So you’ve decided to upgrade your warehouses to LED lighting. Now what?
With so many LED vendors to choose from, selecting the right option for your business can seem like an impossible task. Keep reading to find our top tips on how to choose the best LED vendor for you.
Know Your Purchasing Options
Think the only way to upgrade to LED lighting is to fork over the cash? Think again.
In today’s market, the three main options for your LED upgrade are: 1) Conventional Procurement, 2) Financed or Leased Lighting, and 3) Light as a Service.
Conventional Procurement is likely the first option that came to mind. This traditional method entails investing capital in the purchase of LED light fittings. You pay for the lights upfront, and they’re yours indefinitely. You have full responsibility for their installation – including 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 repayments makes it a more financially feasible option for businesses that do not have the capital upfront, or would rather invest it in other areas of the business. As of January 2019, all leases (finance and operating) must be shown on the Balance Sheet of a company, meaning they will require more disclosure and reporting, and carry increased liability. (IFRS 16) This may impact your financial covenants and borrowing capacity, so it carries 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 likely the option you are least familiar 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: capital investment, project management, and guaranteed light levels for the duration of your agreement.
Often confused with Financed or Leased Lighting, the main distinction is its financial treatment. A Light as a Service Agreement is treated as an operating expense at the P&L level, 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.
Know That You Get What You Pay For
It’s important to note that not all LED upgrades are created equal.
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.)
Some vendors will install LED tubes into existing fixtures. This is a huge mistake for a variety of reasons, and will often result in product failure within 12-18 months. While at first it may seem to be the cheaper option, it ends up being the most expensive in the long run. The full fitting should always be replaced – check out this video to see why (WARNING: Do not watch this video if you suffer from photosensitivity): https://www.youtube.com/watch?v=B_I-8pQlbmU.
Know What Support You Need
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.
Got a question? Feel free to give us a call on +353 1 699 3340, or email [email protected]. We’ll discuss your business needs and point you in the right direction. No heavy sales pitch, we promise.