Breaking Barriers to Efficiency Retrofits Through Lighting-as-a-Service

LED lighting systems are illuminating the way to cost savings, greenhouse gas reductions and better bottom lines. Despite being recognized as a bright idea, building owners are still using outdated lighting technology as they are faced with common barriers to efficiency retrofits, namely, a lack of time and funding needed to make necessary changes. Enter Lighting-as-a-Service (LaaS), the ideal solution for building owners looking to upgrade to brighter and more efficient systems. While lighting retrofits can be challenging if taken on independently, LaaS partners alleviate the headache, ensuring success for building owners looking to step into the light. Similar to how businesses commonly outsource functions like payroll and IT, building owners can do the same with their efficiency infrastructure through LaaS. Projects are managed from start to finish (and beyond), removing the challenges of lighting retrofits—including vendor negotiations, implementation, evaluation and testing, savings verification, ongoing maintenance and more—and leaving business owners to focus on what matters most.  

Offering an innovative investment model for efficiency retrofits, LaaS programs operate as a unique service agreement, meaning building owners are ultimately paying for light while the infrastructure is owned, operated and maintained by an efficiency partner. This method enables the costs to be treated as operating expenses instead of capital expenses, while also reducing the overall expenditure through immediate energy savings. Project fees are paid through a portion of savings generated, meaning owners are left with the benefits of brighter spaces, all without affecting balance sheets or a building’s ability to borrow.  

With LaaS partners owning and maintaining lighting retrofits, this means that building owners may never have to replace a burned-out bulb again. Retrofits managed through LaaS models mean project management doesn’t stop with just the replacement of lighting systems; these systems are managed by your efficiency partner for the duration of your contract. LaaS takes the responsibility of upkeep and maintenance from the building owners’ hands completely, leaving one less thing for them to worry about.  

By outsourcing lighting retrofits, building owners also outsource the risk associated with implementation and management. LaaS alleviates the risk to business owners as projects are financed and managed by efficiency partners—no capital is spent, and no time wasted trying to DIY a lighting retrofit. The responsibility lies with efficiency partners to ensure retrofits are measured and verified accurately, and that expectations are met. If savings aren’t generated, they don’t get paid.  

Understanding the full scope of a retrofit before implementation can also help increase expected savings or value in the long run, making full-building lighting audits a valuable tool for efficiency partners to create the perfect project plan. LaaS programs should include an audit of current systems, which may uncover key problem areas or opportunities for increased efficiency in places building and business owners may least expect. The as-a-Service model (XaaS) can then be applied to other efficiency retrofits, giving building owners an opportunity to reap the benefits of full-scale efficiency retrofits without lifting a finger or paying a cent.  

As national and global calls to reach net-zero carbon emissions continue to grow, there is no reason for building owners to delay the switch from conventional light sources to energy-efficient systems. There is urgency around lighting upgrades as the cost of waiting can be high—every year retrofits are postponed, potential savings are lost through inefficient lighting systems. Plus, the benefits of improved lighting speak for themselves, from increased asset value and decreased energy costs, to improved tenant health and happiness, increased efficiency and generally brighter, airier spaces—competitive advantages for building owners looking to increase tenant retention or find new ones.  

At its core, LaaS and XaaS take the guesswork out of generating greater building efficiency by providing affordable, risk-free access to energy efficiency – building owners need only to find an efficiency partner to take their first step toward building a brighter future.  

Chandra Ramadurai is the CEO of Efficiency Capital. He brings over two decades of experience in clean energy, banking and investment management in Canada, the US, Europe, the Middle East and India. Previously, he was the CEO at IT Power, one of the world’s oldest sustainability companies based in the UK and has held senior-level level positions at Suzlon Energy, a large wind energy company, Cemex, Standard Chartered Bank and PWC. Chandra is an engineer, certified accountant, and holds an MBA from Duke University. Leading Efficiency Capital, he feels he’s finally found his calling.