Citing a growing corporate consensus about the financial benefits of energy efficiency, Osram Sylvania, Danvers, Mass., has launched an alliance with energy service companies (ESCOs) nationwide to pursue energy-efficient lighting upgrades in commercial and institutional facilities.
Sixty ESCOs have signed on for Sylvania's Energy Solutions Network since its inception last fall. The company hopes to double that number over the next year, in the second phase of building out the network, says Bruce Ryman, national ESCO manager for Osram Sylvania.
“The Energy Solutions Network is an energy-efficient marketing, project development and installation initiative focused on delivering reduced energy use and costs to building owners nationwide,” said Bruce Ryman, national ESCO manager at Sylvania. “The U.S. EPA estimates an energy-efficient lighting upgrade can cut a building's annual lighting energy costs in half, typically a savings of about 50 cents per square foot. Upgrades deliver a two- to three-year payback, a 30 percent to 50 percent return on investment and positive cash flow that drops directly to the bottom line.”
ESCOs have been active in promoting and managing performance-based energy contracts for a couple of decades now. Their primary role in the market is to develop, install, arrange financing and manage utility incentives for energy efficiency projects to reduce a facility's energy and maintenance costs.
Osram Sylvania's network program focuses on small to mid-sized ESCOs, offering them preferred benefits including a dedicated Sylvania ESCO management team, field sales, application engineering and training options as well as marketing programs to support development of energy-efficient lighting upgrade projects.
Distributors don't have a formal role in the program at this point, but their involvement is key to making it work, says Ryman. “We do have some info in the member binder that points to how ESCOs and distributors can team up for lead generation, enhanced technical support, identifying the best electrical contractors, etc.” Direct involvement with distributors will be part of the second phase of the Energy Solutions Network launch, he added.
“Distributor participation is key to the success of this program as they not only supply the lamps, ballasts, fixtures and other materials but they provide the link for project management of materials and delivery to the job site as well as provide technical support,” said Ryman. “Distribution would also be instrumental in providing leads and in assisting with sales calls introducing their customers to the ESCOs and helping educate their customers on how they can help them reach their energy, environmental and sustainable goals.”
Some distributors have come to view ESCOs as competitors because some of them try to buy direct from manufacturers, but Sylvania believes that distributors could benefit more by building relationships with ESCOs. “The key is for the distributor to get involved and build the relationship with the ESCOs early, as they are a tremendous resources for several of their customers and can provide a great deal of help and generate business that would not be possible without the ESCO model. Osram Sylvania is hoping they'll see the benefits of working together to grow business in a challenging economy.”
As evidence that lighting upgrades and other green building technologies have moved solidly into the economic mainstream, Ryman noted that a recent study conducted by McGraw-Hill Construction Research & Analytics for Siemens Building Technologies found over half of Fortune 500 CEOs and CFOs either strongly agree or agree that energy-efficient building technologies lower operating costs.
One benefit to allying with ESCOs to pursue lighting upgrades is, of course, the opportunity to get some of Osram Sylvania's newest lighting products installed more widely. “We are expanding our line of high efficiency controllable ballasts like our PowerShed and PowerSense products,” Ryman said. “These products expand the ESCO's offering to provide their customers with much more dynamic lighting solutions than just the standard lamp and ballasts retrofit. We are also working on improvements in LED technologies to help bring these lighting solutions to market faster and we are constantly working the existing lamp technology to create more sustainable lamp choices for our customers.”