Outdoor Lighting Decision Tree Tool: Successful Approaches of Cities, States, and Regional Groups
Municipalities, states, and other public and federal agencies are continuously looking for new opportunities to decrease spending on utility bills, improve safety and services, and protect the environment. High-performance outdoor lighting technologies are proving to be a cost-effective energy savings measure, often offering 50 percent or more savings relative to previously installed systems while lasting longer and offering tremendous maintenance and operational benefits. The cost of these technologies can be further reduced for deployment in local communities through collaboration, including volume or bulk purchasing, and customized utility incentives and tariffs.
The Outdoor Lighting Decision Tree Tool provides an interactive and visual representation of possible approaches and decisions that will typically be encountered in upgrading/replacing a public outdoor lighting system. The tool features successful cases and models deployed by other cities and states, to help your organization find potential solutions to overcoming common barriers in the market today.
The Outdoor Lighting Decision Tree Tool provides helpful reference materials on:
- Assessing the economic opportunity and choosing a financing model
- Selecting the highest impact technology and estimating its savings potential
- The process and strategies for buying back your street lights
- Collaborating with key stakeholders, utilities, and other cities
Do you own your lights?
Ownership of the street lighting system (lights and poles) can greatly facilitate the ability to upgrade to advanced lighting technology since the main decisions required are internal. Municipal ownership of street lights ranges from 100% for some locations, to partial ownership of the system, to none at all. Smaller municipalities in general fall into the latter category, whereas larger cities typically split ownership between themselves and one or more utilities serving their area. An increasing number of municipalities are coming to the conclusion that owning their street lights offers benefits not available to them otherwise, the ready ability to upgrade being among them, but ownership also brings various liabilities, such as proper and timely maintenance of the system. Calls that previously went to the utility hotline regarding outages, etc., now must be handled by the city. The economics of system ownership must be evaluated on a case by case basis. Depending on the circumstances, lighting upgrades may be equally or even more feasible without owning the system.
Does your utility offer an LED-based tariff for lights they own?
The tariff for a given luminaire owned by the utility is generally composed of three elements: the cost of energy to operate the unit, the cost of its periodic maintenance, and a monthly fee to cover its upfront capital cost. The new high-performance products have changed the landscape in a number of ways and many utilities have yet to modify the energy portion of their rates to capture the benefits of these technologies.
Energy Use Costs
Street lights owned by the utility are often non-metered. Rather, the corresponding monthly energy charges are based on a calculation involving the unit’s power draw (lamp plus ballast), the annual hours of use divided into months and a per kWh charge for electricity. Rather than measuring exact power draw of each light, units are typically binned into use categories so that all fixtures of a nominal size (e.g., '100 W') are billed at the same rate. The new high-performance products have changed the landscape, however, in that there is a much greater range of wattages that might apply in any given application. Many utilities have yet to modify the energy portion of their rate tables to accommodate the new reality, though others have found ways to move forward and are offering tariffs based on the lower levels power usage (sometimes binning them in as little as 5 W increments).
Maintenance costs are calculated using the projected annual cost of maintaining the overall system and allocated on a per-unit basis. Utilities recover any associated costs by charging a monthly maintenance fee per light. Additional factors may be rolled into the charge for a particular unit, such as the expected lifetime of the specific lamp in use (e.g., an extended-life HPS lamp with a 40,000 hour rated life can be expected to require less annual maintenance than a standard MH lamp with 16,000 hour expected life). Despite the longer lifetimes expected for new high-performance technologies, there remains a lack of actual field experience and related data to irrefutably confirm their lower associated costs. Some utilities continue to charge the same amount as they did for previous technologies, or in a few cases even raising the monthly fee due to higher first costs of the new products (under the premise that they will be most costly to replace, if that becomes necessary). This situation reduces and in some cases eliminates entirely the expected savings a municipality can expect to receive from the investment in the high-performance products. Energy savings commonly exceed 50% in U.S. installations undertaken to date.
Finally, despite field evidence to date demonstrating that LED lighting most often results in significant savings in both maintenance and energy use, the largest portion of the utility-owned tariff is the capital cost recovery factor, so the resulting combined LED rate may actually be higher than conventional options due to a higher first cost that sufficiently offsets the energy and maintenance savings. Fortunately, a rapid decrease in capital costs for LED lighting have nearly eliminated their marginal cost in more common applications.
Such results can vary on a site by site basis, sometimes even within the same service territory. Thus the assumptions used by the utility and regulator on each of the three components of the rate are essential to understand, because if the maintenance and energy savings are being undervalued or if prices do not reflect the dropping costs of newer LED fixtures, the proposed LED rate may not properly reflect the true opportunity associated with a potential exchange. In situations where a new rate is filed, some municipalities have had success intervening to better understand—and in some cases negotiate—the assumptions used to develop the corresponding LED rate.
Example of LED Rate Funding
This excerpted pair of slides from a presentation made by the California Street Lighting Association to Outdoor Lighting Accelerator partners in May 2015, shows first a comparison of component rates charged for utility-owned (LS-1) and customer-owned (LS-2) HPS street lights in Pacific Gas & Electric (PG&E), and Southern California Edison (SCE) service territories. The second excerpted slide shows the new LS-1 rates offered by PG&E for LED replacement products (i.e., that are owned by the utility). Despite the higher LED cost recovery charge listed, the overall monthly rate remains lower for the LED due to a significant reduction in the corresponding energy use component.
Tariffs for utility-owned, non-metered lights
A wide variety of circumstances can be found around the country with regard to utility rate treatment of high-performance street lighting.
- Northeast Energy Efficiency Partnership Comparison of 13 NE Utility Rate Tariffs — Excerpt from NEEP Report that lists the comparative tariffs offered for LED and HPS street lights by 13 utilities in the Northeast and Mid-Atlantic states. A number of these are charging higher rates for LEDs.
- Duke Energy Progress — Provides street lighting rates for exterior lighting within their service territory.
- Knoxville Utility Board rates — Note there are no LED rates listed at all as of June, 2015.
- Wisconsin Public Service Corporation — 'LED Lighting — The decision to replace existing sodium vapor or metal halide lamps with LED lighting equipment will be at the sole discretion of the Company and will take into consideration good utility operating practice and the desires of the customer.'
- Westar Energy Corp. & Kansas Gas and Electric Co. rates — No LED mentioned; note 'Nonstandard Public Street Lighting' section stating the company will only pay amounts equivalent to a standard product, with the customer expected to provide cost in aid of construction to cover any incremental costs.
Example IOU Programs Offering Cost-Effective Transitions
A number of investor-owned utilities around the country have figured out their approaches to moving forward with large-scale conversion programs.
- LED Street Light Turnkey Replacement Service from PG&E — Utility web page describing program that helps customers justify street light replacement by providing projected savings calculations upfront, and a complete turnkey solution thereafter, to offer cost savings when compared with the expense of using city personnel or city-acquired subcontracted labor.
- LED Street Lighting Now Available from Georgia Power — Utility newsletter describing availability of new (2012) LED outdoor lighting program with contacts and additional information.
- Duke Energy Progress to Install 100K LED Street Lights Across North Carolina — Utility news release (Sept 2014) announcing this new statewide effort.
- Xcel Energy Offering Community-Wide LED Street Lighting Upgrades — Utility website announcing new conversion program to begin in 2015.
Costs of Maintenance
Future costs of maintaining new, higher performing technologies retain a degree of uncertainty given their expected long lives and comparatively early present stage of those lifetimes. Projections suggest that maintenance costs will be low but only limited data exists as of yet to support that conclusion.
- MSSLC Webinar, 'Maintenance Practices for LED Streetlights' — A presentation addressing maintenance and reliability issues with LED street lighting. This April 2014 webinar features presentations from the cities of Boston, Seattle, and Las Vegas.
Purchasing your lights
The economic case for an upgrade may differ significantly depending on whether or not the municipality owns its street lights. Owning the lights enables the municipality to pursue a competitive solicitation for the products installed as well as for a third-party maintenance contractor (if the municipality does not have its own maintenance staff), ensuring the best price/value balance is obtained for both. In contrast, a municipality will usually have to simply accept the new products offered by the utility from among limited product and price options, and also pay associated overheads and profit margins.
A variety of factors contribute to the decision of whether a city should pursue purchase of its lights if it does not own them already, assuming purchasing the system is a viable option. Considerations include whether the municipality has the staff to take on the additional responsibility of operating the system, and whether it can come up with the funding to purchase the lights in addition to the cost of upgrading them afterwards. The costs of upgrading may involve additional system measures that entail more than simple luminaire replacement, such as transformer or pole repair or replacement, or required updating to current standards.
In some cases, having the utility or other third party continue to own the lights will be the best option if they can be convinced to pursue the transition to LED in cost-effective partnership with the municipality.
In other cases, where a municipality (or more often group of municipalities) have decided that purchasing their system(s) is the preferred course of action but the owner is not receptive to the idea, a variety of approaches are available, e.g., in some states legislation has been passed that requires utilities to allow cities to purchase their outdoor lighting (see Enabling Legislation).
Benefits and liabilities
A site interested in purchasing its lights is facing a significant effort, both from a financial and time perspective, in pursuing that option, and accepts both benefits and responsibilities associated with ownership.
- MAPC 'Buy Back Streetlights from Utility' — Document that outlines the overall process of purchasing street lights from the utility.
- MARC Smartlights Ownership Brochure — Document that provides reasons for considering ownership of one’s street lights, and outlines the purchase process.
- Portland, OR, street lighting report — Describes the experiences of the City of Portland, OR, in converting its street lighting from high-pressure sodium to LED, including purchase of a significant portion of the system from the utility. The overall process was more complicated and lengthy than the city originally envisioned; learning how the city addressed the challenges it encountered may be helpful to other cities that are implementing or considering their own lighting transitions.
Talk to your utility
The best result is likely to be obtained through an amicable collaboration between the municipal agency and the utility, if possible. The first step should always be a formal inquiry into the utility's future plans regarding high-performance street lighting, if those plans are not already clearly articulated or do not to support a transition for any reason. If possible, working together to find win-win solutions to existing hurdles promises the cheapest and most expedient path to the benefits offered by a transition.
Contact your utility account manager to discuss developing a street light retrofit plan. Your utility may be able to offer advice and assistance on technology selection, and financing options and infrastructure requirements. Implementing a new or revised outdoor lighting tariff for new technologies, however, may be subject to the public utilities commission (PUC) ratemaking process with commensurate time delays.
Examples of successful utility interaction
- Asheville, NC LED street lighting program description — This program attributes a major part of its successful results to the working relationship formed with Progress Energy: 'Through its involvement with the Community Energy Advisory Council City staff had developed a productive working relationship with the utility that enabled it to negotiate the LED rate structure, as well as work out the logistical details for implementation.'
- Utility-Owned LED Street Lighting — Presentation describing a pathway to successfully pursuing a lighting transition on utility-owned equipment; in this case the services of an Energy Efficiency Organization are utilized to apply rebates where they are most effective.
- Street Light Acquisition Process instructions from Southern Cal Edison — Details SCE's updated policy of readiness to enter into discussions with local governments for the potential sale of LS-1 (SCE-owned) street lights. Note as of April 21, 2015, however, the policy changed and this purchasing program is to cease as of August 15, 2015.
- West Palm Beach Presentation, 'High Performing Street and Area Lighting Upgrades' — This presentation provides project details of the city’s transition to LED street lighting, including costs and expected benefits, and how they worked with their utility.
Conducting a 'wall to wall' inventory of the lighting system is frequently a required first step in preparing to enter negotiations for purchasing or upgrading that system, in order to ensure accuracy and consistency of data among the parties and to be used in cost estimates. It will also be important, where multiple owners are present within a municipality, to clarify boundaries and responsibilities among the various parties.
A widespread perception exists among both municipalities and utilities that neither party usually has a complete and accurate count of the numbers, sizes nor even locations of the entire street lighting system. This can become the case when individual lights or light circuits are added to or removed from existing lines over time without keeping adequate records. Anecdotal reports claim that the difference between the number of lights billed for and the number of lights actually installed can often be ±10-15%, or in extreme cases even higher.
A completed inventory might include, but not be necessarily limited to:
- age and physical condition of both the pole and fixture,
- number of fixtures on pole if more than one,
- fixture type,
- lamp type and wattage,
- system operating voltage,
- date of last servicing (if known), and
- GPS location.
Conducting the inventory yourself
Municipalities with sufficient staff and budget may wish to conduct the inventory of their street lighting systems themselves. Doing so helps ensure that the city’s questions can be answered in sufficient detail, such as identifying needs for immediate maintenance or other required modification of the existing assets. This is of particular importance when a municipality is considering purchase of those assets.
- In preparation for negotiations with their utility, the city of Flint, MI conducted a wall to wall street lighting inventory. This presentation describes the process and some of the analysis results from conducting the inventory. This Adobe Acrobat file provides a map of the city that can be zoomed in to individual street lights, and provides the age, wattage and source type.
- Similarly, the City of Portland, OR developed a GIS-based street light inventory system using off the shelf technology that they considered very successful.
This white paper describes the process and results from developing and using the inventory "app."
This presentation provides some further detail and includes screen shots and other information from the "app."
This thorough Grade Audit for Huntington Beach, CA, conducted by Siemens Industry, Inc., provides an excellent example of how an inventory enables highly detailed estimation of energy, cost, and carbon savings possible from an intended conversion, while improving estimates of the investment required due to, e.g., the necessary acquisition of portions of the system currently owned by the utility and related condition of the relevant poles, wires, and other equipment. Note that estimates for the latter are unique to this particular location, given what was identified during the inventory, and pertain to Siemens managing the entire set of assets for the city throughout the proposed conversion process.
Hiring a 3rd Party Contractor
In some cases a municipality may have budget but not sufficient staff availability for the extensive effort required in conducting a wall to wall inventory. Hiring a third-party contractor may be the best approach.
- City of Rancho Palos Verdes Award for Professional Services to Conduct a Street Light Audit, in preparation for purchase — City Memorandum describing award of a professional services contract for a citywide street lighting audit, with detailed task descriptions. File also contains the earlier Memo directing staff to undertake a feasibility analysis of acquiring Southern California Edison owned street lights, and to carry out a transition to LED. Also includes documentation of many specific system details, as well as the proposal from the winning bidder.
- The City of Yonkers LED Streetlight Installation — This comprehensive description of the street light replacement program notes that the city relied on the utility’s inventory database for the initial baseline estimate of energy use and carbon emissions from the system, but that the ESCO hired will conduct and provide a detailed inventory as part of its guaranteed savings work scope.
Given the energy savings associated with more efficient forms of outdoor lighting, some state legislatures have passed enabling legislation to facilitate the ability of municipalities to pursue LED retrofits. Such state level policies mandate that a utility offer an LED option to municipalities in their territories, and others to enable municipalities to purchase their lights from the utility if desired. The utility is generally also required to offer a cost-effective rate tariff for non-metered lights, where applicable. A number of such efforts have met with success; a number of others are still underway.
Approaches for getting utility-owned lights replaced
- The State of Massachusetts passed legislation in 1997 that required municipalities to have the right to purchase and own their street lights. This legislation included a buy-back calculation (price of new fixture minus depreciation). As a result more than 75 municipalities purchased their street lights and more than half of those have converted to LEDs, resulting in nearly 28,000 MWh of savings over a period of three years.
- State of North Carolina: North Carolina Utility Commission — 2014 mandate, supported by the North Carolina Municipal League, that Duke Energy Carolinas provide an LED rate for replacement of HPS and MH lighting. The mandate further stipulates that the energy consumption and cost data used in developing the LED offering is to be made publicly available. A companion proposal to require that the utility offer a customer ownership option was denied.
- The State of Rhode Island enacted the Municipal Streetlights Investment Act in 2013 establishing formal procedures for municipalities to purchase their utility-owned outdoor lighting systems and directing electric distribution companies to file a tariff incorporating rates for customer-owned dimmable lighting. State of Rhode Island General Assembly News: 'RI first in nation with utility tariff so municipalities can own streetlights' — A state media brief announcing that Rhode Island will be the first in the nation with a utility tariff that offers street lighting controls as an option to all municipal customers.
Have you considered collaboration?
Gaining traction to drive change with your utility, PUC, or state legislature on an individual basis can be a challenge, particularly for smaller municipalities; however, working in collaboration with other municipalities has led to success in some regions. Regional or state-level organizations can work across municipalities to negotiate across a number of issues including utility rates, procurement options and contracts, and PUC engagement, when bundling the needs of several municipalities, helping provide assistance across financing, procurement and legal issues.
Municipalities are increasingly using such collaboration to get their voices heard, and having some measure of success where previous progress may have been slow or even non-existent. The collaborative process can also be an extensive effort requiring substantial perseverance. The examples provided in the inputs to this decision box illustrate the types of efforts that may be necessary.
Collaboration with peers
A variety of examples of collaborations among municipalities exist that have successfully effected change in their street lighting situation. Many mid-size and small cities find that participating in municipal or regional networks offers several benefits for street light project implementation. Through increased economies of scale localities have received better purchasing options, competitive electric rates and improved operations and maintenance services. In addition, members are aided by access to technical expertise not currently available in-house.
- Huntington Beach Council Minutes Excerpt outlining plan to reconfigure street lighting services in the city
- Coalition for Affordable Streetlights: Example 1 Street Light Rate Realignment; Example 2, Municipalities ask utility to reduce rates.
- California Street Light Association The website for this association that represents public owners of street lighting systems.
- Royal Oak, Michigan Resolution to join the Michigan Street Lighting Coalition Describing the events and background information leading up to this city’s joining a municipal collaboration to file a rate case intervention.
- Washington County Regional Planning Council Rhode Island: Describes collaborative effort among Rhode Island communities, including the Partnership for Rhode Island Streetlights Management (PRISM).
- Southeast Michigan Regional Energy Office is a regional coalition of more than twenty non-profits and local governments in the Detroit metro area organized to develop tools and resources enabling greater energy efficiency in the region.
- Delaware Valley Regional Planning Council provides resources and funding opportunities available to local governments in the region who are seeking to retrofit traffic signals, streetlights, and other outdoor area lighting with more energy efficient technology
- Iowa Association of Municipal Utilities works with Iowa's 136 municipal electric utilities on a wide range of issues including LED street lighting to capture the energy and maintenance savings along with the improved lighting quality.
- Connecticut Conference of Municipalities issued a Request for Qualifications covering the actual LED retrofit, and management and maintenance services for member municipalities.
- Cape Light Compact is a municipal aggregator and energy efficiency program administrator serving all the towns on Cape Cod & Martha's Vineyard, Massachusetts; they utilized an energy management services contract approach to convert municipal owned-street lights to LED for its 23 participating communities.
Does your utility offer a favorable customer-owned LED rate?
If the utility does not offer a LED-tariff rate, it may support transitioning the owner’s lighting system to high-performance source technologies by offering a customer-owned LED rate.
Street lights owned by the customer are often non-metered by the utility. In such cases the utility usually charges a tariff based only on the energy use, and sometimes ancillary charges such as a connection fee (if the lights are metered the utility simply bills the charges at the measured usage). The corresponding monthly energy charges for non-metered lights are based on a calculation involving the unit’s power draw (lamp plus ballast), the annual hours of use divided into months and a per kWh charge for electricity. Rather than measuring exact power draw of each light, units are typically binned into use categories so that all fixtures of a nominal size (e.g., “100 W”) are billed at the same rate.
In large part, utilities are transitioning away from maintaining lights that they do not own. Many only continue to offer maintenance for older lights that have been grandfathered in over the last 10 or 20 years since these utilities have changed their policies in this regard. In most cases today, municipalities are expected to handle the maintenance on the lights they own, either themselves or through a third-party (who must still be approved for any work involving the utility’s grid). For this reason, tariffs for customer-owned lights do not often have a maintenance (or cost recovery) component.
Tariffs for customer-owned, non-metered lights
- Entergy Gulf-States Louisiana — Table contains rates specific to LED or LEP (Light-emitting plasma) technologies, Entergy requires the Customer to provide a written inventory of the luminaires for which service is requested. Additional charges in the rate may also apply, as detailed in other links here.
- Mid-American Energy Co. (Iowa), p 226 (rates for customer-owned equipment begin on p 232). Notes that LED lighting has become the company standard for all new or replacement situations; however, if customers request LED before the incumbent's end of life, a $100 stranded assets charge applies.
- PG&E LS-2 Rate Schedule showing the extensive breakdown in wattage bins offered for customer-owned LED (along with traditional) products.
Any given municipality has undergone the Request for Proposals process on numerous occasions in procuring various goods and services. Undertaking a street light conversion is no different than any other good or service other than the particulars pertaining to the specific content. Each municipality is likely to use its own individual RFP boilerplate language, but the following documents provide useful examples of that specific street lighting content.
- RFP used by the Iowa Association of Municipal Utilities representing a bulk purchase arrangement for multiple municipalities located within that state. Amended to include embedded Q&A received following the initial release. Issued April 2014.
- RFP used by Alameda, CA for that City’s individual conversion effort Issued December 2014.
- RFP used by Portland, OR for that City’s individual conversion effort. Issued April 2014.
- RFP used by Kaua’i, HI includes control system. Issued in May 2014.
- RFP used by San Jose, CA includes control system. Issued in July 2009.
Conducting an economic analysis
This refers to having sufficient information on costs and benefits of the transition to convince the lighting owner (or to make the case, e.g., to the public service commission) that the transition investment meets the required cost-effectiveness criteria.
The effort required to conduct an economic analysis varies as a function of a number of factors. The simplest analysis is perhaps available to those agencies that do not own their lights and instead pay a fixed monthly fee to the owner, typically a utility. In such cases the monthly fee often consists of energy, maintenance, and cost recovery components and the municipality is basically considering only the bottom line for the current situation versus the new potential payment following the upgrade. The utility may also want a contribution upfront to pay for stranded assets charges and/or other charges, but the calculation is still fairly straightforward for the municipality and is simply assessing whether the resulting payback on the upfront investment meets its economic criteria.
On another end of the complexity scale is a municipality where ownership of the lighting system is split with one or more serving utilities, with some of the system maintained by each and perhaps additional portions maintained by third party contractors. The system may have older sections with different (e.g., ornamental) fixtures, and perhaps ownership of the poles themselves may be split among parties. Such situations can entail a variety of additional costs, some of them unexpected or even hidden on first review. Older portions of the system may have deteriorated and require more work than simply replacing the fixtures. One or more parties may not be interested in transitioning their portion of the system, or in selling it to the municipality to enable them to do so. Work on the system may be impacted by union or other requirements. The more detailed of economic analysis that can be conducted, the more complete picture an agency will have of whether pursuing a transition is worthwhile.
Various resources are available to provide advice and considerations related to conducting an economic analysis. Some of these include:
Examples of completed Economic Analysis
- LED Streetlight Application for Seattle City Light — Transition program assessment report funded by the city that includes economic analysis.
- Cost-Benefit Analysis of Energy Efficient Technologies Available for Use in Roadway Lighting for Minnesota Department of Commerce — Comprehensive report from 2012 includes a pilot project and economic case study for a municipality in Minnesota.
- LED Street Lights — Communities Partnering for Technology, Knowhow and Cost Savings (IAMU) — Presentation detailing the process undertaken by this agency in evaluating and selecting products for conversion, including economic comparison of alternatives.
- Adaptive LED Street & Area Lighting: Selecting, financing and implementing best-practice solutions — Business-case economic comparison of different controls system options for LED outdoor lighting in California.
Data and statistics on LED pricing
- LED Lighting Facts website and factsheet — Showcases LED products for general illumination from manufacturers who commit to testing products and reporting performance results according to industry standards. For lighting buyers, designers, and energy efficiency programs, the program provides information essential to evaluating SSL products. Products registered with the LED Lighting Facts program are listed in an online, searchable database.
- DesignLights Consortium Qualified Products List website — A searchable database of performance-related information for products that meet certain threshold criteria; passing the criteria requires the submission of documentation.
- DOE SSL webpage, Considerations When Comparing LED and Conventional Lighting — Brief descriptions and links to more information on the various differences between LED and incumbent sources (includes considerations for interior applications too).
- DOE SSL Fact sheet, Establishing LED Equivalency — Provides guidance for comparing products based on LED or other light source technologies (2 pages, October 2011).
- DOE SSL Fact sheet, LED Life and Reliability — A detailed discussion of failure, lifetime, and reliability as they relate to LED-based products. (4 pages, August 2013).
- DOE SSL Report, SSL Pricing and Efficacy Trend Analysis for Utility Program Planning — Report to help utilities and energy efficiency organizations forecast the order in which important SSL applications will become cost-effective and estimate when each 'tipping point' will be reached. Includes performance trend analysis from DOE's LED Lighting Facts® and CALiPER programs plus cost analysis from various sources. (46 pages, October 2013).
- DOE SSL Fact sheet, Understanding LM-79 Reports — Discusses typical content of laboratory reports summarizing LM-79 test results for integrated SSL lamps and luminaires (4 pages, March 2012).
Financial analysis calculator
- The Financial Analysis Calculator was collaboratively developed by the Municipal Solid-State Street Lighting Consortium for conducting economic analysis of lighting upgrades. This webpage contains a link to both the tool and to an instructional webinar on its use. The tool assists with the detailed financial analysis of retrofitting street and parking facility lighting with more-efficient alternatives. Use it to compute annualized energy and energy-cost savings, maintenance savings, greenhouse gas reductions, net present value, and simple payback associated with potential lighting upgrades.
Have you received decision-maker approval?
The process of the owner (municipality or other agency) granting approval to proceed with acquiring funding and assembling bid documents, etc., for pursuing a lighting system upgrade is often iterative. Presentations to the Mayor and City Council, Comptroller, etc., pertaining to various stages of the project, such as additional use of a controls system, acceptance of terms for financing the transition, and selection of products and/or contractors for conducting the work may all be required as part of the approval process.
Undertaking the approval process
A number of resources exist that can help an agency make the case to undergo a lighting transition. These include case studies, product information, and other materials. The following resources contain information of value for assembling a case to undergo the transition.
- Efficiency Vermont Street Lighting Guide — A step-by-step guide on updating street lighting inventory and identifying opportunities to eliminate unnecessary lighting.
- MARC Smart Lights Final Report — Summary results of a lighting transition program across several municipalities in the Kansas City metropolitan area. Includes estimated maintenance, energy and environmental savings, community reaction and the strategy and approach developed by this program that replaced 5700 street lights.
- Massachusetts Metropolitan Area Planning Council (MAPC) 'How To' Document, Retrofit Streetlights with LEDs — A step-by-step guide outlining the planning process for a lighting transition, describing options for implementing projects, and summarizing available resources for cities and towns in Massachusetts.
- Street Lighting in New York State: Opportunities and Challenges — NYSERDA report presenting an analysis of savings of and barriers to upgrading to LED street lighting in New York.
- Regional Street Lighting Report — Link to Northeast Energy Efficiency Partnerships report assessing the current status of LED street light conversion barriers in the Northeast and Mid-Atlantic regions.ink to Northeast Energy Efficiency Partnerships report assessing the current status of LED street light conversion barriers in the Northeast and Mid-Atlantic regions.
A growing body of successful case studies and demonstrations are available to help support the decision to pursue a lighting transition.
Self-directed demonstration projects
- City of Yonkers, NY LED Street Light Replacement Project — City website describing project and links to expected benefits.
- The case for LED Lighting in Osseo, NY — This 2013 presentation reviews an older installation (2009) and details the cost and performance comparisons that led to the investment decision.
- Member Case Studies LED Street Lighting Programs in Algona (IA), Asheville (NC), and Boston (MA) (DOE MSSLC Webinar) — This MSSLC webinar features presentations from three cities that underwent LED lighting transitions and discusses planning, financing, and implementation of LED street lighting programs, and related customer perspectives and lessons learned from their cities' installation process.
- West Palm Beach Presentation, High Performing Street and Area Lighting Upgrades — This presentation provides project details of the city’s transition to LED street lighting, including costs and expected benefits.
- City of Las Vegas Presentation, City of Las Vegas LED Streetlight Upgrades — This presentation describes the process and results of their 85,000 lamp street lighting transition.
Pilot demonstrations done in partnership with DOE
- DOE GATEWAY Demonstrations website — Website for the U.S. Department of Energy GATEWAY Program, containing links to several demonstration project reports.
- DOE GATEWAY Demonstration Brief, Central Park, New York City — Five different LED post-top mounted luminaires were installed and evaluated against the existing metal halide luminaires in New York City’s Central Park.
- DOE GATEWAY Demonstration Brief, Cully Boulevard, Portland OR — Six different types of roadway luminaires were installed in side-by-side groupings and evaluated for initial performance: three LED, one induction, one ceramic metal halide, and one baseline high-pressure sodium.
- DOE GATEWAY Demonstration Brief, Kansas City, MO — Nine different LED street lighting products are compared to each other and the high-pressure sodium luminaires they replaced.
- DOE GATEWAY Demonstration Brief, Philadelphia, PA — A comparison and evaluation of ten different LED roadway luminaires and the incumbent high-pressure sodium luminaires they replaced.
City-wide conversion projects
- Restoring Detroit's Street Lighting System — Provides an objective review of the circumstances surrounding the comprehensive street lighting restoration currently being undertaken by the City of Detroit, the processes undertaken and decisions made, and the results to date.
A variety of options are available for funding the purchase and installation of high-performance lighting systems, in addition to the traditional general obligation bond issuance or debt financing models.
Tax-exempt municipal lease financing
This can be a useful alternative for financing of public equipment that does not create long-term debt on the lessee’s books.
- Frequently Asked Questions about Tax-Exempt Municipal Leasing — A concise file of definitions, requirements, benefits, eligibility, etc.
- The Energy Project (So Cal) Lease Financing Application webpage — Web page that provides a link to an actual municipal lease application form, and other links to Frequently Asked Questions and other resources of this Southern California-based program.
A results-oriented contracting method that ties a contractor's payment to the achievement of specific goals, in this case involving energy and perhaps maintenance savings.
- Huntington Beach RFQ for ESPC for the Street Lighting System — Request for Qualifications for agencies to carry out replacement of Huntington Beach, CA’s street lighting with LED products under an Energy Savings Performance Contract.
- Connecticut enabling legislation for public use of ESPCs for efficient street lighting and other conservation measures. — Provides the content of Public Act 11-80, Section 123, enabling State and Municipal Agency use of Energy-Savings Performance Contracting.
- Pennsylvania Sustainable Energy Fund Brochure — Details a new program available in Pennsylvania that will prequalify Energy Savings Companies and provide financing to public agencies to carry out various efficiency upgrades, including street lighting. Among other attributes, the program features a Guaranteed Savings Agreement.
- San Diego’s street light conversion program included $13 million in bond funding.
- Brookhaven, NY is financing its ongoing LED street light replacement programs through municipal bonds.
- Asheville, NC authorized general obligation bonds of $1.75 million to implement its LED replacement program. The cost savings are managed like an internal Energy Performance Contract that is managed directly by the City, and are expected to generate $4.3 million over and above the amount required to retire the installation debt.
Qualified Energy Conservation Bonds
These bonds enable qualified government issuers to borrow money at attractive rates, subsidized by the U.S. Treasury, to fund energy conservation projects.
- Energy Programs Consortium Document, Qualified Energy Conservation Bonds (QECBs) — A thorough treatment of Qualified Energy Conservation Bonds (QECBs), authorized by Congress in the 2008 Energy Improvement and Extension Act. Published June, 2014.
- DOE WIP webpage: Qualified Energy Conservation Bonds links to multiple other pages — A brief description of QECBs with links to multiple other resource pages.
Leverages the relationship between an electric utility and their customer to provide access to funding for energy efficiency investments that can generate an immediately positive cash flow (where savings are greater than payments).
- Pacific Gas & Electric’s On-Bill Financing is available for their LED Streetlight Program. The current phase of the program applies only to municipally-owned street lights, though a companion effort for utility-owned street lights is reportedly in the works.
- Southern California Edison also offers an On-Bill Financing program that is available to government agencies for LED lighting (all applications).
Funding options and considerations
A growing set of options are becoming available for funding a transition due to the demonstrated robustness of the investment and energy and cost savings achieved in installations to date. Pursuing a transition may not even require additional money up front (see Financing Options). Selection of the particular approach to financing for a given location depends on preferences and financial and other characteristics of the individual site. A robust, documented Economic Analysis will help in making a persuasive case for obtaining third-party financing. In some cases, there may also be the availability of grants or rebates that will help offset the initial investment. These may be offered at different times from the federal or state levels of government, or from the serving utility.
Preparing specification documents
Proper specification of the needs of the application is essential to ensuring the resulting products obtained are a suitable fit. Use of a well-articulated specification is of particular value in cases like the present, where a new technology is available with new capabilities, but also with different characteristics that need to be detailed to ensure the best result. To assist users in getting past any required learning curve, the Department of Energy’s Municipal Solid-State Street Lighting Consortium (MSSLC) has worked with manufacturers to prepare model specification documents in the form of templates, intended to be customized for use in individual sites (see accompanying box). Many examples exist of owners that have used the MSSLC specs, as well as those who have undertaken such effort entirely on their own.
Model purchase specifications
The model specifications listed are intended to be templates for customization by the user per the particulars of their situation. They are designed to be incorporated into the standard boilerplate bid documents normally used by an agency. The user may also find additional instructional materials both inside the specifications themselves and in accompanying presentations describing their use.
- Model Specification for LED Roadway Luminaires and MSSLC Webinar — The Model Specification for LED Roadway Luminaires enables cities, utilities, and other state and local agencies to assemble effective bid documents for LED street lighting products. The webinar provides a walk-through and includes a Q&A session with the attendees at the end.
Examples — The linked documents below include a range of actual uses of the MSSLC Model Specification above.
- Alameda, CA — includes specifications for a number of representative street types within this municipality.
- Brundidge, AL — Specification used to replace approximately 100 street lights along their Main Street.
- Colorado DOT — The luminaire technical specifications portion (Attachment B) of a 2012 RFP for the state transportation agency.
- Columbus, OH — Specification used for a small-scale pilot project.
- Portland, OR — Luminaire Specification used for ornamental post-top luminaires.
- Texas DOT — Includes sections based on MSSLC Luminaire Specification, highly customized for this agency’s individual use.
- Model Specification for Networked Outdoor Lighting Control Systems — The Model Specification for Networked Outdoor Lighting Control Systems helps cities, utilities, and other local agencies accelerate their adoption of systems that can further reduce the energy and maintenance costs of operating their streetlights. The document provides both a suggested set of high-level requirements and a template for translating unique user needs into clear and consistent specification language.
- IES Street and Area Lighting 2014 Presentation, What to Look for Today in Control Systems — Presentation to IES 2014 Street and Area Lighting Conference with objectives to: better understand some key differences in the technology building blocks that comprise market-available outdoor lighting control systems; how those key differences relate to system features, value propositions, and potential barriers to deployment; and, to be able to formulate questions to ask when evaluating a market-available system.
Are you able to conduct your own RFP?
Issuing a Request for Proposals (RFP) engages a standard process undertaken by most municipalities from time to time, but it can be time consuming and expensive. Developing an effective RFP also requires a level of expertise in the subject area which may be lacking with respect to new technologies such as high-performance street lighting. While some locations are ready to take up the challenges associated with pursuing an RFP, others may wish for cheaper, faster alternatives.
Not every site has the ability to pursue a dedicated Request for Proposals (RFP) on their own, for a variety of reasons that might include staffing, budget, or other limitations. There are other alternatives to pursuing an individual RFP, including participation in a collaboration of like-minded public agencies under an assigned representative of the group, or piggybacking on the successful solicitation of another agency. Such efforts can potentially cut the time to project implementation by half or more and allow an agency to realize the benefits of a transition much sooner than going it alone.
Joining with others in similar situations (i.e., sharing the same geographic region, or utility provider, etc.) help to spread the costs of developing and implementing a RFP, while possibly enabling bulk discounts through aggregated purchase orders. The job of organizing a collaboration generally involves a third party, such as a regional energy office or other site representative.
- Regional Street Lighting Procurement Program — Describes the turn-key high performance street light transition program being offered to municipalities in southern Pennsylvania. This comprehensive program is a one-stop shop that is particularly effective for smaller municipalities that might not have the ability to pursue a lighting transition otherwise. RFPs are developed and issued as part of the collaborative group effort.
- The Energy Network prequalified contractor program — Describes project delivery via the program’s association with the National Joint Powers Alliance. In this case municipalities are able to take advantage of a competitive bidding process that has already taken place.
- The Iowa Association of Municipal Utilities LED Street Lighting Program — Describes the program available to Iowa municipalities to collaborate in obtaining LED street lights, including bulk purchase pricing. The website includes a link to a pre-approved products list.
Piggybacking on an existing RFP
Sometimes a larger city may have agreements in place enabling smaller municipalities in the region to purchase street lights through their existing program. In this case the larger city has already conducted the work and has a list of approved products, and those wishing to piggyback can take advantage (including leveraging of the bulk purchase price) of the existing contract for a relatively small fee.
- Excerpt from Portland Bureau of Transportation RFP Clauses 42-43, “Intergovernmental Cooperative Procurement” and “Intergovernmental Cooperative Administrative Fee (CAF).” — Clauses enabling other Oregon municipalities to piggyback on the PBOT procurement and purchase LED street lights thereby, for a flat 1.00% administrative fee.
- City of Carlsbad, CA’s use of San Diego Piggyback Clause to purchase 110 decorative post-top street lights. — This official city document includes the contract and costs, and an exhibit pertaining to the Piggyback Clause from the City of San Diego that enabled the purchase of 110 decorative post-top lights.
A variety of continuing efforts may be required following purchase and delivery of the various system components beyond their subsequent installation. For example, field experiences reported to date suggest that advanced lighting technologies install relatively quickly and have little or no required follow-up from an operational perspective. However, the whiter light of new products compared with the orangish HPS light that has dominated street lighting in the U.S. over the last few decades comprises a visible change, and is accompanied by a common perception that the lights are brighter and casting more light on the street (and into building interiors, when that occurs). A typical source of callbacks to the city, where they have occurred, is from residents requesting shielding or reduction of luminaire output in order to address a perceived problem of overlighting and/or glare.
A related issue that has gained some attention in the media is the issue of blue light content of white light sources, and their associated effects to human health and well-being. While the science behind these issues is not yet settled, much of the potential concern can be proactively mitigated through an effective public outreach program, both before and following installation.
In the case where controls have been installed in conjunction with the lighting upgrade, some level of commissioning the system will likely also be necessary to ensure the controls are operating as intended.
Another area of occasional concern is that of facilities maintenance crews, and the ramifications to their jobs resulting from a system that requires less routine maintenance. This may or may not be relevant to the owner depending on how maintenance is handled, either in-house or through contracted agreement. To date it appears that most effects to employment have been handled through retraining of existing staff (who are then able to provide much higher-value-added service compared to changing lamps), catching up on deferred maintenance elsewhere in the system, and normal staff attrition.
Glare and light trespass
Brightness is generally considered a positive quality up to a point, where it begins to produce a perception of glare. The potential for glare is of increasing concern as products produce more and more lumens from a given source area, and the contrast in luminance from that area increases in comparison with its surroundings. Glare is one of the most commonly cited complaints associated with LED street lights, for example. A related issue is light trespass, where light is being distributed from the luminaire into areas it is not wanted, such as through the windows of neighbors. Special attention to glare and light trespass are warranted during implementation to minimize public dissatisfaction and associated mitigation expenses afterwards.
- LED Streetlights in Brooklyn Are Saving Energy but Exhausting Residents
- Davis Will Spend $350,000 To Replace LED Lights After Neighbor Complaints
Given the dramatic change that occurs following a conversion from older, narrow spectrum lighting products like high pressure sodium to broad spectrum products like LED, most sites find a dedicated public outreach program extremely useful in describing the process and expected benefits, while setting expectations and addressing any expressed concerns at the same time. Most sites having gone through the process seem to recommend seeking public engagement from the earliest point possible. Such engagement can take various forms.
- City of Cambridge, MA LED Streetlight website — Public site describing the city’s conversion to LED street lights, providing status updates and other useful information of interest to its citizens. This system includes a control system that can dim individual lights 'to an appropriate illumination level for its location.'
- Seattle City Light outreach website, LED Streetlights — Provides a description of the city’s LED street light program with links to status updates, residential surveys of the lighting, outage reporting forms, and more.
- Bellevue, WA public website describing status and other information on their ongoing LED conversion program.
- Mid-America Regional Council Final Report, Smart Lights for Smart Cities — This final report from a street light transition program includes a section on community reaction to the new lights, as determined via public survey.
- San Francisco Public Utilities LED Street Light Conversion Project website — description of ongoing program with additional link to a wireless control pilot project.
- DOE SSL Factsheet, Lighting for Health: LEDs in the New Age of Illumination — This 2014 publication of the DOE SSL Program was a response to rising public concern about blue content in LEDs and other related health concerns, and reported the current state of the science.
- DOE SSL Factsheet, Light at Night and Human Health — This 2010 publication of the DOE SSL Program provides information on the then-current state of the science on light at night and its related health effects.
Field experience documenting maintenance requirements for LEDs and other high performance lighting technologies remains limited due to the relative newness of these technologies compared to those they are replacing. The experiences to date are therefore incomplete, but nevertheless show strong signs of meeting expectations for the technology.
- MSSLC Webinar, Maintenance Practices for LED Streetlights
- Final results of MSSLC street light failure questionnaire
Forming a project team
Public works, Engineering, Planning/community development, Administration/finance/procurement, General counsel
- City of Manchester, NH RFQ for contractors to carry out an LED street lighting transition — An official solicitation of written qualifications from qualified firms or individuals for services related to the conversion of existing High Pressure Sodium and Metal Halide to LED Street Lighting Fixtures.
Many cities have questions regarding disposal of existing HPS fixtures following conversion to LED. Recycling of components is a good option for many cities. This presentation made at the 2015 IES Street and Area Lighting Conference by Utility Services of the Americas describes various steps and considerations for implementing a fixture recycling program.