What Is Lighting As A Service (LaaS)?
October 29, 2020
Companies are always looking for ways to save money. Businesses don’t want to cut corners, it could put employees at risk, but they do want to reduce operating costs. One innovative way is to participate in a lighting as a service (LaaS) program.
If you’re unfamiliar with LaaS or not sure how the service works, you’ll find all of the information you need in the following article.
What is Lighting as a Service?
Lighting as a service companies provide cost-effective solutions to businesses that help free up capital for other uses. The service does this by eliminating necessary maintenance on lamps and fixtures, while also lowering energy consumption costs.
The service is a subscription that includes everything a company needs in regard to lighting. New energy-efficient lighting will be installed throughout the building, at no up-front cost to the business. Instead, the organization makes monthly payments to the service provider that covers the cost of the new lamps, fixtures, installation, and scheduled maintenance.
All companies are responsible for are turning the lights off and on, along with staying current with their monthly subscription. Since the lighting program is designated as a service agreement, it is referred to as an operating expense. Payments for the lighting service can be deducted from the organization’s net income, unlike some capital expenses.
How LaaS Works
If you’re not sure what LaaS is, it’s the acronym for lighting as a service. As a subscription-based service it was designed to make LED lighting affordable for all businesses. Since the service is designed around monthly payments companies do not have to come up with the funds upfront. It’s an affordable option compared to paying for the complete project when the installation is finalized.
LaaS provides two services that financially benefit companies.
Since you’re not paying for the upgraded lighting in a lump sum, that capital is still available for other expenditures. The money that the business saves on reduced energy costs can be put aside to cover the service subscription costs. The installation and lighting fees often do not cost organizations a large upfront amount, making it one of the best financially sound investments for any business.
To learn more about what your overall energy savings could entail, we suggest reviewing our LED Education Center for an in-depth look at LED retrofits.
Not even LED lighting is immune to occasional problems. Lamps can burn out and fixture can need replacing, to name a few potential issues. When the building’s lighting is on the fritz daily operations are often slowed or stopped. Companies lose money when employees can’t perform their assigned tasks.
Stopping to fix the lighting means that the facility manager’s attention is diverted from other fields, and additional problems can develop without oversight. The lighting as a service companies are not only responsible for performing routine maintenance but are also on-call to respond quickly to any problems.
Upper management won’t have to worry about the business’s lighting. Routine maintenance is scheduled into the service agreement. Operations can continue as normal without worrying about lighting failures.
When it comes to LED’s and savings, the potential is huge. Besides your energy savings and performance enhancements, you will see significant savings from your maintenance. Have you read, Saving Money with LED’s: Maintenance Expense? This article will walk you through your potential maintenance savings. Plus, there are graphs! Who doesn’t love a graph?
The Future of LaaS
Lighting as a service is relatively new, but LaaS as a business is growing quickly. More companies are realizing the benefits of letting a service manage their lighting. In 2016, when LaaS was introduced, the service was estimated at $35 million. However, by 2025 it is projected to become a $1.6 billion industry.
Investing in Lighting as a Service
Whether you’re a small business or a large corporation, it makes sense to invest in a monthly lighting as a service subscription. There are no large payments due, at the start or the end of the project. You pay a fee every thirty days for service and maintenance. Often, the money you save using LED lighting covers the subscription costs. You’ll still have capital from day one to invest in other areas. To speak with one of our Lighting as a Service specialists, call Action Services group today at 800-223-0982 or email firstname.lastname@example.org.
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