Energy-saving performance contracts and lighting controls: a great way to meet energy-efficiency goals

By Andy Wakefield

Energy efficiency is a priority for federal, state and local governments. Faced with tremendous pressure to reduce operating costs, municipalities often look for proactive ways to decrease energy use in their facilities without asking reluctant taxpayers to foot the bill. Fortunately, lighting controls offer today’s facilities staff a powerful tool to decrease their energy consumption, but what about those limited budgets? That’s where energy saving performance contracts (ESPCs) come in.

ESPCs provide a method to implement energy-efficiency improvements with almost no upfront costs to a municipality by allowing them to divert funds that would be spent on energy bills into investments in their buildings. Through an ESPC, customers work with a qualified Energy Services Company (ESCO) to develop their facility improvement project. Guaranteed energy and cost savings are utilized to pay for the upgrades over the term of the contract, keeping the customer budget neutral. ESPCs have provided a successful way for all types of entities to make the necessary improvements in their facilities without impinging on capital budgets. A lighting control project can be tailored to the needs of the customer, while the ESCO provides a turn-key solution from design, implementation, and operations to maintenance of the newly installed system. Federal, state and local governments as well as schools, hospitals, and private customers have all utilized ESPCs. Great resources to learn more about ESPCs are the Federal Energy Management Program website and the Energy Services Coalition website.

When is the right time for an ESPC?

What factors should you consider when determining whether to enter into an ESPC? You need to evaluate what the facility needs, whether your staff has the capacity to perform the upgrades, and the potential energy savings.

  • How big is the space? Smaller renovation may be best addressed internally.
  • What is your annual energy spend and what are the potential savings? Typically implementing an ESPC will save 20 percent or more across all of your building systems.  
  • Are there recurring maintenance problems due to aging buildings and equipment?
  • Are there productivity concerns, or frequent employee comfort concerns?
  • Is there money available? ESPCs utilize third-party financing, eliminating the need for upfront capital investments.
  • Do you have the on-site energy-management expertise, and what are the current demands on your facilities staff?
  • When have you last upgraded lighting, controls, or HVAC systems?

Lighting upgrades alone can make significant contributions to building energy efficiency, saving up to 60 percent lighting energy, and reducing demand on HVAC systems by an additional 15 percent. They can also help buildings comply with more stringent energy codes, enhance employee and occupant comfort and reduce operating costs.

It is important to consider choosing a company that has a history of providing reliable products with superior service – once a local, state or federal government has entered into an ESPC, the building cannot go under renovation again until the end of the contract.

Lighting control retrofit solutions are available for any size space and any budget.

Project size is a significant factor in determining whether to enter into an ESPC, but lighting and control upgrades can be advantageous in virtually any new building or renovation project – from a single room, to an entire floor, or even an entire building.

For single rooms – occupancy/vacancy sensors replace standard switches. Simple, in-wall occupancy sensor switches or dimmers can be installed in minutes as direct replacements for existing on/off switches. Occupancy sensors ensure that lights are off when a room is vacant, but never leave building occupants in the dark. There are a wide variety of sensors available, and many can be used with new, energy-efficient LED and CFL bulbs.  Check the bulb manufacturer for compatibility or use an online reference site to ensure that you are using bulbs and controls that have been tested for compatibility, and will deliver the performance you expect.

In small areas – simple, wireless retrofit systems can incorporate occupancy/vacancy sensors, daylight sensors, personal dimming/switching controls and even shade controls to save energy and reduce installation costs.

For entire buildings – major renovations often require a deep energy retrofit. Look for scalable solutions that deliver total lighting management, energy monitoring and a full range of pre-and post-startup services to ensure performance.

Successful applications can be achieved using either wired or wireless control, making energy retrofits easier, and more cost-effective, than ever before. For best results, layer lighting control strategies to maximize energy performance and make your municipal buildings enviable examples of sustainable, efficient technology.

Many municipalities have used some form of lighting control or ESPC to help meet their energy objectives.  By combining these two strategies organizations can achieve even greater value for their taxpayers.


Andy Wakefield is Lutron Electronics' Director of Government Solutions. In his current role, he is responsible for Lutron’s government and energy focused sales and marketing teams as well as its Washington, D.C. based operations.


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