The Michigan lighting eco-system has a wealth of talented professionals, innovative products, and companies that drive investment in the State of Michigan. In fact, there is even a Michigan Lighting Hall of Fame to honor individuals who have made significant contributions to the lighting industry. This community is filled with a variety of stakeholders—including the Illuminating Engineering Society sections of Detroit and Grand Rapids; the Michigan Solid State Lighting Association; and a number of start-ups and educated designers. The community has also helped produce demonstration centers, and events, such as the annual Michigan Advanced Lighting Conference.
As advanced lighting technologies accelerate at warp speed, the obsession with the latest nuances, costs and compatibilities can steer it away from the real focus – people. However, Michigan’s robust lighting industry is poised to help building owners and managers make quality lighting decisions – decisions that put users (people) first by taking into consideration the full cost and capabilities of a lighting system.
Evolving ROI – Return on Intelligence
Most lighting investment decisions are made when they make financial sense, and most industry professionals use a Return on Investment (ROI) metric when making these choices. Professionals evaluate the total cost of a lighting product by analyzing key factors specific to the application such as initial cost, energy savings, and maintenance considerations. They also incorporate financial goals specific to the client’s budget that plan for the long term (e.g., extended warranty) and take advantage of rebate and incentive programs. However, as lighting technologies advance, new factors must be considered when calculating ROI. Here are some key considerations:
- Leverage All Incentives – Rebate programs, incentives, or LEED goals can all impact the selection of the lighting system and controls – and therefore the ROI. It’s good to review all of this as early as possible.
- Account For Driver Life – It’s fairly common knowledge now that drivers are most often an LED fixture’s weakest link. In fact, the Department of Energy reports that as of 2013 drive failures made up 52 percent of the luminaire. It’s important to factor in a cost for driver failures that might occur beyond a warranty period.
- Warranty Details – Often a product can be warrantied for a given amount of time but the owner may still be responsible for labor. If this is the case – which is a common arrangement – a cost to the owner must be properly factored into the ROI.
- Replacement Parts – Many new LED luminaires are designed and produced as a complete system, making it impossible to simply replace “parts”. Essentially, the product is designed to be completely replaced at the end of its useful life – an important shift taking place in the industry. When calculating the 10-20 year cost projection of a lighting system, it will be important to take this into consideration. In the past, it was possible to simply replace a bulb or ballast. Reputable manufacturers are equipped to answer questions about serviceability, replacement components, etc.
To learn more about best practices for conducting an economic analysis of lighting, see the Illuminating Engineering Society’s recently revised guide.
Lighting is about People’s experience
Beyond the number crunching and navigating the constantly evolving advances – the end goal of any decision maker regarding the lighting system of a building should be about the people who occupy, own, maintain, and pay for the space. We’re lucky in Michigan to have so many resources to have a productive conversation about lighting. Tapping into this talent to help understand the full spectrum of costs and considerations will produce the best possible outcome.
For a comprehensive list of things to consider, the Department of Energy offers a great “What to Ask” list for lighting designers and specifiers.
The adoption of new lighting technology is a simple two-ingredient recipe. It needs to work for people. And, most likely the investment needs to make financial sense.