Point

By Bruce Ryman, National ESCO manager,
SYLVANIA Energy Solutions Network

It’s no secret that energy is becoming a major component of our government’s plan to stimulate new technological advances and create jobs. But let’s zoom in for a minute from the “big picture” to specifically examine what reducing energy means to you, the healthcare facility manager.

Saving on energy costs has never been more important. Furloughs and layoffs are a reality, and facility managers evaluating every corner of their buildings for cost savings should start with retrofitting their existing lighting systems. The Environmental Protection Agency (EPA) estimates an energy-efficient lighting upgrade can cut a building’s annual lighting energy costs in half, typically a savings of about $.50 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.

For hospitals and other urgent care facilities that may have round-the-clock lighting requirements, switching to longer-life, efficient lighting can significantly reduce maintenance costs as well. Maintenance teams are often working with about half the staff they had two years ago because of economic conditions. From a safety and security perspective, healthcare facilities must also consider preventing costly law suits that arise out of simply letting parking lots and stairwells go unlit awaiting repair.

The good news is facility managers don’t have to approach the daunting task of upgrading their lighting systems alone. Retrofitting has never been easier with the emergence of ESCOs (energy service companies). ESCOs develop energy plans, install quality energy efficient products, may arrange financing and manage utility financial incentives to help reduce a facility’s energy and maintenance costs. ESCOs can monitor and verify a completed project’s reduced energy use and assume the performance risk the project will achieve for a seven- to 10-year period. These companies also stay up-to-date on the latest energy-saving technologies, such as LEDs, induction lighting, solar power and wind power to explore new ways to reduce energy costs.

In addition, energy efficient lighting is becoming mandatory. Government officials have moved to eliminate the use of incandescent bulbs and other out-of-date equipment within the next couple of years, and for good reason. Switching to compact fluorescent lamps (CFLs) can provide up to 10,000 more hours of light compared to 750 hours with incandescent bulbs. CFLs also use 80 percent less energy, according to the Department of Energy. An advantage for climates prone to heat waves, higher efficiency CFLs also decrease air conditioning bills as they emit less heat than incandescent bulbs. Standard linear fluorescent lamps and ballasts are also being upgraded in droves to more efficient T8 lamps, which can provide the same light using 50 percent less power with double the lifespan.

Energy-efficient retrofits have bonus green benefits too, adding an ROI of a different kind, but just as tangible. An ESCO with operations in Maryland and Pennsylvania that has more than 125 projects pending estimates it will save its retrofit customers 28 million kWh annually—the equivalent of planting more than 8,000 acres of trees and removing 4,400 cars from the roads per year. That is just the work of one ESCO! Retrofits provide real benefits from many perspectives and ultimately contribute significantly to your bottom line and the bigger environmental picture.

Counterpoint

FacilityCare, August 2009
By Ode Keil

Going green is a focus of many operational and design decisions being made in hospitals across the country. The value and consequences of making buildings and operations green is seldom questioned. One of the items being pushed for energy conservation is lighting retrofits. Hospital facility managers are being pressed to install compact fluorescent lamps in place of incandescent lamps, occupancy sensors, LED lamps, and other similar devices. Many are going ahead with programs to retrofit and install these types of devices. The purpose of this point / counter point is to question whether this is the best operational choice.

One of the primary claims related to lighting retrofits is a reduced operating cost. There is no argument that fluorescent lamps and LED lamps use less electricity to produce lighting levels similar to various incandescent lamps. The question is how long is the payback on the cost of the retrofit? The claims I am presented with on a regular basis present an argument based solely on the watts consumed. I seldom, if ever, see a case made based on the total cost of the conversion. The total cost of conversion includes the replacement of incandescent fixtures with fluorescent fixtures or installation of a conversion kit, the cost of the lamp, often the cost of an occupancy sensor as a lighting control device, and the labor to install all the above. When the fully loaded cost is considered, the picture for a retrofit is much less attractive.

I recently evaluated the benefit of installing new lighting and lighting control devices in a number of conference rooms and offices. The intent was to reduce the energy consumption by switching to compact fluorescent lamps and to reduce the time that the lamps serving the areas were on during times when the space was not occupied. Each area was served by two or more lighting circuits. Most had three-way switching. The raw cost of the installation of the devices was at least $1,000.00 per room. This included the fixtures, lighting control devices, labor, and in some cases minor renovation to repair damage related to replacement of back boxes to accommodate the fixtures and the larger size of the lighting controls. The estimated payback, based on a study of the use pattern for the current lighting, was more than 10 years.

The payback time estimate did not take into account the aging effect of frequent cycling of the fluorescent lamps by the occupancy sensor. Fluorescent lamps tend to age more rapidly when they are turned on and off on a frequent basis. This would lead to a lower life expectancy than manufacturer data suggests and as a result the payback period could be increased.

The likelihood that the space would remain in use for the same purpose without being renovated for that span of time is very low. Assuming that the fixtures are likely to be replaced or upgraded to a different lamp technology as part of a renovation, the conversion is more of a goodwill gesture than a financially sound decision.

As lamp technologies and lighting controls evolve and the cost begins to come down to the range of current incandescent bulbs, the argument for changing lamps and lighting controls as part of a retrofit may be strengthened. Until they do, hospitals need to examine closely claims made by lighting suppliers to determine if lighting retrofits represent the true cost of ownership.