Lighting as a Service — What It Means & Why It’s a Good Business Move
Have Lights Will Travel is a Nevada lighting contractor specializing in lighting maintenance and lighting service. We perform a number of lighting retrofits, and today, we’re explaining lighting as a service, or LAAS. It’s a term that describes a service contract, which can have a varied term — over two years, three years, five years, all the way up to seven years. Here’s why lighting as a service is such a good business move.
LAAS and Retrofits
Let’s say you want to retrofit your property to brand new LEDs. You’re interested in the energy incentives, the rebates, the brighter lighting to increase your property’s value, all of the benefits of LEDs. To do this, you’d typically need an outlay of cash. Sometimes it can take up to $100,000 if you have a big property. And the question is, where does that money come from?
Usually it’s from a few different places:
• You have operating income in a bank account that you can use as an investment to your property.
• You secure financing through the bank or with a loan.
• Some utilities (though none in Nevada) offer what’s known as on-bill financing. The power company pays for the project to be done and you pay them back over time. This is essentially an LAAS — it’s just packaged a little differently.
Again, LAAS is a contract for a service agreement for a given timeframe. If you were to go into a contact with Have Lights, for example, we would come out to your property to service your lighting every single month for the duration of your contract.
But it’s to our benefit — and to yours — to upgrade your lighting to LED in month one. So we come in and retrofit your lighting to LED in month one, and we maintain that lighting over the course of the next term, say the next 60 months. You get the benefit of the energy savings automatically, the brighter lighting, plus all the benefits of LEDs.
The Benefits of LAAS
Right now, you currently pay your power bill and maintenance in the lighting on your property. When you have a LAAS, you have a contract for that portion of your lighting and that’s a monthly payment. Your power bill is reduced and you have an opportunity to capitalize on savings, which can be used for the LAAS over the next sixty months. In most cases, the payment and the power bill cost you less than what you were spending on the power bill and maintenance costs before, leaving you with in-pocket cash.
The benefit of LAAS is zero out of pocket cash. For property owners, for landlords, this is a huge benefit. Plus, the LAAS statement is a true expense, a profit-and-loss statement expense. Rather than putting it on your balance sheet, now you have that liability showing so you don’t have as much credit. You also get tax liability incentives because you’re reducing your income. For property owners or landlords, LAAS can also be billed through CAM.
We’re happy to offer more explanation if you need it, but the best thing to do is to talk to us and let us help you figure out if LAAS is a benefit to you. The lowest estimated value is $3000 but LAAS contracts can go up to $1 million. It’s a great way to make sure your money goes further and your lights are as bright as they can possibly be, and we’re here to help.