A Race to the Bottom?

With a thriving economy, these should be great times for the lighting industry. From large conglomerates to specialty niche players, there ought to be much rejoicing. However, the onslaught of offshore, low cost competition has forever changed industry dynamics. There is simply too much supply to satisfy current demand. As of this writing, the year-over-year stock price of every major lighting conglomerate is down.

Whether a specialty lighting manufacturer or a major conglomerate, the impact from losing a client to LED lamp replacements is devastating. The LED lamp life makes this a 10-year loss. For those whose business models depend upon the quickest ROI, such as Energy Saving Companies, LED lamp replacements have been a boon. However, customers are underserved by using such limited technology when a plethora of innovation exists. For all these reasons, articles describing the lighting industry as a Race to the Bottom are ubiquitous.

There is no question the industry faces serious challenges. We have seen credible companies close divisions, significantly downsize, or outright fail. However, this trajectory does not have to be permanent. In fact, for those willing to think differently it can actually be reversed.

By chance, I met a green energy investor a year ago. That meeting changed my focus. I explained our bleak industry dynamics, and we collaborated to design a solution to change them.

What began as an initiative to remove initial cost from lighting upgrades has evolved to upgrading any electrical equipment for renovations or new construction. Our business has grown from 1 green energy investor to 5, and we are backed by over $1 trillion capital. We offer 7 specialty financing programs, and work with 9 vetted and approved technology partners.

We fund best-in-class technology to maximize energy and maintenance savings. Our clients repay us from their savings- not their capital improvement budgets or profits. It is critical to our business model to use proven and innovative technology that delivers superior energy savings and costs less to maintain. Clients make no down payments and pay less than their current utility and maintenance costs, becoming cash flow positive the moment new equipment is installed. At the end of our contracts, clients keep 100% of their savings. For new construction, we simply model the specified material cost of ownership against upgraded equipment. The ownership cost difference, maintenance and energy savings, makes financing from savings a no-brainer.

The lighting industry truly is a race to the bottom for those who choose to do the same things and expect a different result. I believe we have the answer to reversing current trends and rewarding quality designs that better serve our customers. For those who agree, the industry will soon be a Race to the Top!