When industrial business owners and warehouse managers consider their expenses, one big-ticket item often flies beneath the radar: lighting. “A lot of executives don’t notice their lighting operating expenses and are surprised how much it costs them,” Contemporary Energy Solutions owner Tony Vlastelica says. “It can be significant.”
Contemporary Energy Solutions has completed lighting projects for more than 400 clients since the company started in 2011. It is known for helping clients eliminate waste from their operations and improve their bottom line. Clients save money on energy bills with more efficient lights while optimizing their workspaces with better lighting for worker safety.
“We help end-users identify savings opportunities in their facilities and improve working conditions,” Vlastelica says. “Many are simply not aware of what a great opportunity this might be for them.”
When working with a potential new client, Contemporary Energy Solutions begins with a site assessment. “We take a look at their lighting situation and help them assess the savings potential,” Vlastelica says. “The first step is the viability analysis.” After examination of a customer’s current lighting, usage and power bills, Contemporary Energy Solutions then presents its lighting recommendations. In many cases, detailed inspection is required as “lighting costs can be buried in power bills,” he notes. For some warehouse and manufacturing facilities, lighting must remain on 24 hours per day, and therefore “the costs really add up,” Vlastelica says.
Contemporary Energy Solutions’ recommendations will include ways to reduce annual lighting costs through the use of more efficient lighting, as well as estimate the total costs of purchasing and installing the new lighting.
“We present our findings showing what current lighting operating costs are today and what they could be with more efficient lighting,” Vlastelica says. “We then present what the investment’s costs are and how we can integrate new lighting technology. We provide complete turnkey projects including installation and recycling of the old fixtures.”
Contemporary Energy Solutions leverages its relationships with its contractor partners to provide competitively priced projects. It works with preferred electrical contractors to complete the installation, manage the installation or provide materials for a company to install.
In many cases, an economic analysis demonstrates the client can recoup its installation costs in about 24 months thanks to energy savings. For other clients, payback could be in six to 36 months. “When faced with such a potential savings, most business owners choose to take advantage of this opportunity,” Vlastelica says. “It is a really strong economic return.” Contemporary Energy Solutions’ website even offers an online form to help companies calculate potential savings. They may enter information such as the number of hours lights are used, lamp wattage and other data to determine how much could be saved.
Contemporary Energy Solutions’ clients tend to be distributors, manufacturers and industrial plants. SoPakCo Distribution of Greenville, Tenn., for example, saved more than $100,000 on avoided energy costs, as did Performance Foodservice of Lebanon, Tenn., and Meco Corp. of Greenville, Tenn. Quad/Graphics Inc. of Bolingbrook, Ill., and Hanson Logistics of Lafayette, Ind., both saved more than $50,000 on lighting costs, as did SOPAKCO Packaging of Mullins, S.C. The industrial market has been faring well in the past few years, especially in Tennessee and the Chicago area, where the company is headquartered, Vlastelica says.
For clients that prefer not to devote resources towards purchasing lighting upfront, Contemporary Energy Solutions also offers creative financing options whereby the installation costs are paid back slowly over time with the amount saved on future energy bills. “The upfront initial investment can be a big hurdle,” Vlastelica admits. “They have other investments they need to make, as well, and sometimes don’t have the capital to support a major overhaul. Yet it is costing them money every month not to do anything.”
For example, Vlastelica explains, if a company is paying $100,000 per year on lighting operating expenses, Contemporary Energy Solutions could install lights that cost only $30,000 per year to run. It would then use the $70,000 savings over time to pay back the cost of installing the lights. In many cases even after the finance payments are made, the customer is seeing a net positive cash flow each month from the massive energy savings.
“When we do ‘no upfront’ installs, the clients are paying us back over time. The monthly finance payments are offset by their savings and they receive brand-new lighting that costs them less to operate,” Vlastelica says. “We even guarantee the savings.” However, sales are not difficult for Contemporary Energy Solutions to make. Once prospects understand the future savings, then it is a “no-brainer in most cases,” Vlastelica states.
The only challenge for the company is “getting its foot in the door” and standing out in a saturated industry. “There are over 17,000 ESCO’s [energy service companies] calling businesses claiming they have the latest and greatest thing. Quite frankly, many of them should not be in the business and are fly by night guys. Businesses have a hard time knowing who they can trust. Once we get in, we can show our prospects we have superior technology and are the right people to work with.” This is no small task, however, as executives are busy with many other priorities besides lighting. To overcome this hurdle, Contemporary Energy Solutions works with clients to understand their business priorities and invests resources to educate them on new trends specific to their industry.
“Many times we are able to show them how besides the obvious energy savings, new lighting can help them address and improve other areas of their business such productivity, safety, and even employee retention.” The company is successful because of its expertise and knowledge and repeat customers often refer peers via word of mouth, as well. “Our access to industry leading technologies at competitive price points gives us a huge advantage. We are often able to deliver recurring annual savings 20 to 50 percent higher than industry norms,” Vlastelica adds. “Our process takes all the risk out of the equation for the buyer, giving them peace of mind they are making the right choice. Selecting the wrong company or technology can be a very expensive mistake in our industry. Our core value proposition of superior technology and customer-first mentality has been validated in the marketplace”
Each client is different, but companies operating older lighting systems are often the best customers. “It is costing them a lot of money to operate old lighting and they are running on tight margins,” Vlastelica says. “Our clients want to squeeze out every dollar they can with improved efficiencies. So if they can reduce their lighting load, it becomes a great opportunity.”
For many commercial and industrial facilities, lighting costs can equate to 10 to 80 percent of total energy costs. Contemporary Energy Solutions also helps clients utilize any available utility rebates, grants, and government incentives offered to improve energy efficiency. These can be substantial in many cases.
When clients agree the economics are viable, Contemporary Energy Solutions then proceeds to the lighting technology demonstration phase, exhibiting different lighting options. “There is so much out there now” in the world of current lighting technology. “LED is the hot new thing,” Vlastelica says. “It is a very promising new technology. We are excited about that for the future.”
For many clients, however, fluorescent lighting is a better choice, he says. Fluorescent, or HIF, is a proven technology more competitively priced than LED for many purposes. Yet, LED lighting is making fast progress for specific uses such as exterior lighting, high bay lighting and lighting in ambient temperatures, though its upfront costs may be greater. “We are seeing prices come down and more of our clients are making the jump to LED as the economics improve.”
Contemporary Energy Solutions does not advocate any type of lighting but advises customers of all their options, walking them through the advantages and disadvantages of each technology. “The great thing about us is we are agnostic about which technology is best,” Vlastelica says. LED lighting is increasing in popularity, so “we are seeing more and more companies going to LED,” he reports. “The reality of this business, however is that no single technology is going to be the answer for all applications. We help our clients navigate through their options, and ultimately find the optimal balance of technology, savings, and economics.”
One thing, however, is the same for everyone. That is the fact that energy is not getting any cheaper. Twenty years ago, energy prices were low and people didn’t care about lighting costs or power consumption. Now, however, prices are rising. In addition, companies are becoming more eco-conscious and environmentally responsible. This translates into a desire to reduce energy consumption.
Besides the obvious impact in reduced energy costs and strong economic viability, there are other benefits to lighting upgrades. For example, recent studies have shown that new lighting increased productivity by 13 percent and decreased employee absenteeism by 25 percent.
Safety, too, is an important consideration, although proper lighting is an often-overlooked safety consideration. Many manufacturing, warehouse and distribution facilities also must be explosion-free so low-quality lights must be avoided. Furthermore, reconfiguring lighting often presents facility managers with an opportunity to maximize the effectiveness of lighting locations.
Although 90 percent of its business is in lighting, Contemporary Energy Solutions also offers other related services. For example, it has found opportunities in the deregulated energy supply market and provides energy supply analysis services. This helps companies reduce power bills by switching service providers. Rather than purchasing power directly from the utility company, it switches to third-party providers who offer lower rates.
Vlastelica is also researching HVAC and compressed air technologies. In the meantime, however, lighting remains the company’s main area of focus. “We have a great track record with lighting,” he says. “We are always doing research and finding new ways to help our clients save money.”