Lighting as a service: key learnings from implementing 100+ projects in three EU countries for corporate & industrial customers

Panel: 5. Business models, finance and investment in the age of digitalisation

Author:
Kaspars Osis, RCG Lighthouse, Latvia

Abstract

According to IEA’s "Energy Efficiency 2017" report (https://www.iea.org/efficiency/), lighting has the highest incremental investment share in total energy efficiency spending, but despite ongoing transition to more efficient LED lighting technology, there are still significant barriers in decision-making for corporate and industrial ("C&I") customers, for instance, lack of financial priority (for example Renault has 1 year payback policy), landlord–tenant dilemma, lack of specific LED knowledge (for example: Carrefour does not have a dedicated LED person). On top of that, there has not been significant progress in terms of Lm/W efficacy (the most important criteria for lighting energy efficiency) in the last 1–2 years and customers often choose less efficient and less qualitative solutions that undermine the full potential of LED lighting technology.

RCG Lighthouse, a pioneer in developing "Lighting as a Service" (LaaS) concept in its true sense (which is not fixed lease payment) and holds a Lm/W record of 180 Lm/W, argues that LaaS approach can facilitate faster and more efficient transition to LED lighting technology if LaaS provider can find the right balance by taking and sharing the risks that customers are not willing or capable to take (financial, technical, operational). RCG Lighthouse has raised over EUR 2 million in funding (equity and commercial debt) and has successfully implemented more than 100 projects in three EU countries for C&I customers (retailers, warehouses, factories and other building types).

The contribution will discuss what are the financing challenges for energy efficiency, what are the most recent trends in LED lighting market and how to exploit the full LED lighting potential at wider scale.