Lighting as a Service

Subscribing to the future

Radio Rentals. Remember them? That high street brand of the ‘60s, ‘70s and ‘80s (although formed much earlier), which allowed you to rent, rather than buy your household appliances like TVs and VCRs.

In 1968, Thorn Electrical Industries purchased the retailer, and whilst they may now be obsolete – apart from Down Under – Thorn has continued to be ubiquitous within the lighting market as luminaire (and once-upon-a-time lamp) manufacturers.

It’s ironic then that we’re now seeing the re-emergence of this business model within the lighting industry, under the guise of Lighting as a Service (LaaS). A relatively simple idea (albeit different suppliers offer slightly different flavours), LaaS allows light and luminaires to be charged on a subscription basis. Or, to put it another way, it allows an end user to rent the light fittings.

Rental of commodity products is back. And with a BANG.

Subscription services we all know today range from Netflix to Cloud Storage – even software’s in on the act. In many ways, LaaS follows the same model. What the end user does is pay a regular bill according to either the quantity of luminaires, or energy used or Lux level achieved, depending upon the supplier.

The cost is usually linked to the expenditure saved from using less energy. Or, in simple terms, you pay the bill with the money you’ve saved by reducing your energy consumption over a pre-agreed fixed-term. Or, as the marketeers put it: “it pays for itself”.

This certainly seems like a great idea, and with the advent and development of LEDs it’s been necessary for luminaire manufacturers to re-evaluate their business model. Why? Well, light fittings lasting many years will ultimately lead to a declining marketplace for luminaire manufacturers (The New Yorker’s covered this subject in two excellent articles: 5 October 2016 / 14 July 2016), and “renting” luminaires provides a nice and steady income stream. And, there’s nothing better for business than a predictable cashflow!

It sounds like a win-win for manufacturers and end users. But is it?

Firstly, LaaS can only work for projects of a certain size. Smaller setups just can’t offer the return on investment so it’s unlikely they would qualify.

Secondly, while LaaS works on paper, many of the schemes I’ve seen so far are over-optimised: either illumination levels have been reduced to the point of “gloomy” or spaces have become bland and uninspiring. The latter is all well and good in a railway shed in Crewe, but perhaps not so good for a retailer, hospital, school or office. And that’s my point: these are big projects, with big impact.

So surely this represents an opportunity for the lighting designer? A good designer who understands contrast, drama, texture, tone, visual interest – and any other lighting-related adjective – would do well to understand that LaaS is happening, and that there’s a need for our services to ensure new lighting solutions not only reduce lighting energy consumption, but also improve the quality of light within a given space.

It seems that most LaaS provision is offered by manufacturers, effectively tying a user into a single-source supply chain. Several independent companies also exist, but many simply strike a deal with manufacturers anyway to create joint ventures.

This obviously impacts  lighting designers, who, by nature, don’t like putting the proverbial square pegs into round holes. We like independence to specify several suppliers on a project – maximising budget, and providing an uncompromising technical performance and aesthetic.

So how do we make this work? How do lighting designers get in on the action?

With LaaS it’s unlikely the traditional lighting consultancy model of fixed fees will work. I suspect we’ll need to explore a way of undertaking the design and charging our fees back as part of the monthly rental cost. Not only will this mean partnering with suppliers, it will mean taking a long-term view on obtaining fees. But it’s easy to see how our expertise could benefit such projects: we would be able to bring a creative flair to what would otherwise be bland schemes, no doubt full of high-bay or lay-in ceiling grid luminaires producing low-energy, homogenous illumination. Dull and unimaginative.

This has the potential to revolutionise the way we work and the relationship between designer, supplier and end user. Particularly, if instead of disappearing at the end of the project, the designer is committed to monitoring, tweaking and finessing the lighting scheme throughout its life. And we’d be paid monthly as well!

How often do lighting schemes fall into disrepair with lighting designers powerless to affect it? Well, another benefit is that it brings into focus the relationship between lighting designer and facilities and maintenance teams. If the fee is being paid over a long period of time it’s in our interest to keep the installation clean, focused and well maintained, because it keeps it efficient and consequently savings (and therefore fee) are maximised.

Of course, I could be talking a load of tosh. In a couple of years when R&D budgets have been recouped it’s possible costs will tumble. If so, and the relative price reduces, will we see a swing from renting luminaires back to owning them outright, and a subsequent “goodbye” to the lighting rental market…isn’t that what happened to Radio Rentals after all?

Possibly, but it’s also feasible that the ever-increasing price of energy may prevent this. But that’s also what they were saying in the 1980s…