Performance Contracting/Financing
Lighting Upgrades
Radtke And Associates, Inc. is working with organizations to upgrade their lighting performance. Projects such as gymnasiums can be upgraded with no capital outlay or by cost savings payments. The following is the guideline for developing these projects. The Kankakee Valley Middle School project is an example of a project that took advantage of this system.
Overview
Introduction
Improving lighting systems in facilities can result in cost savings, occupant comfort, improved productivity, and environmental accountability.
Project Process
This guide provides a structured way to effectively identify, design/plan, implement commission and maintain lighting improvement projects for maximum benefit. The process includes the following steps:
- Identify potential lighting projects
- Analyze and prioritize potential projects
- Evaluate existing lighting system
- Determine energy use and cost baseline
- Identify funding options
- Prepare Energy Effective Lighting design and specifications
- Procurement and installation
- Commission completed lighting improvements; develop Operations & Maintenance Plan
- Verify benefits
Identify Potential Lighting Projects
Consider the following factors when identifying potential lighting projects:
- Security and safety requirements
- Codes and standards
- Organizational restrictions
- Mission requirements
- Other construction activities, building occupancy changes
- Need for relighting (redesign) instead of, or in addition to component process
- Incorporation of available daylight
- Need for complete system improvement
- Control strategies/operation schedule
- Future use of space
- Energy/labor costs
- Life-cycle cost
- Facility access
A variety of software products are available to assist in identification of potential lighting projects. Others are available by private industry for general commercial use.
Analyze and Prioritize Potential Projects
Conduct a more detailed analysis to determine the cost effectiveness and benefits of each option. Tangible benefits should include energy use, disposal costs, and maintenance costs in a life-cycle cost calculation, or simple payback. Also consider other less-tangible benefits such as increased worker productivity and improved comfort and space appearance.
The following factors are generally used to prioritize projects based on facility needs.
- Initial cost
- Life-cycle cost
- Potential savings
- Facility access
- Organizational needs
- Effect on other projects
Evaluate Existing Lighting Systems
Perform a lighting audit, which is an accounting of current lighting equipment and controls. The lighting audit requires that the auditor:
- Count fixtures, lamps, and ballasts
- Characterize lighting controls and operation
- Identify environmental concerns (PCB's, mercury volume)
- Evaluate operations and maintenance (O&M) schedules
- Identify unsafe conditions
- Consider occupant satisfaction/special concerns; characterize lighting quality
- Evaluate electrical/fixture support conditions.
Determine Energy Use and Cost Baseline
Before initiating any projects, identify current lighting energy use and other related costs to establish a baseline for evaluating potential savings opportunities and assessing other project benefits. To determine energy use and related costs, evaluate:
- Historical energy use or other resource consumption
- Real-time data to characterize current energy use
- Energy, O&M, and equipment disposal rate structures Connected load
Historical data can include energy consumption, O&M costs, facility supply costs, and more elusive items such as morale and occupant comfort.
Identify Funding Options
- Internal O&M or utility budgets
- Direct appropriations
- Utility incentive programs
- Energy savings performance contracts
Prepare Energy Effective Lighting Design
Energy Effective Lighting provides both energy-efficient and high-quality lighting, contributing to an improved work environment. Lighting has a powerful impact on building occupants, affecting health, safety, mood, and the speed and accuracy of task performance. Lighting system elements that impact humans include:
- Room surface brightness
- Glare
- Task luminance
- Light distribution
- Color quality
- Visual interest
- Flicker
- Controls
- Daylighting
These elements affect visual performance, psychological needs, lighting preference, and circadian rhythms.
Develop contract language and specifications. Tight specifications are the backbone of a successful project. The Specification for Lighting and the associated technical notes provide the technical back-up needed to help implement a conceptual design.
Procurement and Installation
Time to start the implementation phase of the project:
- Solicit proposals
- Evaluate proposals
- Select contractor
- Schedule the work
Commission completed Lighting Improvements
To complete the commissioning process:
- Verify work is completed and meets specifications
- Perform operational checks
- Prepare an Operation & Maintenance plan
Verify Benefits
Verifying net energy savings, reductions in disposal quantities and costs, avoided environment hazards, improved occupant comfort, and increased productivity is an important part of lighting improvements. Documenting benefits is also important. The general steps include:
- Collect time-of-use and one-time resource use data
- Complete use and satisfaction surveys
- Monitor actual resource billings
- Documents activities, savings, and benefits
Financing
Internal O&M Budget
The internal O&M budget is often the easiest way to get project funding but is frequently inadequate. If planned early in budget process, these funds can be used to replace some lighting systems as part of general facility maintenance.
Direct Appropriations
Historically, direct appropriations have provided most of the energy efficiency financing. Direct appropriations do not incur interest charges and allow the district to retain all savings from cost-effective renovations.
Utility Incentive Programs
Utilities often offer programs to their customers that may include rebates and/or energy services. These programs include financial or other incentives to customers to install energy-efficient equipment in existing buildings. Incentive programs provide a technical resource or funding source that can be leveraged to help a district to implement an energy project. Utilities may pay the capital costs of new lighting in consideration of the energy savings the retrofits will produce.
Energy Savings Performance Contract (ESPC)
Under ESPC contracts, energy service companies (ESCOs) assume the capital costs to install new energy-efficient equipment. The ESCO guarantees a fixed amount of energy cost savings over the life of the contract. Energy cost savings are any reduction in the cost of energy used in the buildings. The ESPC contract specifies the percentage of energy cost savings as their fee and the method for determining the value of such savings, which may vary from year to year. The ESCO is paid directly from the energy cost savings and the district retains any remaining savings.
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