Having spent all my professional career in the electricity sector in different positions ranging from electricity trading on behalf of a large utility to managing energy consulting and energy efficiency projects for large energy consumers, I must agree with industry expert Dr Steven Fawkes that “energy efficiency is boring and seriously uncool to most people most of the time” (see all Fawkes’ Laws of Energy Efficiency here).
Even if your company spends millions in energy costs, in most cases it is still a small fraction of total business costs. Naturally, there are very few people who truly care about all the benefits of energy efficiency at the middle management level, not even mentioning the top management and board level.
In the meantime, there are political movements like UN’s COP21 which recently gathered representatives from 195 countries and resulted in the “Paris Agreement”, a consensus for “holding the increase in the global average temperature to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels”. What does it mean for businesses and how will it affect our everyday lives? Difficult to forecast at this point, but depending on your location and the type of business, the risks and impacts of climate change can have a significant effect. On the other hand, some analysis is already warning that even if nationally determined contributions (NDCs) get fully implemented, it will set the world on course for a 3°C temperature rise by the end century (see here for more details). So what can companies do to contribute already today?
As a parallel outcome from Paris, “The Global Lighting Challenge” was launched (www.globallightingchallenge.org). Turns out that “an overnight global transition to highly efficient LED lamps would avoid 801Mt of CO2 emissions, equivalent to displacing 684 coal-fired power plants around the world”. In monetary terms, it could add up to 120 billion USD saved in global electricity bills. Now, that’s real money and a real action anybody could take, but unfortunately the transition to LED lighting is not happening fast enough, at least not in Europe…
While energy efficiency is often called a “low-hanging fruit” which has “low-cost” or “no-cost”, the reality is far from simple. Various studies have proven that there are many factors creating barriers for energy efficiency. According to a survey by the “Institute for Building Efficiency” which drew over 3000 respondents from 10 countries, top investment barriers for energy efficiency in Europe are “lack of funding to pay for improvements”, “uncertainty regarding savings”, “insufficient management support”, “landlord-tenant split incentives” and “lack of technical expertise”. All of these barriers are applicable to LED lighting as a well.
In order to make the transition to LED lighting easier for the customer, we co-founded RCG Lighthouse, a supplier-independent “Lighting as a Service” company. “Lighting as a Service” means that we do lighting audit, design, purchase and install LED lighting systems and take care of maintenance at no cost for the customer except for a certain share of electricity cost savings. As a result, the customer gets guaranteed cash-flow savings which turn into improved net profits, the customer can forget about lighting maintenance hassle and costs and, in addition, the customer finally gets online visibility for lighting consumption and costs.
After 12 months, since raising venture capital RCG Lighthouse has invested close to 1 million EUR in over 20 projects, thus confirming that “Lighting as a Service” is not a theoretical concept, but a real and efficient solution to speed up the transition to LED lighting. Even more, RCG Lighthouse has now reached a point where “Lighting as a Service” is more efficient than if the customer would decide to do an LED lighting project themselves. Here is a comparison of alternatives that prove that “Lighting as a Service” is not a matter of internal vs. external financing, but more about strategy and efficiency:
Irrespective of your choice, let’s join the LED revolution and facilitate the transition to a cleaner world while saving costs for your company!
Kaspars Osis is co-founder and CEO of RCG Lighthouse, the most efficient supplier-independent “Lighting as a Service” company in Europe. RCG Lighthouse has implemented projects in manufacturing, retail and warehouses with lighting efficacy of over 160Lm/W. See, the RCG Lighthouse website for more information.
Kaspars will be speaking at E2 Brussels on “Lighting as a Service – Successful Business Models for Energy Efficiency Deployment”.