By Chad A. Safran
Published in the April 2009 issue of Facility Executive
According to the U.S. Department of Energy, more than 75% of the five million commercial, institutional, and industrial buildings in the United States were constructed before many current energy efficient technologies were available. These facilities use nearly 900 billion kilowatt hours (kWh) of electricity. In a typical office building, lighting accounts for 30% of the energy usage—the largest single category of controllable energy costs. The result? Over $115 billion in electric utility spending per year—a staggering number for those facility managers (fms) and executives who need to find ways to help make their buildings more energy efficient and cut costs at the same time.
Consequently, the National Electrical Manufacturers Association (NEMA)/enLIGHTen America, in conjunction with Today’s Facility Manager (TFM), has sponsored a survey of TFM subscribers to examine lighting usage among fms and their facilities. The findings presented here offer an overview of how behaviors, policies, products, and financial opportunities affect the way lighting impacts fms now and in the future.
The 184 fms who responded to the survey work in a broad spectrum of facilities. The top four were commercial (26.4%), manufacturing (19.7%), education (15.7%), and healthcare (11.2%). Fms in government, retail, legal, financial, and religious spaces also responded.
While over half (52.2%) of the respondents had implemented a lighting or lighting controls upgrade in their facility within the past three years, 41% were looking at performing an upgrade during the next 12 months, and 21.9% were considering doing this within the next three years. A leading reason for why those upgrades had not begun came down to cost (cited by 21.9%). Some also cited the age of the building, often less than 10 years old, while others were in the process of doing an upgrade.
Why Lighting Upgrades?
One survey question sought the motivation behind lighting upgrades, asking, “on a scale of one to seven, with one being ‘most important’ and seven being ‘least important,’ what would be your main objective in performing a lighting upgrade?” More than three-quarters of the respondents (78.2%) cited “energy and cost savings” as the most important aspect (with another 13.3% citing it as their second most important reason).
Following that was “lower maintenance costs,” with a total of 47.1% respondents citing that as either the most important or second most important reason for implementing a lighting upgrade.
Coming in at third and fourth place as motivators were “light level improvements” (with 26.5% citing it as most important or second most important) and “environmental sustainability” capturing 22.7% for those two levels of importance. A bit lower on the totem pole was “occupant satisfaction” (with 18.5% of respondents citing that as their most or second most important reason).
Conversely, the least important reasons for performing an upgrade were organizational image (a total of 4.2% cited it as the first or second most important reason) and product standardization (5.7% cited that as the first or second most important reason).
Where To Begin?
Because lighting accounts for 30% of the energy consumed in most commercial office buildings today, an upgrade there offers the greatest and fastest return on investment (ROI)—often in less than two years.
But where do fms begin with a lighting upgrade? First, they should evaluate existing lighting systems. An audit of total lighting energy expenditure by an energy services company or a lighting management company will identify potential savings.
However, improving energy efficiency at the luminaire level is only going halfway (more on that later).
What Types Of Lighting?
When asked what type of lamps are currently installed in their facilities, 69.7% of respondents named linear fluorescent, which was followed by compact fluorescent (18%). The other choices given were metal halide (5.6%), incandescent or halogen (3.4%), and high pressure sodium (HPS) with 2.8%.
In terms of fluorescent lamps, T8s are already common among the survey’s participants, with 70.8% using these—almost four times as much as runner-up T12 (18.5%). Fifty-three percent are using only electronic ballasts; and 27.5% are using mostly electronic ballasts. Meanwhile, 5.1% of respondents answered they use magnetic ballasts, with 11.8% using magnetic ballasts for the “majority” of their fixtures.
Today’s T8 lamps and electronic ballasts are more efficient than those in the past, so additional savings can be achieved compared to older T8 systems. Facilities using magnetic ballasts and T12 lamps have the greatest opportunities for energy savings and operating cost reductions by converting to high efficiency T8 and T5 fluorescent systems.
Reduction Strategy: Load Shedding
With cost a priority, fms can consider a variety of additional options to reduce lighting energy use and costs even more. Load shedding, a component of demand response programs, is one of the options. Many survey respondents (46.1%) were not going to consider this as an option, while nearly one quarter (23%) did not know what load shedding was.
When facilities load shed, they temporarily reduce their demand for electrical power from their utility company. Utilities impose additional fees on high use customers that have large demand during peak load times of the day and year. Fms can use it to lower their electrical load temporarily and therefore, demand, during peak load times to help minimize usage fees during these times. The fm or utility company sends an electronic signal to the load shedding system in the building telling it to reduce electrical demand. When the peak has passed, the signal turns off, and demand returns to normal.
Installing the equipment for load shedding is relatively simple. A command injector and a split-core command coupler are installed for each lighting panel with the coupler surrounding the input wires to the panel. The existing fluorescent ballasts are replaced with high efficiency T8 ballasts with internal devices that receive the command signals, and lamps are replaced with T8 lamps. An activation switch is then installed for each command injector; the switch can be a simple manual switch at each panel, an AC relay/contractor driven from the building automation system, or a secure, Internet driven connection based on the local utility program.
According to NEMA member and OSRAM SYLVANIA Energy Relations Manager Susan Anderson, load shedding offers several benefits. “Fms are able to manage operating costs by avoiding high peak charges and possibly receiving financial incentives from the electric company (currently in 45 states),” she explains. “Installations provide opportunity to remove older, less energy efficient fluorescent systems, thus reducing electrical load and therefore demand on a daily basis. Removing old equipment also reduces maintenance costs.”
Costs for setting up load shedding include investment in the new equipment as well as the labor needed to remove the old equipment and install the new. Many utility companies offer additional incentives for replacing T12 or older T8 systems, so fms may be able to benefit from two utility incentive programs—one for load shedding and one for the T12 to T8 conversion.
Building automation systems and/or automatic lighting controls to turn off lighting not in use are other ways fms can manage lighting. In the survey, 75.3% of respondents indicated they use time scheduling (48.9%) or occupancy sensors (26.4%) as prime ways to control lighting costs.
Dorene Maniccia, director of industry affairs at Watt Stopper/Legrand, offers another take on the future of automation. “We’re getting back to basics by giving manual-on control back to the occupant and relying on the automatic controls to turn lighting off when not needed. This is a more energy efficient strategy, because it requires the occupant to turn lighting on when needed.
“A recent CLTC [California Lighting Technology Center] study showed a 46% increase in energy savings,” continues Maniccia, “just by having the occupant manually turn lights on when needed. Consequently, manufacturers are developing occupancy and daylight sensors that seamlessly integrate with manual controls and can be networked when needed. These systems facilitate code compliance and LEED designs, save energy, and are easier to install and operate.”
Bob Freshman, marketing manager at Leviton, agrees and foresees this as the way of the future. “We see lighting controls advancing into the area of total facility energy management that would integrate lighting, HVAC, and other electrical demand products into a single control system that integrates all these functions,” he says. “Sub metering, load shedding, and demand control will be combined into a single control system that would maximize the overall building efficiency and offer the greatest operational savings and shortest ROI.”
Susan Bloom, director, corporate communications at Philips Lighting & Philips Lighting Electronics, observes, “There are many sophisticated approaches being employed by fms to help control lighting and energy costs—from the installation of automated and ‘smart’ building management systems to the use of load shedding techniques and investigation of alternative energy sources. Still, ‘simple’ lighting upgrades involving energy efficient lamps, ballasts, and controls remain very manageable projects which yield attractive returns.”
Funding An Upgrade
For many survey respondents, the ROI time on a lighting upgrade would have to be less than three years (38.8%) with 33.1% suggesting two years would be preferable. With budgets tightening, this is an important factor in deciding whether to conduct a lighting upgrade.
However, several programs can assist fms with budgetary needs. One is third party financing, which 60.1% of respondents said they would not consider (one fm cited the project size might not warrant this, while another tracks expenses as a project proceeds), while 21.9% said they would need more information.
When a project is financed through a third party, fms get the lighting upgrade for no cash down and then pay for the upgrade with the money saved on the utility payments they would have made if they had not upgraded. Once the finance agreement is paid off, fms keep the benefits going forward or use them to make further improvements in their facilities.
“Economic conditions have made this option more attractive,” says Anderson. “Fms are not required to pay precious cash up front. NEMA is working to reach the people who make the financial decisions through its enLIGHTen America campaign.”
Another opportunity involves utility incentives and rebates. At least 80% of the states have utilities with lighting efficiency incentives. More than half of the fms surveyed either did not know about the availability of these programs (27%) or believed their utilities did not offer financial help to offset the cost of lighting system upgrades (26.4%).
Of those who were aware of these programs, 74% were taking advantage of the assistance.
The amount saved varies from program to program and may depend on whether lamps and ballasts are replaced or new luminaires are installed (incentives tend to be higher for new).
Another financial incentive is available through the EPAct 2005 Commercial Building Tax Deduction Program (CBTD), which was recently extended through 2013. Many respondents (82%) were not planning to (or did not know about being able to) take advantage of the tax deduction being offered by the federal government. However, of those who were, 80% planned to take part during this year or 2010.
CBTD is a rapid depreciation program for energy efficient capital expenditures. Fms can take a deduction for a large portion of their expenditures in the year in which they put a new building or system into use instead of having to spread out depreciation deductions over years. If a project reduces energy by 25% to 50%, the fm can be eligible for up to 60¢ per square foot as a gross tax deduction. The amount of the gross deduction will be capped by the lesser of the amount determined by the per square foot allowance or their actual costs. Some states, such as California, Georgia, and New York, also offer incentive programs.
“I like to tell people they can have their cake, the icing, and ice cream too, as well as the sprinkles,” says Anderson. “The cake is the savings in energy bills (which can be used to pay off third party financing until the project is paid for, then saved or invested in other facility improvements). The icing would be utility rebates where available. The ice cream is the commercial tax deduction. The sprinkles are the reduction in air condition load realized by having a more efficient lighting system.”
Taking The Initiative
Lighting companies are also helping fms learn more about financial strategies to help their bottom lines.
GE Consumer & Industrial uses its Lighting and Electrical Institute in Cleveland, OH to help. “We know any customer decision requires an ROI calculation, so we’re constantly arming our people and customers with tools and updated information on issues such as tax incentives and utility rebates,” says John Strainic, global lighting product general manager at the company. “As fms continue to add task and ambient lighting and intelligent lighting with advanced controls, they will be able to reduce traditional overhead lighting significantly and reach new levels of energy savings.”
Larry E. Smith, VP renovation sales, Acuity Brands, Inc. – GM/ SAERIS, agrees that fms need support when undertaking a lighting project. “Most of our customers lack the product expertise, program resources, processes, or manpower to manage a lighting renovation program,” says Smith. “We meet this need by supplying auditing, assessment, design, engineering, implementation, and project management. We provide a one source solution.”
Eddie Hickerson, marketing staff specialist with the Installation Systems & Control business unit of Schneider Electric, agrees. “Fms are increasingly looking for one source to provide a complete building solution,” he says. “When a problem arises, there is only one vendor to call for service. [For instance], commercial and industrial fms have experienced the limitations and growing pains of using proprietary building controls. For companies with many buildings located on one campus or all over the country, the need for a true open, non-proprietary, and Web enabled protocol is key to minimizing future risks.”
Another way fms are achieving efficiency is by using LEDs-—a trend that Suzan Simmons, marketing communications manager at Robertson Worldwide, sees as progressing. “The continued development of high performance LED Drivers for the technology will provide opportunities to save energy and improve maintenance costs,” she says. “This technology transitions well into both new construction and retrofits. Commercial LED products use 75% less energy and last 35 times longer than incandescents.”
Several companies are offering other alternatives to help fms reduce electric costs. Philips Emergency Lighting offers fluorescent emergency ballasts, which reduce labor costs by eliminating the time involved in conducting code required tests of emergency operations each month. Without the self-testing option, emergency ballasts must be tested manually. Codes require that 30 second tests be conducted every 30 days and that 90 minute tests be conducted annually.
EYE Lighting International of North America, Inc. (a wholly owned affiliate of Iwasaki Electric of Tokyo, Japan) is introducing its energy efficient Iwasaki Luminaire line of products, which includes architectural flood fixtures electronically ballasted in a tight, high performance, quality lighting control package.
Time To Act Is Now
No matter what method fms choose to improve their lighting, now is a time to make it happen, according to Keith T.S. Ward, president and COO of EYE Lighting. “We are at the most influential time in our industry and society’s history in my opinion,” he says. “Certainly, the economy is on the forefront of everyone’s minds, but it also creates the immediacy of the need and the opportunity to supply products that allow facilities to perform better at lower costs, to create more competitive businesses and more profitable companies, and higher valuations for their assets.”
It’s clear that many fms around the country would like to increase the efficiency of their lighting systems. Economic, environmental, and other factors all play into this desire. Fortunately, available technologies, established financial incentives, and support from product and service providers are helping to pave the way.
For more information on how you can implement effective lighting upgrades in your facility, contact the NEMA/EnLIGHTen America companies listed below.