Global LED lighting market size was valued at $10.85 billion USD in 2020. Experts estimate that LED lighting will see steady growth, with a compound annual growth rate (CAGR) of 20.4% between 2021 and 2028.
The value proposition of upgrading city lighting to LED is obvious. Smart cities are quick to adopt this technology alongside other efforts to reduce their carbon footprint and embrace new information and communication technologies. However, many municipalities are not aware that they could be saving millions of dollars by partnering with the right LED providers.
What Are Smart Cities?
According to the Internet of Things Agenda: “A smart city is a municipality that uses information and communication technologies (ICT) to increase operational efficiency, share information with the public and improve both the quality of government services and citizen welfare.”
But what does that really mean? In practical terms, a smart city uses information technology and data to enhance the quality of life for its citizens, increase value and prosperity for businesses, and improve efficiencies citywide.
Professor Dr. Rudolf Giffinger and his European Smart Cities research group developed a guideline for six key indicators of a smart city. Many have modeled these areas when looking to improve the infrastructure and efficiency of their municipalities.
- Government - A smart government focuses on how it can better connect with and relate to all of its residents, businesses, and organizations.
- Economy - A smart economy focuses on increasing the attractiveness for new businesses, investors, and rising talent to live and work in its city.
- Environment - Smart environment focuses on innovation and technology to lean into sustainability efforts that improve living conditions for all citizens and visitors.
- Living - Smart living initiatives focus specifically on improved accessibility for all citizens, with safe and smart buildings that are inclusive to all ages and demographics.
- Mobility - Smart mobility means faster, cheaper, and higher quality urban transportation that operates in an environmentally friendly manner.
- People - Smart people initiatives are designed to improve human interactions across areas like education and labor market opportunities.
Within these six fields, various subcategories contain actionable plans and specific measures to meet the targeted goals. One of the most important and noteworthy achievements in the Environmental category is adopting energy-efficient lighting technology. This is, without a doubt, only achievable with LED lighting technology.
The Cost of LED Lighting for Smart Cities
Upgrading a municipalities’ lighting infrastructure citywide is a colossal project. It requires extensive labor by skilled electricians, and when bought outright, can rack up millions in expenses. Not to mention, the unpredictable costs allocated to parts and labor over time.
Many global cities are now finding out the true cost of their LED lighting upgrade, and some have been less fortunate than others.
When the Lights Go Out
In 2016, Detroit implemented a $185 million overhaul of their city lighting. Prior to the upgrade, 40% 88,000 of their streetlights didn’t work, and the new LED lights were installed with the promise that they would last a decade. This installation made Detroit the largest U.S. city to have 100% LED lighting.
However, just a few years later, roughly 20,000 “new” lights are dimming or defective. The city’s lighting authority filed a lawsuit, hoping to cover the $7 million in repair and replacement costs. They were eventually awarded $4 million, but were left responsible for all maintenance costs.
Berkeley, California experienced similar problems when roughly 7,000 of their newly installed LED streetlights began to dim. A city spokesman noted that the city was seeing one failure every other day on average. Although the LED company agreed to cover the cost of the lights, negotiations were ongoing to determine who would have to foot the bill for labor.
Chicago, Miami, Halifax, Bristol, Paris, Glasgow, and Copenhagen have all made upgrades to their municipalities with LED lighting as one of their first steps towards becoming a smart city. There is so much growth ahead, but are these municipalities weighing their options? What if there were more benefits to LED lighting than energy efficiency?
How Does Lighting-as-a-Service Work for Cities?
LED lighting is a foundational asset to becoming a smart city. Yet, many municipalities are spending far too much capital, only to find out that they will have to invest even more in the event of faulty lighting or repairs that come too soon.
There is a different way to implement LED lighting technology that eliminates this ongoing worry about maintenance and the quality of the lights themselves. At Future Energy Solutions, we’ve built our business on our Lighting-as-a-Service (LaaS) model. This is a no-investment scenario that offers citywide LED lighting infrastructure and puts money directly back into the city’s hands.
The FES Installation Process
When you partner with FES, we make the process as simple as possible. First, we audit your existing energy usage and examine site details so we can forecast your savings. Then, we use this data to design a zone-by-zone lighting solution that is guaranteed to light up your city with brilliant LED lighting.
Once we know what your lighting upgrade requirements are, we procure and supply all the fixtures, bulbs, and accessories needed, and have them sent to a location of your choice. FES mobilizes an installation team to install the entire lighting system throughout your city and disposes of the old lighting in an environmentally friendly way.
As soon as you make the decision to upgrade your lighting to LED, we make it as easy as possible to get the project completed.
Why Choose LaaS?
On top of handling the savings forecast, design, and installation, we offer our LaaS partners even more tangible benefits.
- Our LaaS partnership is offered to you for zero capital investment. You can upgrade your municipal lighting without spending a single dollar. Out of the total energy savings captured throughout your city, we share in the benefits. You receive a 25% return on NO investment and we receive 75% of the energy savings.
- We cover the costs of maintenance for up to 15 years. That means any time you need repair or replacements, we will hire a local contractor to handle it for you. We know the importance of keeping the lights on and running optimally, so we make it a priority that this is as effortless as possible.
What will you do with the sum of your energy and maintenance savings? This can add up to be a significant amount of money that your city can redirect to other improvements and upgrades directly contributing to other smart city initiatives.
If you are ready to discuss partnering with FES for your municipal LED lighting upgrade, reach out to an energy savings specialist today.