As an LED lighting retrofit business, the current economic and labor climate is ripe with opportunities. The demand for what you do is high…and the number of people who can claim your skill and experience is declining.
But for smaller firms, how can you insert yourself into larger projects that cover multiple sites, include a lot more than lighting and carry price tags in the tens of millions of dollars?
One way is to partner with one of the “big fish” in the energy efficiency pond: an Energy Service Company (ESCO).
There’s not much certainty about today’s economy, much less where it’s going over the next few years. But one thing we can say is that interest—and investment—in large-scale energy efficiency projects is getting stronger every day.
Speaking during a session of the SnapCount Retrofit Showcase 2021 (more takeaways from the showcase here), Tim Unruh, Executive Director of the National Association of Energy Service Companies (NAESCO), pointed out that energy efficiency was once thought of as a matter of austerity, “making things uncomfortable” to promote energy savings.
No longer, Unruh said. Today, energy efficiency projects easily improve lighting, comfort, indoor air quality and the safety of the working environment.
“We talk about actually having an energy efficiency project improving the health of the occupant,” Unruh said.
Large corporations, school districts, and other large organizations want these benefits for their workers (not to mention the massive cost savings associated with energy efficiency). Still, the path to getting them is not always straightforward. Barriers include:
“The ESCO industry solves all of those items,” Unruh said. “We come in and turnkey all those items so that there are no longer those barriers moving forward.”
According to NAESCO’s official definition, ESCO services include:
In other words, ESCOs design their work to pay for itself over time.
As Unruh noted in his presentation, recent and pending federal government legislation includes billions of dollars in funding that can potentially be used for energy efficiency retrofit projects. He estimated that the three economic stimulus bills passed under the previous and current presidential administrations contain up to $25 billion that could go toward school renovation and operations improvements.
ESCOs are poised to help large organizations take advantage of this funding windfall, but they need contractors to help fill the labor gap. Even before the COVID-19 pandemic, the U.S. Bureau of Labor Statistics reported nearly a quarter-million unfilled construction jobs each month. The National Electrical Contracting Association said that, for every 10 electricians that left the field, only seven entered.
That’s where your LED lighting retrofit business comes in.
Large-scale, long term energy efficiency projects are rarely about efficient lighting alone. They’re often not even just about energy efficiency, which is why Johnson Controls has changed its ESCO division’s name from “Energy Solutions” to “Performance Infrastructure.”
“Renewable energy has become a big deal, and water efficiency has become substantial,” Charles McGinnis, Vice President of Performance Infrastructure for Johnson Controls, told Retrofit Showcase attendees.
The complexity of these huge projects is typically beyond the scope of what a single LED lighting retrofit business can handle. But lighting retrofitters that partner with ESCOs can offer invaluable contributions.
For example, organizations are crunching massive amounts of data to determine occupancy trends and make adjustments to optimize lighting, heating and cooling using internet of things (IoT)-connected controls.
“There’s a lot of advanced analysis taking place around data, and what’s better at transmitting data than lighting systems?” McGinnis asked.
LED lighting retrofit businesses can also help out on the service side of the ESCO’s contract. The standard ESCO model includes services such as continuously checking photometrics and monitoring the performance in a commercial building.
“We rely on many of our lighting partners to deliver those services for us, rather than self-perform that,” McGinnis explained.
So, we’ve covered why ESCOs need qualified LED lighting subcontractors. But the relationship can go both ways.
Here are a few ways LED lighting retrofit businesses can benefit from ESCO partnerships:
McGinnis described his ideal lighting subcontractor as a “retrofit specialist” (as opposed to a company specializing in new construction) with proficiency in complex control systems. He said that the ability to provide ongoing service after the initial installation project is a must, because Johnson Controls offers infrastructure-as-a-service or energy-efficiency-as-a-service models.
A track record for safety is another critical feature the Johnson Controls team values in its partners.
“We look for people that have EMR (experience modification rate) safety ratings of 1.0 or higher,” McGinnis said.
LED lighting retrofit businesses should be prepared to pursue certification in common systems alongside their ESCO partners. McGinnis described how one of Johnson Control’s lighting partners and a team of internal personnel all recently became certified with a client’s chosen lighting manufacturer to “provide a level of excellence and quality on that installation.”
Finally, ESCOs prefer partners that use the same tools as the ESCO’s internal team. For example, Johnson Controls relies on SnapCount to perform lighting audits and manage retrofit projects.
“When you have an integrated toolset between the ESCO and the lighting partner, you can get economies of scale, [such as] downloading line-by-lines to tablets and being able to optimize the as-builts as a result,” McGinnis explained.
Leading ESCOs trust SnapCount to manage some of the nation’s largest lighting retrofit projects and will often specify its use for their valued project partners. SnapCount can help LED lighting retrofit businesses of all sizes conduct audits, create proposals, and implement projects up to 70% faster, saving money and boosting efficiency.
How much can your business save using SnapCount? Find out using the SnapCount Savings Calculator.