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LED Lighting procurement. Why “LaaS” is useful in Real Estate.

Buying LED lighting is not a big deal for most companies. A new fitting is purchased and it won't require upper management sign-off or a business case. This leads to complacency, and as such, the opportunity to enact significant change to your energy bills floats by. But on the flip side, opportunities for large-scale LED lighting purchases can be few and far between and difficult to justify. So let's explore your opportunities to enact change.

At Centropi, we specialise in manufacturing investment-grade grade lighting for direct purchase and via Lighting as a Service (LaaS). We know that lighting upgrades might not be a priority for you and your FM team, but that does not mean you can't be armed with the information when the time comes.

We want to provide understandable, accurate information on lighting in large-scale real estate so no matter what type of lighting you have (or want to have), you can make informed decisions for your facility!

Help Me Decarbonise!

Large-scale purchasing of lighting is quite rare. Why?

Simply put, because of a lack of opportunity. But also due to a lack of awareness of the benefits.

Replacement light fittings are mostly purchased ad-hoc and at specific times.

Opportunity #1: New project purchases

In a building's lifespan, this is the first time that light fittings will be purchased. At this point, most light bulbs are supplied with the light fittings themselves, and to keep costs down, the manufacturers may not install the best quality bulbs. So as a facilities manager of your company's new building, you inherit whatever was designed, specified, and installed by the design and contracting team on the project.

What impact does this have on you? You may end up with inefficient lighting, which drives up your monthly energy bills and increases maintenance costs.

What can you do? As the client of the new project, you can influence decision-making during construction. Identify high-quality products you know will lower energy bills and maintenance. Be a stickler! Those pesky contractors can sometimes look to switch products out for cheaper alternatives. So stick to your guns.

This is the same situation if you rent a lease space in which you will fit out with a contracting team. Do it right the first time.

Are the light bulbs in your new energy efficient building any good?

You inherit the lighting designed, supplied, and installed by the project team.

Opportunity #2: Retrofit purchases

Leasing a space already fitted out is a great way of keeping costs down, but you will Inherit whatever fixtures and fittings the previous tenant installed. This includes the lighting systems. Maybe the lighting is the wrong colour or inefficient, so you upgraded it.

This is the second opportunity for a large-scale purchase. In this scenario, you can control what lighting is installed and how they are purchased. So do your research.

The Singapore National Environment Agency stated in 2018 that all bulbs sold from 2023 onwards must be of minimum LED efficiency. This is great news and guarantees minimum performance. But there are still opportunities to reduce your energy bills even further by using more large-scale light fittings.

If your business leases property, you may inherit old fixtures & fittings.

The bits in-between: Ad-hoc purchases

This is where most purchases occur. Your business has been in the same space for a long time, and you are not the first facilities manager. At this point, you don't have the means or reason for a large-scale purchase, so you do what has always been done and change light fittings as and when required.

But is it possible to justify a large-scale purchase if you know that your company is looking for savings? YES!

What is the "as a Service" (aaS) Model?

The "as a Service" (aaS) model is a product of the digital age of modern business.

The aaS model was developed to provide businesses with an alternative to buying products or services, often with high upfront costs.

In 1999, Salesforce launched its customer relationship management (CRM) platform as the first (software)aaS solution.

Previously, software was sold as a physical product and installed on-site. However, this process was expensive and time-consuming. SaaS changed everything by offering a subscription-based model that allowed organisations to access software online. For software, this is now the most flexible method of purchase.

The aaS model has changed the way people view purchases. The subscription-based model in which consumers pay a fee for a set period has coincided with the rise of the "sharing economy." This has given rise to the term "subscription economy," as businesses of all types and industries have begun to take a bite out of the traditional ownership economy.

The aaS model offers a low barrier to entry as customers only need to pay for a subscription and not for hardware, software, or other costly capital investments to get started. It is a flexible, cost-effective, and hassle-free alternative for customers who are not willing to make large upfront Capex purchases.

Why is the "as a Service" (aaS) model useful in Real Estate?

So can we apply the aaS model to large-scale purchases to bring the benefits, without the upfront costs? Yes. Absolutely.

The aaS model could be applied to anything from desk chairs to water coolers. Even lighting! For the model to work, the products need to be high quality. If the turnover is too high or maintenance is too labour-intensive, then the aaS model is not tenable for the supplier. And for the customer, it has to bring time and cost savings benefits.

What is Lighting as a Service (LaaS)?

LaaS is a large-scale upgrade of all your light fittings, which you pay for via a fixed monthly fee.

Like a traditional SaaS product, nothing is paid upfront, and it fundamentally outsources your lighting - supply and maintenance - to a 3rd party. So for the service period - normally 5 years - you will never have to change light fittings again!

The other benefit is the potential savings. If investment-grade lighting is used, your monthly energy savings will pay for the service, and you pocket the difference! But ensure you know your fittings, as even LED fittings are not all created equally.

The savings cover the monthly service fee.

So keep this article in your library so that when you next buy a light fitting, you might think a little differently.

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