The increasing IoT (Internet of Things) capabilities and the proliferation of ideas for saving time, money, and energy by using the internet as a platform for various services has led to some unusual concepts. Construction firms should note that even lighting has come to the attention of service vendors.

According to the Lighting Controls Assn., LaaS (lighting-as-a-service) is an emerging business model in which the owner pays for light rather than the equipment that delivers it. The owner buys new lighting on a subscription basis over a multi-year term rather than a significant one-time capital investment. This allows the lighting upgrade to be accounted as an operating expense and paid for as a monthly fee that in turn is ideally less than the energy cost savings, generating instant positive cash flow.

LaaS addresses two major barriers to installing LED lighting in existing buildings: the initial cost of purchasing a new lighting system and fear that any technology installed today will be eclipsed by future tech. The first barrier is addressed by paying for new lighting as a monthly fee offset by energy savings. The second is addressed by either including upgrades in the contract or replacing the old system at the contract end date without being tied to it.

By reducing risk and simplifying financing, having LaaS as an option can facilitate a lighting upgrade that might otherwise be delayed or not gain approval. It is well suited to adoption of more advanced, premium system options such as intelligent control, connectivity, and data collection considered an entry point to implementing IoT capabilities.

There are two notable disadvantages. First is the owner is tied to the contract and its terms while it is in effect. Second is that subscription programs typically impose a higher overall cost than if the owner paid a lump sum upfront.

According to research firm ReportLinker, the lighting-as-a-service market is expected to grow at a CAGR (compound annual growth rate) of approximately 50.4% between 2020 and 2025. The primary drivers for the market include the increasing demand for efficient lighting systems and IoT. Incorporating IoT in the lighting system has shown a lower consumption of energy but the service’s subscription program typically imposes a higher overall cost than the owner would pay for a self-installation system, posing a challenge to the market.

LaaS is managed by third parties—usually by specialized service providers—and may include lighting design, financing, installation, maintenance, and other services. The LaaS model has become more common in commercial and citywide installations of LED lights, specifically in retrofitting buildings and outdoor facilities, with the aim of reducing installation costs. Light vendors have used the LaaS strategy in selling value-added services, such as internet-connected lighting and energy management.

Global LED use has increased substantially in recent years, rising from a marketshare of 5% in 2013 to nearly half of global lighting sales in 2019, with integrated LED fixtures making up an increasing share. Several developed markets, including the United States and Europe, are responsible for the rapid expansion of the market segment. At the same time, China has built a substantive domestic and global manufacturing base.

Lighting accounts for nearly 10% of electricity usage in households and 18-40% on commercial facilities. There is a growing need for energy saving across the globe, creating market potential. It is expected that the transition to energy-efficient lighting will reduce the global electricity demanded by lighting by 30-40% in 2030. Using as much as 50% less energy, LED lights produce brighter, clearer light without the flicker that often irritates the optic nerve leading to employee complaints about headaches and fatigue. Additionally, LED lights contain no hazardous materials, don’t flicker or strobe, and are completely recyclable.

New York planned to replace 250,000 streetlights with LEDs, to be followed by the replacement of decorative lights in the urban areas. Barcelona (Spain) deployed more than 3,000 smart streetlights based on LED technology, gathering information about pollution, humidity, noise, and the overall environment. The U.S. DOE (Dept. of Energy) anticipates that, by 2020, more than 75% of the outdoor lighting fixtures will be light-emitting diodes.

The COVID-19 pandemic has increased research on the use of UV (ultraviolet) lighting for disinfection. Light-emitting diodes that produce UV radiation are becoming more commonly available. Typically, LEDs emit a very narrow wavelength band of radiation and the small surface area and higher directionality of LEDs may make them less effective for germicidal applications.

However, with the continuing spread of COVID-19, technology vendors across the smart building sector are launching new propositions to help firms improve their buildings’ infection control. An Australian lighting services firm, Eco-E (Energy Group), is combining the LaaS business model with LED-based UV lighting products. Its Smart UVC Solution uses UV-C light that can kill bacteria and viruses on surfaces.

While high impact UV light kills 99.9% of airborne bacteria on direct exposure, it is intended for use in areas that can be closed off from humans, such as sterile processing rooms, because UV-C light is harmful to eyes and skin. Eco E’s Smart UVA Solution is designed for broader deployment across buildings as it is safe to deploy in spaces continually occupied by people. It uses safe ultraviolet light mixed with white light to kill up to 80% of airborne bacteria.

Another UV system, Nexos Intelligent Disinfection, pairs ultraviolet lighting with IoT controls to enable widespread, automated disinfection of surfaces. According to Igor Inc., the developer, Nexos Intelligent Disinfection’s PoE (Power-over-Ethernet) connectivity makes it easy to integrate several other disinfection systems beyond UV-C lighting, like intelligent air purifiers or gas vaporizers.

To mitigate the dangers of concentrated UV-C light, Igor technologists designed Nexos to connect with other smart devices, such as occupancy sensors and motion detectors. The solution can also be configured to work with smart locks and warning lights to further prevent humans from entering a space that is being cleaned. Before initiating the disinfection process, Nexos determines all safety checks are met. During the occupancy scan, the Nexos software pulls data from occupancy sensors, people counting, and door locks to determine the space is unoccupied, ensuring the safety of employees.

Compared to other types of lighting, commercial lighting tends to have a higher initial cost, longer lifespan, better durability, higher maintenance and service costs, and better energy-saving options. With increasing electricity consumption, various commercial spaces adopt LaaS-model. The energy savings and cost reductions offered by LaaS constitute an attractive offer because of the growing corporate focus on sustainability and energy efficiency. Overall cost reductions accelerate the widespread adoption of LED and LaaS by numerous commercial organizations. For instance, using LED retrofits in building exterior lighting results in a 63% reduction in energy cost.

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