Shrinking payback periods for LED street lights are helping to make the business case for large-scale conversions in many Canadian municipalities.
Mississauga, a city of 740,000 in the Greater Toronto Area, is one of the most prominent examples, with plans to replace approximately 49,000 high pressure sodium street lights by the end of 2014. Looking east, provincial utilities in Nova Scotia and New Brunswick are rolling out even more comprehensive conversion programs to replace the street lights they own in towns and cities throughout those provinces.
The timing has been good for early adopters as they’ve watched product prices fall even in the period between beginning to investigate a switchover to LED lights and actually signing a contract. Lighting industry insiders note prices have generally decreased from $700 to $800 per fixture two years ago to the $500 range now, and they are expected to drop lower.
“It’s somewhat comparable to the decision of when to buy the latest version of smartphone but the economics make sense to start now and start realizing the energy savings,” says Kerry Jennex, acting director of retail operations with Nova Scotia Power, which currently owns approximately 85,000 street lights slated for replacement by the end of 2019.
Demand reduction and cost-saving
The province-wide initiative was set out in a 2011 amendment to Nova Scotia’s Energy-efficient Appliances Act and enacted in a regulation introduced in September 2012. Both Nova Scotia Power and municipalities like Halifax Regional Municipality (HRM) have already conducted pilot programs and been preparing more far-reaching conversions. The Nova Scotia government projects annual savings of approximately $5 million once all the lights have been converted.
Municipalities that own their street lights have an extended deadline, until the end of 2022, to complete the work. The Nova Scotia government has promised low-cost financing to help municipalities cover the upfront costs, and they’ve also been given the option to purchase street lights that Nova Scotia Power currently owns.
For its part of the switchover, Nova Scotia Power has forecast an approximately seven-year payback.
Lights are now being replaced incrementally as they burn out. The active replacement program will begin after June 30, 2013 – the deadline set in the regulation for municipalities to take ownership of street lights.
In neighbouring New Brunswick, NB Power recently signed a contract for replacement of approximately 72,000 street lights. This is the first initiative to be launched under the utility’s Reduce and Shift Demand (RASD) strategy, a partnership with Siemens Canada announced earlier this summer to develop and integrate smart grid technology across the province. The overarching goal is a 635-Megawatt reduction in energy demand by 2035.
The City of Mississauga forecasts a six to 6.5-year payback on its new street lights and associated wireless lighting control system. Budgeters pegged annual operating costs for the City’s high pressure sodium (HPS) streetlights at about $10.8 million by 2015, based on anticipated electricity and maintenance costs, whereas the LED lights are expected to deliver a 55 per cent saving on energy and reduce maintenance costs by 50 per cent to cut annual operating costs to $4.7 million by 2015.
Central controls
LED street lights’ longer lifespan – approximately 50,000 hours compared to 12,500 to 24,000 for high pressure sodium bulbs – accounts for the bulk of maintenance cost savings but the lighting control system will reduce labour costs still further. Each light will have a meter node that measures its exact energy use and transmits the information to a control centre. When a light burns out, maintenance personnel will know its exact location, eliminating the need for the nighttime spotting patrols that have traditionally conducted visual inspections by driving along major roads on a regular 60-day schedule.
For municipalities, the lighting controls might be seen as somewhat analogous to the switch from flat rate water charges to metering since, typically, they pay a flat electricity rate per street light to their local distribution company (LDC). The meter nodes will allow for precise billing of the actual electricity used. (All other types of lighting are billed based on kilowatt-hours of consumption.)
The centralized lighting controls provide the means to tap still more electricity savings from newer bulbs, by dimming them and then adjusting them later when more light is required.
“When the bulbs are new, they are about 30 per cent brighter than when they are getting old,” explains Rajan Balchandani, the City of Mississauga’s manager of energy management.
The conversion plan, which Mississauga city council adopted in December 2011, follows from a pilot project.
Market dynamics
The improving economics for consumers is attributable to rapid technological advances and the number of manufacturers currently jostling for market share. As recently as 18 months ago, LED technology could generate about 80 lumens per watt. Now, output has increased to about 126 lumens per watt. Lights are brighter, often meaning that fewer actual fixtures are required.
Meanwhile, as many large lighting manufacturers move aggressively into the market, they are cutting prices for their own business logic. Proponents calling for tenders are typically getting multiple bids, often far below what they had budgeted.
Barbara Carss is editor-in-chief of Canadian Property Management magazine.
