Cashflow-positive financing can take the risk out of lighting upgrades. Hubbell Lighting has developed financial tools to get even large-scale, enterprise-wide projects moving.
We've been watching the growth of an infrastructure to finance LED conversion projects, along with moves by some big players (including Philips, this site's sponsor) to bundle financing in with all-inclusive lighting-as-a-service deals.
Hubbell Lighting now enters this picture with financing and tools to enable a green light for energy improvement projects, even those at the largest enterprise scales.
This solution is not a comprehensive, all-in service like the one Philips is offering. It involves taking a detailed look at the potential customer's needs, crafting a set of solutions from Hubbell's vast array of product areas, and presenting a single, cashflow-positive proposal to the decision maker. In fact, the company calls its financing capability "Cash Flow Positive."
Noise in the market
Hubbell has been struggling (as many of its competitors must be) with convincing customers of the ROI from lighting modernization projects. As Hubbell executives explained to Forbes.com, it's not that the paybacks are unattractive. One source of confusion is the diversity of the sprawling lighting marketplace. There are distributors, dealers, brokers, independents, lighting showrooms, startups, and who knows how many other players loudly trying to communicate with customers. They're all using different models and different frames of reference to talk about ROI. It can be hard for any company to get its message through such confusion.
Another piece of friction that slows down consideration of energy-saving projects is the understandable preference of companies to use their scarce capital for purposes closer to their core business. Cash Flow Positive removes the need to apply capital at all.
In helping large enterprises figure out energy savings, Hubbell has an advantage over smaller lighting operations: the sweep of its portfolio, built up in scores of acquisitions over the last half century. As long as its IT and product integration are up to the task, that large portfolio allows Hubbell to address any lighting need, indifferent to which technology might be best for the job. It can also offer building automation, air conditioning, and other related products well outside the lighting arena.
The portfolio's breadth also lets Hubbell avoid what Tom Benton, vice president of strategic accounts, called "cream skimming" -- the tendency of companies with energy-saving projects to stop after implementing only the lowest-hanging fruit. Wrapping all the potential projects, large and small, into one cashflow-positive package makes the whole more attractive to companies looking to turn over many noncore problems to one trusted business partner to solve.
Benton told Forbes.com that the uptake for Cash Flow Positive had exceeded all of the company's projections.
There are dozens of projects in the millions of dollars, spanning education, auto dealerships, hotels, commercial buildings, retail projects, malls, airports, industrial projects, bridges, marinas, and even banks who see the value of financing lighting renovations through the Cash Flow Positive program.
Forbes.com noted how much the availability of third-party financing has multiplied the uptake of rooftop solar -- in some markets, 80% of new installations now use TPF. The same effect could well occur in the changeover to SSL.
— Keith Dawson , Editor-in-Chief, All LED Lighting