Rethinking the light bulb
Trio brings new model for lighting replacement to Iowa
Friday, August 16, 2013 7:00 AM
ThinkLite LLC co-founders Dinesh Wadhwani and Enrico Palmerino were business students at Babson College in Wellesley, Mass., when they got the idea for their company from an ad for an energy-efficient light bulb. Founded in 2009, ThinkLite manufactures custom energy-saving LED lighting systems. The company licenses its technologies from private laboratories in Germany, uses components from South Korea, designs them in Boston and assembles them in China. ThinkLite works closely with Samsung Electronics Co. Ltd., which manufactures all the silicon components for the bulbs. ThinkLite’s major clients include AT&T Inc., Hyatt Hotels Corp., the city of Boston and Eastman Kodak Co.
By the Numbers: Pleasant Hill's LED Project
Total expected savings per year: $17,611
Total investment: $50,932
Average bulb life: 100,000 hours
Payback period: 2.89 years
Annual reduction in air pollution: 180,485 lbs of CO2
Wherever people work, shop or do business, you’ll probably see a familiar expanse of fluorescent fixtures, the mainstay of commercial lighting for decades.
Now, Iowa businesses could find a compelling way to slash their utility bills through a new approach to replacing fluorescent lighting with light-emitting diode (LED) lighting pioneered by Boston-based ThinkLite LLC.
Three entrepreneurs representing ThinkLite in Iowa have grabbed the attention of major private and public enterprises across the state, among them Iowa State University. One of the company’s first clients, the city of Pleasant Hill, expects to save more than $237,000 in energy costs from a retrofit of one of its municipal buildings. Among its initial private-sector clients are a major convenience store chain, a large apartment complex and a small rural bank.
The partners, Eric Branstad, Kirk Enwright and Wally Pelds, in November launched Goldfinch LLC. Their East Village-based company has exclusive rights to sell ThinkLite’s products in Iowa.
“Our goal is to help businesses – large and small – enjoy the latest technology, immediately reduce their utility costs and make a very green statement to their customers,” said Enwright, who co-founded Goldfinch with Pelds.
“ThinkLite has been defined as a mass-producing company of customized lighting,” said Pelds, a civil engineer who was introduced to ThinkLite through a business connection in Chicago. “Their motto is that they can build any bulb to fit any fixture and make it work, versus picking something from a catalog.”
The company’s speed to market with custom products for customers is probably its most unique feature, said Branstad, the governor’s son. For one recent client, Goldfinch requested a specialized type of two-sided bulb; ThinkLite’s engineers produced a design within three weeks. “It might take other lighting companies two or three years to go through their (new product design) process,” he said. “We are a company where those kinds of things can be done within a matter of weeks.”
Though replacing conventional lighting with LED fixtures can significantly slash energy usage, retrofitting to the new technology was cost prohibitive until recently.
ThinkLite’s entry into Iowa comes as global demand for LED bulbs is projected to explode. According to a market forecast by industry research firm NPD DisplaySearch, the LED lighting market will jump from 5 percent of the global lighting market currently to 26 percent by 2016. Significant expansion in manufacturing capabilities, falling prices, environmental concerns and government incentive programs each play a role in the increased demand.
Short payback period
ThinkLite immediately resonated with the three Central Iowa businessmen, who over the years have collaborated on other green energy ventures.
“Everything (ThinkLite) told us kind of tripped my trigger,” Pelds said. “Everything made sense in terms of energy efficiency, the return on investment and the paybacks. You couldn’t manipulate the numbers to make them look better, because a kilowatt-hour is a kilowatt-hour is a kilowatt-hour. That really spoke my language as an engineer.”
Because the high-efficiency bulbs don’t require ballasts or installation of new fixtures, that additional saving on equipment enables companies to recoup their investment in the replacement bulbs within a couple of years in most cases. MidAmerican Energy Co. also provides a rebate of up to $25 for each conventional fluorescent bulb replaced. Those rebates, when combined with the reduced cost of replacing the higher-efficiency bulbs less often, make the projects even more cost-effective.
Don Sandor, city manager for Pleasant Hill, said the MidAmerican rebates were the deciding factor in moving ahead with its project to retrofit its South Complex, which houses the suburb’s library, fire department and police station.
“We’re looking at a payback (period) on the cost of installation of these lights of less than three years,” Sandor said, “which we think is a significant turnaround on the cost. The City Council wants us to monitor the savings over a three-year period, and if it’s as high a savings as projected, they’re interested in extending this into other city facilities.”
Installing the bulbs throughout other municipal facilities could save Pleasant Hill between 25 and 30 percent on its current utility costs, Sandor said.
Rebates make deals sweeter
Since 2000, MidAmerican has been offering rebates for commercial and residential customers who switch to certain types of LED lighting, but the program has only recently become popular, said David McCammant, the utility’s energy efficiency product manager. In 2011, MidAmerican began offering rebates on LED replacement lamps for the popular T8 and T12 fluorescent bulbs found in most business and commercial settings. MidAmerican offers a rebate of $25 per T12 bulb replaced and $15 for each T8 bulb replaced.
Though LED replacement bulbs don’t use significantly lower wattage than fluorescent bulbs, their lower maintenance cost and longer product lives mean the savings are generated for a longer period of years, “and that’s good for the utility and the customer,” McCammant said. “And for certain applications, the quality of light can be better.”
Last year, MidAmerican paid rebates for approximately 20,000 bulbs that were replaced with LED products, more than three times the 6,100 rebates paid out in 2011.
Most companies apply for the rebates through professional lighting contractors, who are familiar with the program’s requirements, McCammant said. The requirements include the LED product being certified as Energy Star compliant and independently tested as meeting minimum quality standards.
For certain applications, “if energy savings is the primary driver, you may be just as well off looking at fluorescents as LEDs,” he said, because for energy savings, fluorescents may be sufficient.
“Even two years ago, the LEDs were so much higher in price, you may not have been justified in going to an LED,” McCammant said. “Now, it may be. The best thing is to get advice from a lighting contractor.”
Iowa State University has been evaluating LED replacement lighting options for its Ames campus and has been testing several companies’ products within the past year.
Lighting accounts for about 30 percent of ISU’s $10 million annual electricity expenditure; new LED lighting technologies could reduce its lighting bills by 50 to 80 percent, said Bob Currie, the university’s director of facilities management.
Early LED technologies did not perform very well, Currie said.
“Coming from overseas, they weren’t constructed to any standards, so there was variation in colors, construction. We weren’t having good experiences early on,” he said. “But things have changed now. Companies like ThinkLite have put some thoughtfulness into what they’re promoting. So we’re testing their product, along with many others.”
Though ISU hasn’t yet completed a full year of testing of ThinkLite’s product, “we’re finding them to be a very good product,” Currie said. “People walking into a room can’t tell the difference between a standard T8 or T12 and their product.”
The quality of lighting was an initial concern for Pleasant Hill officials, particularly because the first project was for the library, Sandor said.
“But once samples were brought in, that alleviated that concern,” he said. Pleasant Hill’s retrofit, which is currently underway, should be completed in less than two weeks. The city’s contract with ThinkLite includes the cost of a contractor changing out the bulbs.
“We’re optimistic that it will pan out as well as projected,” Sandor said. “If it does, there will be a lot of companies that will be excited about this.”