Choosing the Best LED Vendor for your Business
So you’ve decided to upgrade to LED…
You’ve already heard the benefits that upgrading to LED lighting will bring to your business: improved light levels, lower energy costs, and a reduced carbon footprint to name but a few. It all sounds great, but where do you even start?
With so many options to choose from, it can seem like a burdensome task to select the right solution for your business. Luckily, that’s where this article will come in handy. Keep reading to find our top tips on how to choose the best LED vendor for you.
In today’s market, your three main options for acquiring a lighting upgrade are 1) Conventional Procurement, 2) Financed or Leased Lighting, or 3) Light as a Service (LaaS).
Conventional Procurement is most likely the option that first came to mind. This traditional method involves investing your capital in the purchase of LED lighting. You pay for the lights, and they’re yours indefinitely. In this scenario, you have full responsibility for the installation of the fittings. This includes project management and any additional expenses incurred, such as height hire and the safe removal of the existing fittings. Your light levels will improve, you will reduce your energy consumption, and you will see pay back on the investment in 3 to 5 years. This option is well suited to smaller lighting projects, where there are few lights to be replaced and the business has the capital to pay upfront.
Financed or Leased Lighting requires a long term finance or lease agreement. The series of payments makes it a more financially feasible option for businesses who do not have the capital to pay upfront. As with all leases, it must be included on your balance sheet (IFRS 16). This may impact your financial covenants and borrowing capacity, so it does carry a degree of risk. Management of the installation is often included, your light levels will improve, you will reduce your energy consumption, and you will see pay back on the investment in 3 to 5 years.
Of the three, Light as a Service (Laas) is probably the option you are most unfamiliar with. True Light as a Service provides you with a one-stop solution to your lighting needs. It includes every aspect of a lighting upgrade from start to finish: that’s capital investment, project management, and maintenance for a minimum of 5 years.
Often confused with Financed or Leased Lighting, the main distinction is its financial treatment. A Light as a Service Agreement is structured as a service charge, not a lease, meaning it doesn’t affect your balance sheet, and won’t impact your financial covenants or borrowing capacity. Zero capital expenditure is required, and the all-inclusive service charge begins one month after the installation is complete. The installation is fully managed, your light levels are improved to industry-specific standards, you will reduce your energy consumption, and the project will be net cash generative from the first month. This option is ideal for larger projects.
First and foremost, please note that when it comes to a lighting upgrade, price should not be the most important factor in your decision-making process; value should. Focusing solely on cost can result in a sub-standard project. A cheap, low quality product will result in further problems in the long term.
If maintenance is not included in your vendor’s offering, the replacement of faulty fittings will ultimately cost you both time and money. Ensuring the quality and reliability of the product to be used is a vital stage of the process.
Ask your vendor the below questions:
What is the wattage, and therefore the future energy cost, of the fittings?
What is the arrangement between the contractor and supplier of the fittings?
What sort of warranty do the fittings have? (The standard warranty for fittings is 2 or 3 years, whereas some manufacturers offer a 5 year warranty.)
What is the IP Rating of the product? (This will indicate the durability of the product.)
Scale and Support
Before commencing your LED upgrade it is important to put some consideration into what scale of a project you are undertaking, and how much support you require to get the job done.
A large-scale LED upgrade is a complex process. Different areas of your building require different light levels, so you will require a lighting plan that is tailored specifically. Correct light levels in the workplace are essential for health and safety, so unless you are a lighting aficionado this is a job you should leave to the experts.
Ask yourself/your colleagues:
Do you know exactly what products and light levels you need to meet industry standards?
Do you have the capital to purchase the lights upfront?
Do you have the capacity to project manage the installation, in addition to completing daily tasks?
If the answer was “no” to one or more of the above questions, seek a solution that will provide you with the additional support you need.
Upgrading to LED is a big project, make sure it’s done right.