Fluorescent tubes are due to be phased out, so building owners and occupiers will need to make a plan of action to ensure their buildings are adequately lit in the near future.
This article examines the various possibilities, and how “lighting as a service” can help to roll out modern, efficient LED lighting in an affordable way across the UK’s built environment, and how our team at Ashfords can assist in putting those arrangements in place.
As many building owners and asset managers will be aware:
Whilst T5 and T8 tubes have benefitted from an exemption under the EEE regulations, that exemption is due to expire on 1 February 2024.
The prohibition in the Eco-design regulations as regards T5 and T8 tubes will take effect in Q3 of 2023.
Neither set of regulations imposes an outright ban on using the tubes, contrary to the inferences of many reports on this topic. Instead, the regulations will prohibit the “placing on the market” (broadly, the marketing and sale) of T5 and T8 tubes.
Therefore, building owners are permitted to continue using T5 and T8 tubes and will be able to replace any expired tubes with new tubes that have been stockpiled.
Many building owners and asset managers will be planning their next steps, when current stockpiles of tubes are exhausted. In the short term, LED backwardly-compatible alternatives provide a solution to ‘plug the gap’. This makes the most of existing electrical infrastructure, even if the lighting solution may be less than optimal in terms of light placement and luminosity.
In these times of high electricity bills, owner-occupiers of buildings may be attracted to the wholesale replacement of current lighting with modern LED lighting. On the other hand, the current high material costs (driven in part by inflationary pressures) may make a capital investment prohibitive. If the capital expenditure needs to be funded by borrowings, affordability of the investment will be further hindered by the prevailing high interests rates.
One solution for building owners and occupiers could be to obtain a ‘funded solution’ for the lighting, by way of a ‘lighting as a service’.
There is no standard form lighting as a service agreement, but generally they share the following characteristics:
Using LED lighting generates revenue saving through the reduction in electricity demand. Where the service fee is less than the modelled saving in electricity costs, the lighting as a service arrangement can generate an operating expenditure reduction overall. In this way the building owner/occupier benefits from a state-of-the-art lighting design, whilst experiencing a reduction in operating costs.
Even where the service fee is equal to the modelled saving in electricity costs, business owners may benefit from:
Our energy efficiency and decarbonisation team has a wealth of experience in advising on lighting as a service agreement. The team has acted for funders and service providers across a number of portfolios - advising on the terms of the service contracts, installation subcontracts and funding arrangements.
Occupiers of leased buildings will need to consider whether the lease requires landlord’s consent for the replacement of lighting. Landlords who are asked for consent may wish to review the arrangements and seek binding assurances that the building will be handed back at the end of the lease with a functioning lighting system.
If you are considering funding or developing a lighting as a service portfolio or project or would like to learn more about the legal considerations of lighting, please contact our team.
