Special Report: The Value Illumination Offers

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By John Parkinson Published in the April 2011 issue of Today’s Facility Manager facility management lighting energy upgrades NEMA incentives As the U.S. continues its slow climb out of the “Great Recession,” the term “value” has taken on a whole new meaning as it has been adapted by companies and is now part of the American business lexicon. Today, finding “value” can be interpreted as it relates to two areas: expenses and investments. Organizations of all types are taking another look at their expenses and seeing if they can either find ways to cut back on expenditures or do more with less. And when exploring potential investments, they want to be assured they are getting their money’s worth. In the lighting market, there is an opportunity for manufacturers to provide facility managers with options to fulfill both of these aspects of value. One of the biggest expenditures facility managers face in their organizations is energy. And these expenditures may be subject to rising fluctuations as the recent spike in oil prices illustrates. Fortunately, an investment in lighting technologies and products can offer potential savings that can be realized for both the interiors and exteriors of buildings, with an eye towards greater energy efficiency and illumination output. Facility managers who participated in the third annual Today’s Facility Manager (TFM) lighting survey, sponsored by the National Electrical Manufacturers Association (NEMA) enLIGHTen America initiative, echoed the importance of value in making decisions about lighting upgrades or retrofits. When asked about the importance of achieving certain objectives when considering lighting upgrades, survey takers’ single biggest response (90%) was in regard to “reducing energy usage and costs.” They ranked this objective as “very important.” The next largest objective for respondents was to “lower maintenance costs” with 67% of facility managers describing this as “very important.” (See Chart below.)

facility management energy lighting upgrades NEMA

Who Took The Survey?

The total number of survey respondents this year was 422 facility managers, which was up considerably from last year’s 342 total. The biggest segment of respondents was made up of commercial/office facility managers at 38.8%. And while there was a slight drop off for the second largest sector, the next two were very close in the overall representation. Facility managers in manufacturing settings represented 19.9% of survey takers followed by those working in education (17.3%). (See Chart below.) The number of respondents managing “owner occupied” facilities was very high at 82%. Interestingly enough, another 10.2% of respondents said their organizations didn’t own their buildings but could make decisions on lighting upgrades. Therefore, a vast majority of the overall respondents were qualified to make lighting changes to their facilities.facility management energy lighting upgrades NEMA In terms of the facilities themselves, the respondents’ buildings were beginning to mature, bringing them into an age bracket where renovations could be expected. When asked how old their facilities were, the largest response was from those with sites older than 30 years (39.8%). The next largest response (37.8%) was in the next bracket down—“15 to 30 years old.” When asked about when they were planning to make their next lighting upgrade, the largest response was from those planning “within the next year” (34.3%), and the second biggest (18.3%) response group was facility managers looking to make an upgrade “within the next three years.” Together, this made 52.6% of respondents looking to perform an upgrade in the next three years. In addition, another 27.8% of respondents said “Not Sure” as to when they would consider an upgrade.

Lighting Manufacturers As Consultants

One of the areas where lighting manufacturers and vendors can help facility managers researching lighting upgrades is in the role of consultant. “Manufacturers can provide guidance for selecting the right products for the right application,” explains Dorene Maniccia, LC, LEED®AP, NEMA chair of Lighting Controls Section and WattStopper’s director of policy and industry affairs. Quite often these services are complimentary, and the combination of the individual manufacturer’s experience and the tools it offers can help to make an assessment easier. For example, Bob Freshman, marketing manager for Leviton says his company has technical sales specialists who can help guide facility managers through the process, and they also offer assistance through a software program that has online tools and applications to help companies design what they need and show how fast a project will pay back. RAB Lighting offers a similar consulting service. Bob Reade, the company’s marketing coordinator, explains, “Our engineers can not only complete a free energy cost analysis, but they can also provide free lighting layouts to ensure that customers are installing the best fixture for the situation.” Meanwhile, NEMA’s enLIGHTen America initiative, a campaign to promote energy efficient lighting upgrades for new and existing buildings, has evolved over the last few years. “EnLIGHTen America began as an information and education campaign for the EPAct 2005 Commercial Building Tax Deduction,” Maniccia states. “Now we are expanding the focus of the program to include an education campaign on lighting management (control) systems.” She continues, “Customers are able to get high quality educational information, and it’s not specific to any one lighting manufacturer’s services or products. The content covers state of the art technology, and it allows customers to reach their continuing education goals, because we have them accredited.”

A Look At Interior And Exterior Lighting

For their building interiors, facility managers still overwhelmingly use linear fluorescent bulbs. In a survey question that asked respondents to indicate all the types of light bulbs they employ in their buildings, 84% said they use linear fluorescent bulbs as part of the mix of lighting types in their buildings. The next highest response was for compact fluorescent (76.1%). Bill Plageman, vice president of product marketing for Amerlux, believes fluorescents hold some competitive advantages over other bulbs, especially in office applications. “Fluorescents are going to have a major resurgence in the general lighting of the office or commercial environments,” he says. Plageman also notes the life expectancy of fluorescents have improved from 20,000 hours to 50,000 hours, and this feature (along with the attractive costs and understanding of fluorescents) makes it hard for LEDs to compete with fluorescents. “There won’t be the return of investment for facility managers looking for LEDs to provide general office lighting, because of the fluorescent lamps that are out there right now.” He adds there are office applications where LEDs might be preferable, like in settings where lights are hard to change out. The other types of bulbs being used by survey respondents in their facility interiors were: incandescent (55.1%); LED (41.2%); metal halide (36.4%); halogen (35.6%); high pressure sodium (20.5%); and induction (1.6%). This year, a new survey question was added that also looked at all the types of light bulbs facility managers are using for exterior lighting. The biggest response here was for metal halide (57.7%), closely followed by high pressure sodium at 55.1%. Plageman believes exteriors are where LEDS (which garnered a 14.4% response) can excel, especially in retrofit applications where existing metal halides are in place. “With exteriors, the value of the perception of the quality of light outside is important,” says Plageman. “Metal halides provide good color rendition, but LEDs can now provide comparable lighting quality. Many LEDs on the market can now be tuned to be visually warmer or cooler. And this comes with the tremendous energy savings that LEDs offer.” Both interior and exterior lighting are receiving more attention lately in terms of the standards to be applied to these systems. ASHRAE’s 2010 version of Standard 90.1 has expanded the requirements for both indoor and outdoor lighting controls. This version of the standard has more mandatory requirements for lighting controls than ever before, and most lighting alterations and retrofits will now have to comply with the mandatory control requirements that are outlined in the standard. “The new 90.1 2010 expands the requirements for outdoor lighting controls from just requiring time based scheduling control strategies to adding on high/low requirements for the lighting,” states Maniccia. Bi-level and daylighting controls are now required for interior and exterior areas and parking garages. Manual on (or auto on to no more than 50% lighting power) is now required for all interior spaces, occupancy or timer switches are required in eight space types, and plug loads must be controlled in offices and computer classrooms. Provisions also are provided for increasing lighting power if certain lighting controls are used beyond mandatory measures. “We see ASHRAE moving forward with controls, and I think we are going to begin to see states that are more aggressive with requiring high/low control of outdoor lighting,” predicts Maniccia. (The “Lighting Controls 101” sidebar at left defines the most common lighting controls strategies.)

Other Lighting Technologies

Bulbs. Susan Anderson, energy relations manager for OSRAM SYLVANIA, says facility managers should consider using T8 and T5 high efficiency electronic fluorescent systems in traditional fluorescent and metal halide applications. “There is a tremendous opportunity for energy savings, even greater than with T12 electronic or pulse start metal halide systems,” says Anderson. “They have a longer lamp life, extended relamp cycles, and reduce maintenance costs. In addition, fluorescent T8 and T5 systems are compatible with many control and sensor options.” Controls and Sensors. Lighting controls are being used more frequently, according to this year’s survey. Fifty percent of respondents said they use a lighting management system to control use. In terms of the type of controls, 85.6% were using manual switches followed by occupancy/vacancy/motion sensors (64.9%), and time switches (clocks) (45%). Continuous dimming seems to remain in a low usage stage in terms of adaption to the technology, as 93.6% of respondents only use it for “up to 25%” of their facilities lighting. Nevertheless, experts mention the efficiencies that controls and sensors offer. “Companies can save a substantial amount of energy by using sensors, easily cutting 30% to 40%—and up to 50% of energy costs,” reiterates Leviton’s Freshman. “And once you pay it back, your savings continue.” facility management energy lighting upgrades NEMAWireless is another emerging technology that offers some distinctive advantages. “Putting in a wireless system is painless and will cost half of hardwiring a system,” states Freshman. Another technology that will become more popular in the coming years is digital lighting control systems, according to Maniccia. These systems contain a suite of components that communicate with one another using digital protocols. “These are going to emerge as a preferred solution for controlling lighting, because with digital you get communication, information, and self calibration,” explains Maniccia. “The plug and play components reduce installation and commissioning time and costs.” LEDS. This lighting technology can be viewed as evolving in certain applications and performing consistently well in others. In the survey, the most prevalent area where LEDs continue to be used is for signage (58.8%). This was followed by the response “other” (34.5%)—which included a variety of responses from facility managers—and lobbies (33.3%). There is still a slight perception the technology is too expensive (38.2%), and 31.4% said the technology is too new to evaluate for their facility. Yet, upon further exploration, there are reasons to consider it in specific applications. “LED fixtures are a low wattage solution for outdated, inefficient lighting, with comparable light output,” explains RAB’s Reade. He also says lamp changes are not required for up to 15 years. In terms of specific types of products, James Steedly, product design engineer at MaxLite, says LED flat panels provide some other advantages. “They offer facility managers the opportunity to add uniform light fixtures that are easy on the eyes, thus preventing eye strain,” explains Steedly. He says LEDs “fill a room with light” unlike other sources that have “pointed lighting.” The biggest industries where the flat panels are being used are in healthcare and education settings. For healthcare especially, the ease of cleaning makes it ideal for keeping sterile environments, and these units are fully integrated to accept commands from automated lighting control systems, according to Steedly. Meters. Suzy Abbott, marketing manage for E-Mon, says metering allows facility managers to understand their lighting energy consumption by monitoring loads ranging from an entire lighting panel down to an individual lighting circuit. “Once you have this granular level of data, the facility manager will be able to identify areas of energy waste and opportunities for investment in lighting conservation measures,” she explains. “The load profiling of lighting energy consumption will provide insights to optimize the facility manager’s investment for the quickest return.”

Financing A Lighting Upgrade

As consultants, lighting companies can show facility managers a range of products and technologies, size them up to the various building types, and work to find out what facility managers’ lighting needs are within their buildings. They can offer energy efficient solutions that provide value by contributing both environmental and efficiency gains. And lastly, when working through the financing for a project, lighting companies can help facility managers identify the financial incentives available for their projects. Here are some of the bigger incentive program areas available today: EPAct 2005 Commercial Building Tax Deduction (CBTD). This deduction, which was extended in 2008, provides for up to 60¢ per square foot savings for lighting upgrades performed during the years 2006 through 2013. In this year’s TFM/NEMA survey, only 21.6% were planning to take advantage of CBTD, while another 5.3% had already taken advantage of the tax deduction. Conversely, 40.4% of facility managers said they were not planning to take advantage of CBTD, and another 32.7% did not know about the tax deduction. Therefore, a little over a quarter of respondents had already taken advantage of the deduction or were planning to do so, and the remainder—nearly three quarters of the facility managers who took the survey—were not going to use CBTD or did not know it existed. A great opportunity remains for manufacturers and facility managers alike to take advantage of this federal tax deduction as it goes into its final two years before it sunsets in 2013. (More information is available at www.lightingtaxdeduction.org, a website developed by the Lighting Systems Division of NEMA in cooperation with the Commercial Building Tax Deduction Coalition.) The Tax Relief Unemployment Insurance Reauthorization and Job Creation Act of 2010. Within this tax stimulus plan, passed last year, an increase from a 50% bonus depreciation to 100% is available for qualified investments in new, original use properties made after September 8, 2010 through December 31, 2011. This act also allows 50% bonus depreciation for qualified property placed in service after December 31, 2011 and before January 1, 2013. Transportation property and certain longer production period properties are eligible for 100% expensing if placed in service before January 1, 2013. This provision is available for all businesses and is not subject to a dollar level cap. Says Anderson, “The potential benefit is that the entire purchase price of a qualifying asset may be deducted against U.S. taxable income rather than being depreciated over a multi-year period. The program applies to assets with tax class lives of 20 years or less.” Utilities. The recent environment in which utilities have operated has given rise to these entities striving to become more efficient, and that has, in turn, developed into incentive programs for corporate customers. For example, some utilities are beginning to look at LED technology and offer rebates for it. “Many LED fixtures are being qualified under the Design Lights Consortium, which is an organization that many utility companies use to qualify lighting products for rebates,” says RAB’s Reade “There are several utilities that have begun including LED fixtures in rebate programs, providing rebates, and in some cases, covering the entire cost of the fixture.” Additionally, there are utility rebates available for dimming ballasts, occupancy sensors, and daylight sensors. (Information on various rebates can be found at www.dsireusa.org, a project of the NC Solar Center and the Interstate Renewable Energy Council, funded by the U.S. Department of Energy.) Interestingly enough, load shedding was not being widely used by survey respondents. This strategy is a component of demand response programs, and it occurs when organizations agree to reduce their demand for power from the local utility. This is done temporarily during peak energy use hours. This is also when energy costs are generally at their highest. There are opportunities for facility managers to generate income by entering into a demand response program with their local utility or energy aggregator. A facility could receive a check in the mail every month or each quarter for simply having the capability to shed load. Lighting is an ideal building system for load shedding, because lights can gradually and unobtrusively dim down or be turned off in certain spaces during a demand response event and be brought back to previous levels quickly. HVAC systems, on the other hand, take more time and energy to return to previous levels. According to the survey, only 13% of respondents were employing this strategy (with 21% considering it). Conversely, 55.5% were not using it and 10.5% didn’t know what load shedding was. Meanwhile, 46 states have incentive programs for this strategy. Third-party financing. This option allows organizations to work with energy service companies (ESCOs) and lighting retrofit contractors to evaluate lighting efficiencies and make upgrades. These upgrades create efficiencies and decrease utility bills, which then allow the organization to pay back the contractors and ESCOs over time for their installation work.

What Matters Most

A confluence of factors is coming together that will influence facility managers as they go forth with their purchasing decisions. As seen in this survey, aging facilities with antiquated lighting systems can be upgraded by retrofits with energy efficient systems. Additionally, a whole host of newer technologies are evolving, and several of the federal incentives will begin to sunset in the next few years. These factors, combined with the value mindset organizations of all types must have, provide a fertile environment for lighting companies and facility managers to collaborate on lighting investments. While deliberating about and making decisions on upgrades or retrofits can be challenging, it is the final result in terms of increased energy efficiency, upfront and operating cost savings, increased asset value, and improved productivity that will offer facility managers peace of mind in the end. Parkinson is a past TFM managing editor who continues to write on topics related to the facility management profession. For more information about getting started on lighting upgrades for your organization, contact the NEMA/EnLIGHTen America member companies listed below.

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