Use the ESCO model for new lighting

How can you finance your energy renovation with the ESCO model?

Many private and public organizations want to undertake an energy retrofit because of the long-term benefits of making their lighting more energy efficient. However, the desire for an energy retrofit often comes to a standstill when the question of financing the new and energy-saving lighting option arises. However, there is a solution to this problem, and it's called ESCO.

There are many good reasons to energy retrofit the lighting in your organization. Energy retrofitting your lighting can minimize your energy costs and thereby improve your organization's financial situation. In addition, energy retrofitting can also improve your organization's CSR profile by reducing your organization's energy consumption. In this way, energy retrofitting can support your organization's desire to be responsible in terms of energy policy and the environment.

While there are these significant benefits to retrofitting your organization's current lighting solution, many organizations tend to postpone or shelve plans to retrofit due to the issue of financing the project - how will the project be financed? In other words, the issue of financing is often the biggest hurdle for organizations considering energy retrofitting their current lighting. And with good reason, because for many organizations, implementing a new, energy-saving lighting solution can indeed seem like a daunting and expensive undertaking. Especially considering the fact that the investment in energy retrofitting only pays for itself several years after it has been implemented.

However, there is a business model that can help many organizations facing financial challenges related to energy retrofits. By taking advantage of this model, you no longer have to postpone or put off the idea of making your organization more green and energy-friendly. The model in question is called ESCO.

Let's take a closer look at the ESCO model's smart financing method, which has helped many organizations implement successful energy retrofits over the years.

ESCO models

The ESCO model has already kick-started many previous energy retrofits, and this model can serve as a good starting point for your considerations if you are considering energy retrofitting the lighting in your organization.

The abbreviation ESCO stands for Energy saving company. ESCO is a financing agreement between a so-called ESCO organization and an organization that consumes energy. An ESCO can be any organization that sees energy renovation as an investment and wants to finance an energy-consuming company's energy renovation to be repaid later by the energy-consuming company. The point of the ESCO solution is that the organization that undergoes an energy retrofit uses the extra money gained from the reduction in energy costs to repay the ESCO organization over time.

Let's get an overview of the ESCO process:

From the perspective of the energy-consuming company: When the ESCO project starts, the energy-consuming company does not have to pay for the project right away.

From the ESCO organization's perspective: The ESCO organization considers the energy renovation as an investment, and thus this organization finances the energy renovation.

The financing solution: In most cases, the ESCO that paid for the energy renovation of the energy-consuming organization will have its project costs covered within the first few years after the renovation. The costs are covered through the cost reduction that the energy-consuming organization achieves by implementing a new and energy-saving lighting solution.

So far, the energy-consuming organization is typically a public organization, but the model can also be used by private organizations that have high energy consumption. As mentioned earlier, for many organizations, the ESCO model can be the optimal solution to kick-start an energy renovation that can lead to massive savings on energy costs.

Energy renovation with LED lighting

An obvious option when looking to make your organization more energy efficient is to install LED lighting.

When you install LED lighting, you get two extraordinary benefits:

Massive energy savings of up to 75% compared to traditional light sources and a corresponding reduction in CO2 emissions.

Nearly eliminating maintenance costs due to the long lifespan of LED bulbs.

How can we help you?

Lumega is appointed as an ESCO partner. We can therefore help you finance a lighting solution that guarantees energy savings from the moment you install our LED lighting. You can read much more about the benefits of LED and the advantages of an ESCO financing agreement here.