For an upcoming article for tED Magazine, I recently had the opportunity to interview Keith Eagle, Vice President & General Manager, US Professional Channel, Signify, on the topic of continuing opportunity with commercial lighting upgrades as the LED installed base grows. Transcript follows.
DiLouie: I’ve been hearing a narrative developing in the lighting industry that the low-hanging fruit has been plucked regarding traditional-to-lighting retrofits, slowing sales. How would you respond?
Eagle: It depends on which area of the country you’re looking at. Most of the ‘low-hanging fruit’ in traditional lighting-to-LED lighting retrofits has been captured in the Northeast and on the West Coast. These regions historically have had higher utility costs, which opened the door for rebate programs about ten years ago, providing a greater return on investment for LED lighting in those regions.
DiLouie: Where are the biggest opportunities for retrofits of traditional lighting to LED today?
Eagle: Building on the above, geographically, there are greater opportunities for traditional-to-LED lighting retrofits in the Southeast, where utility rebate programs were not as aggressive as the Northeast and on the West Coast.
DiLouie: What opportunities exist for going back to first-generation LED adopters and upgrading to new LED lighting? What would be a few examples? Where are the biggest opportunities?
Eagle: LED lighting solutions continue to become even more innovative and efficient from an efficacy perspective (lumens per watt). Because of that, LED lighting installed eight to ten years ago is a prime candidate for an upgrade today – you can still realize an attractive return on the investment. In addition, there are now opportunities to get more out of your LED lighting installation than basic illumination and energy savings with the integration of controls and connected systems.
In just the last few years, we have seen an optimization in the lighting controls architecture, transitioning from ceiling-mounted sensors wired to a circuit control to luminaire-level lighting controls (LLLCs). With this connected lighting system, end-customers can create flexible lighting zones in their facility to support smarter operations, such as optimizing space usage or their real estate footprint, enhancing employee engagement or their comfort and wellbeing in a space, or driving deeper energy savings with other building system integrations.
DiLouie: Several states have announced severe restrictions on the sale of fluorescent lamps. How do you see this affecting the LED retrofit market?
Eagle: States like California and Vermont (where legislation prohibits the sale of linear and compact fluorescent lamps beginning in 2024) will accelerate LEDification.
DiLouie: A challenge with lighting upgrades is they boil down to numbers, typically cost versus energy savings, and don’t account for benefits that are more difficult to value, such as occupant satisfaction, beautification, health, and so on. What advice would you give to distributor salespeople to sell lighting that accounts for these benefits?
Eagle: Start by partnering up with your local lighting sales agent or lighting manufacturers like Signify for value proposition training and education. If you understand the ins-and-outs of the value proposition, you’ll be able to better drive the conversation around why an LED and/or connected LED lighting retrofit is the best solution for your customers.
Once you’ve done this, get yourself in front of the right stakeholder. For instance, if your end-customer has a Sustainability Manager or a Chief Technology or Information Officer, it would be pertinent to connect with them on the potential for data connection and insight analysis. This is a different audience than the market addressed 8 to 10 years ago to discuss capabilities and benefits outside of energy efficiency and return on investment.
DiLouie: Lighting controls are left out of some retrofits due to cost relative to solid energy savings but for a smaller load. What opportunities exist for incorporating lighting controls, and how should distributors sell them? What statutory requirements may apply, such as energy codes?
Eagle: The greatest opportunities for incorporating LLLCs lie in owner-occupied commercial spaces, like schools or offices. LLLCs can help enhance operational efficiencies, lower maintenance costs and drive occupant engagement, as well as maximize energy savings with features like adaptive dimming and dwell time.
DiLouie: As with non-energy benefits of good lighting design, lighting controls offer non-energy benefits such as color tuning and data collection. What upsell opportunities exist for distributors here, and what advice would you give salespeople to sell these solutions?
Eagle: Capabilities beyond basic illumination, like indoor navigation and circadian lighting, for example, will become of increasing interest as the commercial design landscape continues to evolve. Therefore, distributors should play up the flexibility of today’s lighting controls systems and how they’ll equip buildings to be future-ready.
DiLouie: Do you see an aftermarket developing for installed LED lighting, whether it be driver replacement or new linear replacement lamps? How substantial is this market, and what is the best way to service it?
Eagle: An aftermarket exists for LED lighting installed eight to ten years ago. This is largely because of the energy-efficiency gains made in recent years in the latest offerings on the market and increasing interest in controls-/systems-based solutions.
DiLouie: Some jurisdictions are looking at implementing energy codes addressing existing building energy consumption or rules regarding carbon emission reporting and penalties. Meanwhile, electrification of transportation means more buildings will install electric-vehicle charging stations, imposing a high potential cost for new electrical infrastructure. Do you see these peripheral market forces impacting the economics of energy efficiency such as lighting upgrades?
Eagle: Customers are increasingly looking to support a sustainable future: LED lighting and controls are an effective means for driving energy efficiency. This energy reduction can provide capacity for the existing utility grid to take on additional load required for other electrical demands, such as EV charging stations. Continuous upgrades can help lay the foundation required for businesses to start their journey and find synergies with other technologies.
DiLouie: Overall, what can distributors do right now to ensure they take full advantage of the existing building lighting market and generate sales?
Eagle: Be proactive! If a customer is looking for a fluorescent linear or HID lamp, use that as an opportunity to see if they might instead be interested in LED or connected lighting. Communicate the benefits of the latest innovations – and understand their objectives – before you simply take an order.
DiLouie: If you could tell the entire electrical industry just one thing about selling LED retrofits, what would it be?
Eagle: It is time to learn more about sustainable lighting solutions and controls strategies. End-user customers are pushing the electrical industry towards sustainability, whether that’s using recycled packaging or finding ways to lower their carbon footprint – they want to know how they can be more environmentally responsible.