13 December 2012 – Philips Lighting Solutions has joined a Standard Bank programme that helps companies sell carbon credits they create by using energy efficient lighting. The programme provides a mechanism through which companies can save up to 80% on their lighting costs and simultaneously generate revenue through the sale of carbon credits.

The Standard Bank initiative is called the corporate energy efficient lighting open access carbon project. It is a programme of activities registered with the Clean Development Mechanism (CDM) executive board of the United Nations Framework Convention on Climate Change (UNFCCC) under the Kyoto Protocol.

Philips Lighting Solutions is a subsidiary of Philips SA that provides turnkey solutions which enable organisations to use energy efficiency as a strategic business asset and reduce costs. Philips takes the cost savings further and guarantees energy savings on lighting through making buildings use energy more effectively overall. Commercial building energy consumption can often be cut by 10% or more only through switching to energy efficient lighting and controls.

Megan Louw, Philips Lighting Solutions general manager, says that lighting is one of the easiest ways to tackle the financial pressure of strained business conditions, rising electricity costs and the prospect of future carbon taxes.

“But the immediate concern for most organisations is that the true cost of electricity will have soared by 220% from R250/MWh in 2009 to R808/MWh in 2014, taking into account tariff hikes and proposed carbon taxes. When you consider that lighting typically constitutes 20% of the overall energy cost of a commercial building, being able to reduce that cost by 50% constitutes good management,” Louw says.

The JSE Energy Efficiency Indicator SA, which measures the attitudes of South African executives and property managers to energy management, shows that 79% have taken steps to improve their lighting.“In part, that’s because more than two-thirds of all the lighting installed today was developed before 1970, before LED technology, and is energy inefficient,” Louw says. “More importantly, many organisations are realising that energy efficient lighting has an operational impact, in terms of lowering running costs.”

Changing from incandescent to LED light bulbs can cut some 20% off building management costs. “With Eskom subsidies, this kind of retrofit can cost almost nothing. But there’s no structural change, because it’s easy to later swap an incandescent bulb for a faulty LED one.

“A permanent switch to energy efficiency occurs when an organisation replaces its luminaires, so that incandescent bulbs can’t be used, and changes its entire lighting design to get the best lighting for the least amount of energy. This can save 50% to 80% of the lighting bill.

“The full solution is to add intelligence such as daylight harvesting and motion detection. The system dims or switches off lights when there is enough available light, or switches lights on only when someone enters a room. This affects all the circuits in the buildings but reduces the lighting bill by up to 30%.”

Geoff Sinclair, head of carbon trading at Standard Bank, points out that making these changes presents a real opportunity but does also involve upfront costs for organisations. “Our energy efficient lighting project is designed to offset that cost by creating revenue from carbon credits.

“Including Philips Lighting Solutions in the carbon programme means that even more of the financing headache can be taken away from organisations, with an integrated solution including facilitation of the Eskom integrated demand management subsidies, carbon finance and asset finance. It’s a powerful business case that involves converting environmental custodianship into a financial asset for the business sector,” Sinclair says, adding that the programme is open to all organisations, including lighting suppliers.