Lesson 3 – Pittman

The difficulty that most energy efficiency projects encounter is the typical large upfront cost. A full home energy efficiency retrofit project would include lighting, HVAC, insulation, windows, appliances and replacement of other energy consuming devices. For a small home you would very quickly get your costs into the five figure range and large homes could potentially get into the six figures. Energy efficient retrofits of commercial locations could far exceed the numbers of residential projects. For the average consumer these costs are prohibitive and are what is holding this country back from efficiency. The easiest way that the government could help facilitate these improvements would be to incentive consumers to make these choices. It could either be through tax incentives or through the funding of rebate programs. The government could really help the efficiency movement by reducing the upfront cost for consumers. These incentives could also apply to new construction, not just retrofit of existing buildings. An additional way that government involvement could facilitate efficiency would have to take place on a local government level. Local government could implement building code that required energy efficiency in construction.

I would like to discuss my current business (without giving away any secrets) when I comes to developing a business that moves this idea forward. We are a registered participant in a utility’s lighting efficiency program. The way this program works is that the utility gives a flat rate rebate for each LED light that a customer purchases. To ramp up our sales and to make the efficiency upgrade process easier for customers we have rolled out a program that takes the paperwork out of customers hands and removes any hassle. It also significantly reduces their upfront cost for lighting upgrades. The way our program works is that we file the rebate paperwork for the customer, we have the rebate check sent directly to us and we discount the customer invoice by the amount of the rebate they were set to receive. This give the customer the benefits of not dealing with the filing of the rebate paperwork, significant cost reduction and a much shorted payback period for their upgrade. It give us the benefits of easier sales and happier customers. If there were government programs functioning the same way as these utility programs, a company that positioned itself as a subject matter expert concerning the program could really carve out a niche for itself and build a strong loyal customer following.

4 thoughts on “Lesson 3 – Pittman

  1. Hey Mike, that’s an interesting program your company has. Anything that makes the process easier for you customers is always good. I’m surprised the utility company has a rebate policy promoting efficient lighting. Isn’t that costing them money? I wonder if this is something that is common and if utilities will continue offering these types of programs?

    • I think it is a fine line they have to walk but what if giving away 100 million dollars of lights keeps them from spending 5 billion to build a new power generation facility?

  2. Hi Mike,
    In my line of work I deal with a company that does much of what your company does. We are an end-user and have installed hundreds of LED light fixtures throughout our plant. Most of the fixtures are retro fit kits. One of the questions I have is how they calculate the cost savings on the maintenance of the fixture. If we just compared the energy savings with replacing the old fixtures with LED fixtures there isn’t enough energy savings to justify changing them out. However, there is a cost savings that is used to calculate the savings on maintenance because the LEDs are supposed to last longer. This is true but the drivers don’t last that long. I’m just wondering if you know how it is calculated. This is a good business to be in right now. I can see that it is a growing business. What state are you in?

    • I’m in Illinois but we are based out of Missouri. The type of light that you need make a huge difference as well. We sell 4 and 8 foot LED tube lights. These not only last longer but they run on line voltage, can handle anywhere between 70 and 300 watts, while only pulling less than 18 watts. The advantage of this set up is that it takes the ballast out of the picture and removes that part of maintenance. They are also tested out at 50,000 hour life span.

Leave a Reply