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Lighting: Fulfilling a Project's Potential

Part 1: Lighting Retrofits: Evaluate Options, Crunch the Numbers

Part 2: Lighting Retrofits: Controls Provide Savings Opportunities


Lighting Retrofits: Controls Provide Savings Opportunities

By Denise Fong - January 2011 - Lighting


Most managers considering lighting retrofits consider only the lighting equipment when, in fact, some of the greatest potential for energy savings comes from controls. At the most basic level, occupancy sensors can save 15-30 percent of a space's lighting energy use if the space has intermittent use throughout the day.

Occupancy sensors can be simple replacements for wall switches, and wireless versions are available that eliminate the need for an electrician to rewire the space. In rooms with daylight, photocells that automatically dim the lights in conjunction with daylight can save an additional 30-50 percent of energy use. By making the leap from devices to systems, managers can tie lighting controls to room schedules, give users individual control of the fixtures in their immediate area, shed load to avoid peak-demand charges from the utility, and set a high-end trim if light levels are higher than needed.

To analyze the opportunities a retrofit presents to an organization, managers will need to plan in advance. A lighting designer can guide managers through the many available options and prioritize the highest-yield returns. A salesperson associated with a manufacturer or distributor primarily is interested in selling their products, so managers need to be aware they will slant their sales pitches to achieve that goal. By comparison, an independent lighting designer who is knowledgeable about current technologies is more likely to look at all potential options.

The designer will learn about the organization and its operations to understand the level of feasible change. They do not have a financial interest in the final equipment selected, so they can make recommendations with the organization's best interest in mind.

For all of these strategies described above, lighting designers also can analyze the potential savings and estimate equipment costs and energy savings. They can make recommendations as to whether in-house staff can accomplish the work or if the project calls for hiring an electrical contractor. They also can assist with paperwork associated with rebate funding from local utilities.

Managers also should provide financial analysts — whether the analyst is an in-house person or an outside consultant — with estimates on energy savings for a complete financial analysis. They will calculate the net present value (NPV) of all the cash flows of the investment and the energy savings using the discount rate, include tax benefits, and compare that calculation to the initial investment.

If the resulting NPV is greater than zero, managers should go ahead with the project. A proper financial analysis with company-specific information will validate the savings potential and the return on investment so the entire team can move forward with confidence.

Denise Fong —dfong@candela.com— IALD, LEED AP, is principal of Candela, a lighting consulting and design firm with offices in Seattle and San Diego. She has more than 25 years of developing award-winning lighting designs in the built environment.

Money Matters: Tax Deduction for Lighting

To take some of the sting out of the capital investment for lighting retrofits, the Commercial Building Tax Deduction provides commercial and institutional facilities with funds for making a building more energy efficient. The deduction is on a sliding scale, with maximum of $1.80 per square foot of the property. For retrofits that involve lighting only, the limit is a sliding scale from 30 cents per square foot to 60 cents per square foot. Managers must measure the reduction in energy use against ASHRAE IES 90.1-2001.

The Emergency Economic Stabilization Act of 2008 (HR-1424), extended the benefits through Dec. 31, 2013. For more information, visit www.lightingtaxdeduction.org/tax_deduction.html#P5.

Utility funding is available in some areas. The utility might allot payments based on the estimated savings in kilowatt-hours for the first year or make payments on a component basis. In most cases, to get the funding, managers must sign a contract with the utility before beginning construction on the project.

— Denise Fong




Lighting: Fulfilling a Project's Potential

Part 1: Lighting Retrofits: Evaluate Options, Crunch the Numbers

Part 2: Lighting Retrofits: Controls Provide Savings Opportunities


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