Orion Energy Systems Inc. (Orion Lighting) and Arizona-based energy solutions firm, BC Energy Solutions, announced that from October 2018 to March 2019, they completed $4.9M in LED lighting upgrade projects across nine states funded in part by helping clients secure nearly $1.3M in electric utility rebates.
The rebates provide added financial incentives for companies to prioritize their investment in converting to LED lighting systems and controls. In aggregate, the utility rebates amounted to over 26 percent of the total installation costs of the projects. Customers included a diverse base of businesses including manufacturing, paper production, grocery distribution, aircraft maintenance, auto parts, medical supplies, trucking and logistics.
These customers were drawn to Orion and BC Energy Solutions because they recognize the benefits of LED lighting, which consume 50- to 70-percent less electricity to deliver the same or better illumination. Some of the companies were also attracted to Orion’s IoT smart lighting controls which can provide both lighting control options (such as occupancy, daylight, or schedule control) and data collection capabilities for facility managers to analyze other areas of their operations.
With a life of 10-20 years, the companies will realize a return on their investment from these LED lighting upgrade projects within 3-5 years – before any benefit from utility rebates.
Why do utilities offer financial incentives for deploying LED lighting fixtures that consume less energy and therefore generate less revenue?
The answer is that many utilities are working to manage/reduce peak energy demand amongst their customers. Peak energy demand typically exists for only a few hours per day and otherwise demand for electricity is far lower.
Because electricity use continues to increase with an expanding population and growth in electrical devices, utilities face enormous investment in new energy generation capabilities to keep up with peak power demand requirements. Rather than make large investments to support high usage levels occurring just a few hours per day, many utilities find it more cost effective to invest in energy efficiency rebates or reward customers for time shifting their energy usage away from peak hours, to reduce peak demand and the large capital investments required to support peak power levels.