To build resilience against future pandemics and the impact of climate change, we must re-imagine our relationship with the natural world. We need to move away from the prevalent linear economy and wasteful consumption towards a more sustainable circular economy.

A circular economy is an industrial system that is restorative or regenerative by intention and design. It replaces the end-of-life concept with restoration, shifts towards renewable energy, eliminates toxic chemicals, and aims for waste elimination through superior design of materials, products, systems, and business models. It is about reusing rather than disposing, and using rather than owning.

Such an approach can succeed if it not only protects the environment, but also improves margins for your business while doing so. In fact, some retailers are already using it to reduce both waste and costs. IKEA, for example, plans to become a circular business by 2030. To help it achieve this goal, the global retail giant has has invested in returns management startup Optoro, whose technology helps IKEA to manage and resell returns while reducing waste.

Lighting as a Service

However, a circular approach can also facilitate a significant reduction in your lighting’s electricity costs – well worth doing, as these can account for over a quarter of a retail site’s total electricity bill. As a retailer, you can benefit from this by using an LED-based Lighting as a Service (LaaS) contract rather than buying in lighting hardware and managing design, installation, operation, and maintenance directly. In turn, and lighting suppliers can profitably offer this service if they adopt circular economy strategies.

LaaS’s obvious attractions include zero capital investment, zero risk, and no time, resources or expertise needed for design, installation, and maintenance. Additionally, the lighting vendor is contractually obliged to meet agreed KPIs including energy performance, light levels, and uptime. There are, however, further reasons why LaaS can make LED lighting installations more efficient. 

It is by now well-understood that LEDs offer longevity – with lifetimes of 15 years or more now possible – as well as ever-improving electrical efficiency.  However, these two factors conflict with one another, for two reasons. 

The first relates to an LED effect known as Haitz’s Law. This predicts that every decade, the cost per lumen (unit of useful light emitted) falls by a factor of 10, and the amount of light generated per LED package increases by a factor of 20, for a given wavelength (colour) of light.

The other point is that LEDs gradually lose their brightness and performance over time, at a rate governed by operating conditions and environmental factors

These issues mean that if you simply purchase LEDs and install them into your retail space, their efficiency will fall away from the maximum possibly available well before the luminaires complete their operational life. Yet early replacement would be costly, as LEDs’ longevity means that luminaires typically come as sealed units without replaceable LED components.

Benefits of a circular economy

An attractive alternative is to choose LaaS for your lighting solution. The contract could provide for luminaire upgrades frequent enough to keep you at the crest of the efficiency wave. However, it must be commercially attractive to both you and the lighting supplier – and here is where the circular economy can play a role in reducing waste and cost.

Circular strategies available to lighting vendors include designing luminaires using materials that can be recycled and returned to the economy. They also include products amenable to servicing and refurbishment where possible, or parts harvesting when they cannot be repaired.

Servicing and refurbishment strategies can be facilitated by using modular designs for the luminaires. This means that instead of unserviceable sealed units, LED luminaires comprise an assembly of LED ‘bulbs’, casings, power supplies, cabling, and control gear, plus sensors and network transceivers to bring IoT connectivity. All these components are implemented as modules that can be replaced to refurbish or upgrade the luminaire, which can then be re-used or sold at a profit.

Enabling refurbishment like this not only saves money, but also protects the environment as fewer materials go to landfill.

While modularity exists, ‘sealed for life’ products remain dominant. Factors that could move the pendulum include changing user attitudes, government legislation, and standardisation that allows easy replaceability across brands. This would create a world in which, for example, one manufacturer’s LED module could snap into another vendor’s luminaire.

LaaS can also be IoT-enabled, allowing your lighting supplier to monitor and provide real-time reports on energy consumption patterns. These will help you to reach sustainability goals, comply with energy regulations, and further reduce costs. By making smarter use of your lighting, you can save up to 25 per cent on energy. 

Whichever LaaS partner you choose, it is important that their approach is agile, flexible, and sustainable. Their lighting and monitoring solution should be delivered from a mounting and power delivery infrastructure that can easily accommodate upgrades, and rapidly be adapted to changing lighting requirements. Like the LED modules, this infrastructure can comprise modular components that can be assembled, dismantled, and then redeployed to new locations without creating waste that needs disposal. 

To learn more about how an LaaS scheme could improve profitability in your retail space, please contact our team.

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