryer energy: Less retained moisture after the wash can trim dryer kWh/therms substantially; document shorter average dry cycles. laundryconsulting.com

  • Water & chemicals: Programs may allow non-energy benefits to support the business case even if incentives pay only on kWh. National Laundry Equipment

How to win the incentive (quick checklist)

  1. Confirm your utility (TVA LPC or other). If TVA, plan a Custom application; if not, ask for a custom engineering review using utility M&V guidelines. EnergyRight

  2. Engage an approved contractor (TVA PPN or equivalent) for baseline metering, savings modeling (hot-water kWh, dryer kWh/therms), and application paperwork. EnergyRight

  3. Choose a validated system from Aquawing / San-O3-wash and gather manufacturer performance data to support energy models. aquawingozone.com+1

  4. Document baselines (current water temps, gallons, cycle times, dryer minutes/load) and post-install results to meet program M&V. EnergyRight

  5. Stack funding where available: Some utilities (e.g., Xcel Energy) pay specifically for ozone; others pay through custom paths. Use ENERGY STAR’s finder to surface parallel programs. Xcel Energy+1

4) Stacking outside TVA in TN/KY/AL/GA

Georgia:

  • Georgia Power Commercial Energy Efficiency Program—rebates for high-efficiency equipment; Small Commercial Direct Install can cover up to 70% of certain upgrade costs for small customers (≤120 kW peak). Apply by deadlines (2025 cycle currently open). Georgia Power+1

Alabama:

  • Alabama Power promotes business offers; also look at electric water-heater conversion promotions (residential-focused pages exist; business programs are coordinated through account reps). For gas, Spire highlights rebates for water heating. alabamapower.com+1

Tennessee:

  • TDEC Pathway Lending Energy Efficiency Loan Program—low-interest loans for for-profit and non-profit C&I projects (equipment + installation). Pair this financing with TVA incentives. Tennessee.gov

Kentucky:

  • LG&E/KU commercial programs include prescriptive & custom rebates (lighting, motors/VFDs, EMS, etc.), plus Small Business Audit & Direct Install for turnkey savings on common measures. DSIRE+1

Natural gas utilities (region-wide):

  • Piedmont Natural Gas: Commercial HVAC & Water Heating incentives page for businesses.

  • Atlanta Gas Light: business conversion rebates for water heaters, dryers, cooking equipment.
    These can be stacked with electric-side (TVA/utility) incentives when you’re lowering total site energy. Piedmont Natural Gas+1

5) Federal programs you can combine

  • USDA REAP (Rural Energy for America Program): For rural small businesses (laundromats/OPLs often qualify if located in eligible census tracts). Current program materials & DOE/USDA communications reflect grants up to 50% of eligible costs (caps: $500k EE / $1M RE) and loan guarantees; check the current Federal Register/USDA page for the active round and terms. Note: Energy-efficiency projects typically must reduce existing energy use (new-construction limitations apply). Rural Development+2The Department of Energy’s Energy.gov+2

  • Tax levers:

    • Section 179 expensing limit $1,250,000 for 2025 (phase-out above $3,130,000). IRS

    • Industry sources report 100% bonus depreciation reinstated for qualified property acquired/placed in service after Jan 19, 2025 (timing matters). Confirm applicability with your CPA; watch for IRS guidance updates. Moss Adams

6) What an actual laundry upgrade “stack” looks like

Example (illustrative, OPL hotel or 3,500 ft² laundromat in TVA territory):

  • DHW: Replace two aging electric 80-gal units with commercial HPWH bank; optimize recirc and setpoints.

    • TVA Custom incentive estimates based on modeled first-year kWh saved → up to $0.18/kWh on first-year savings. EnergyRight

    • If gas-fired is chosen instead (site economics), check Piedmont NG commercial water-heating incentives (TN/GA). Piedmont Natural Gas

  • Dryers: Convert 6 aging electric stacks to heat-pump dryers (or add heat-recovery). Claim through TVA Custom with M&V plan. EnergyRight

  • Make-up air fans: Add VSDs on existing units → $100/HP prescriptive. EnergyRight

  • Lighting: LED + controls under prescriptive menus. EnergyRight

  • Finance: Use TDEC Pathway Lending low-interest loan (TN) and stack REAP grant (if rural) to cut net cost. Tennessee.gov+1

  • Tax: Depending on placed-in-service dates, Section 179 and potentially bonus depreciation accelerate write-offs (CPA to confirm). IRS+1

7) Owner checklist: steps to capture incentives quickly

  1. Confirm your utility & territory (TVA LPC vs. non-TVA provider like Georgia Power). Start on TVA’s B&I incentives hub (or Georgia Power’s CEEP if in their territory). EnergyRight+1

  2. Engage a PPN contractor (TVA) early for scoping, pre-approval, and application handling. EnergyRight

  3. Pick measures that move the needle in laundries: HP water heating, heat-pump/heat-recovery dryers, VSDs on fans/pumps, LED + controls. Use Custom when not listed prescriptively. EnergyRight

  4. Check gas-side rebates if using/adding gas DHW or dryers (Piedmont/AGL/Spire). Piedmont Natural Gas+1

  5. Line up financing (e.g., TN Pathway Lending; PACE where available) to cover remaining capex. Tennessee.gov+1

  6. If rural, evaluate USDA REAP eligibility and calendar. Rural Development

  7. Coordinate tax strategy around placed-in-service dates to maximize Sec. 179/bonus depreciation. IRS+1

8) Reference links & where to apply (by program)

  • TVA EnergyRight® Business & Industry – overview & incentive categories; VSD/HVAC pages; Custom incentive page; PPN and rules/guidelines. EnergyRight+6EnergyRight+6EnergyRight+6

  • Local TVA utilities – examples: MLGW (commercial services); Volunteer Energy Cooperative (C&I page). MLGW+1

  • Georgia Power – Commercial Energy Efficiency Program (rebate portal, program sheet, small commercial direct install). Georgia Power+2georgiapowercommercialrebates.com+2

  • Natural Gas utility incentives – Piedmont Natural Gas (commercial HVAC & water heating); Atlanta Gas Light (business conversion rebates); Spire (AL) rebates hub. Piedmont Natural Gas+2Atlanta Gas Light+2

  • State/financing – TN Energy Efficiency & Renewable Energy Loan Program (Pathway Lending); TN OEP financing hub; ADECA State Energy Program (AL). Tennessee.gov+2Tennessee.gov+2

  • USDA REAP – program overview & current eligibility/terms. Rural Development+1

  • Tax resources – IRS Pub. 946 (2025 limits); industry summaries on bonus depreciation changes (verify with your CPA). IRS+1

  • ENERGY STAR® commercial clothes washers – performance & savings benchmarks to support Custom applications. ENERGY STAR

Notes & caveats

  • Program specifics change (funding windows, prescriptive rates, measure eligibility). Always verify the current TVA B&I Rules & Guidelines and your LPC’s requirements before purchase/installation. EnergyRight

  • Bonus depreciation details in 2025 reflect industry analyses of new legislation; consult your tax advisor and watch for IRS updates aligning publications with enacted changes. Moss Adams

  • REAP awards are competitive and require documented energy savings; new-construction efficiency equipment is generally not eligible under the grant (loans may be). Rural Development

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