Back

Author: Llumarlite
Date: 11/09/2018

Obstacles preventing the whole proposal being installed?

What are the obstacles preventing the whole proposal being installed?

  1. Insufficient budget for this financial year
  2. Perceived struggle to get budget approval for next year – CAPEX issue
  3. Payback calculation outside of justification criteria
  4. Price
  5. Upheaval to site/occupants
  6. Drawn out approval process via project approval, easier order processing route through maintenance order channel
  7. Tenant lease running out

1. Insufficient budget?
First, understand the current cost of your lighting provision and then explore what a new lighting scheme would cost with modern quality LEDs, maybe with controls introduced.  The true cost of lighting will include both initial product/installation cost and running costs i.e. energy and maintenance costs, over the expected lifetime of the lighting.

Once you understand the true cost of your existing lighting and your new lighting you will be in a much stronger position to either find budget internally to proceed with a new lighting scheme or find external finance to help you pay the upfront capital you require.
If you were to look for external finance, then you can typically expect that your much-reduced running costs will pay for the finance repayment schedule. 

Llumarlite can help you calculate your current lighting costs and your new lighting scheme costs, then help you source the finance you need.

2. Perceived struggle to get capital expenditure approval
You may not have all the information required to make a solid argument.  As mentioned above, to make a compelling business case it is vital that you understand the true cost of your current lighting, both the cost of the lighting and installation and the running costs.  Only when armed with true costs for the current and proposed lighting scheme can you get buy-in from procurement or finance teams to provide the capital budget you need.  Those in charge of agreeing and releasing CAPEX need a true picture of the current figures, proposed figures and an accurate payback analysis.  Also, bear in mind that bigger cost savings can be generated with a bigger project.  So, you will create a better payback if you think bigger and consider either an entire roll-out across your building/estate as opposed to a phased roll-out.  This can sometimes make the difference between getting the money you need and not quite making it.

3. Payback calculation outside of justification criteria
We mention this again as it is critical to many parts of a proposed new lighting scheme and the resources to pay for it.  Many businesses we speak to fall-down on a new lighting scheme because of one simple fact.  The payback has not been correctly carried out or by taking a phased roll-out approach the payback is not as attractive. 
Llumarlite can help you to calculate all the facts and figures, including the payback, and ensure they are both accurate and realistic.

4. Price
Price can be seen in two ways.  Cheap may be the aim but cheap often results in poor lighting and unexpected future WEEE, maintenance and replacement costs.  Llumarlite sees many relatively new lighting schemes that were based solely on price and often need a lot of attention due to LED or gear failures, especially with non-EU cheap products; in truth the entire scheme will need to be replaced.

Affordability is important.  We will work with you to find the best solution for your needs and get the best price for quality EU/British products that will achieve your aims and not have a sting in its tail with product failures just 6 months after your new installation.  The bigger you think the bigger your returns and the better price you will realise.

Also, bear in mind that the governments’ Enhanced Capital Allowance (ECA) scheme allows the business to invest in better quality energy-saving plant or machinery. This is applicable to lighting, controls, design & installation but not emergency lighting. The first-year allowances let businesses set 100% of the cost of the assets against taxable profits in a single tax year. This simply implies that you can deduct the whole cost or up to the threshold limit from your profits in the same year of purchase.

5. Upheaval to site and occupants
This is often a worry to businesses.  Llumarlite has worked on many projects over the last two decades where any disruption to the business’ service is simply not an option.  We always work around the client’s operation to ensure a lighting installation does not affect any service.  We often work in the evenings and over weekends or at any time the client needs work to be carried out.

6. Drawn out approval process via project approval - easier order processing route through maintenance order channel
A new lighting scheme may be daunting especially if you have many operations across the UK or a large site in one location.  Often businesses will just try to keep the lights on by maintaining their old lighting e.g. fluorescent. Yes, it may be easier to keep maintaining them as the process to reorder parts and the maintenance function is all set up. However, sticking with the status quo will stop you benefiting from improved lighting, such as: reduction in electricity bill, reduction in carbon, and an improved environment for staff and visitors.

The mission to get a new scheme fully costed and approved may take some time but doing your entire building/estate in one project is much more time and cost effective, and if a better-quality lighting is installed the results are overwhelmingly worth it.
Remember, Llumarlite can help you with a fully costed commercial business case and we will use our expertise to both design and install the best lighting for your needs.

7. Tenant lease running out
If your lease is running out in the next few years you may think that it is just not worth investing in a new lighting scheme.  However, to be able to make that final decision you need to have all the facts in place.

As mentioned above, do you know the true cost of your current lighting?  Do you fully understand what a new LED lighting scheme could offer, e.g. cost savings in energy and maintenance, improved environment for building users (increase productivity, or sales reduced sick building syndrome)

Understanding what you have and what you could have, based on a strong business case, often allows you to justify investing to reap the benefits even if your lease is running out in a few years but until you have examined your situation, you’re just guessing.

Let Llumarlite help you make the right decision based on your needs, the full facts and figures, and your lease term to see if it is worthwhile investing.

Summary
In short, you will save a lot of time and effort taking on a full roll-out rather than a piecemeal approach.  Prices will be more affordable on a larger scheme - your savings targets with energy and maintenance can be achieved sooner, improving the whole business case of investing in the latest LED lighting.  Add controls to the project and returns will improve.

Llumarlite is on hand to guide you through this process – we can help you gather the facts and figures you need to get approval or source external finance.


Share:

Published on: 2018-09-11