Philips Lighting Solutions has joined a Standard Bank programme that helps companies sell carbon credits they create by using energy efficient lighting. The programme provides a mechanism through which companies can save up to 80% on their lighting costs and simultaneously generate revenue through the sale of carbon credits.

The Standard Bank initiative is called the Corporate Energy Efficient Lighting Open Access Carbon Project. It is a programme of activities registered with the Clean Development Mechanism (CDM) executive board of the United Nations Framework Convention on Climate Change (UNFCCC) under the Kyoto Protocol.

Megan Louw, Philips Lighting Solutions general manager, says that lighting is one of the easiest ways to tackle the financial pressure of strained business conditions, rising electricity costs and the prospect of future carbon taxes. She says lighting projects also help meet building efficiency standards and contribute to a brand’s alignment with sustainability. In addition, changing to energy efficient lighting also contributes to reducing energy consumption.

Reduce energy cost by 50%

“But the immediate concern for most organisations is that the true cost of electricity will have soared by 220% from R250/MWh in 2009 to R808/MWh in 2014, taking into account tariff hikes and proposed carbon taxes. When you consider that lighting typically constitutes 20% of the overall energy cost of a commercial building, being able to reduce that cost by 50% constitutes good management,” says Louw.

Changing from incandescent to LED light bulbs can cut some 20% off building management costs. “With Eskom subsidies, this kind of retrofit can cost almost nothing,” Louw says. “But there’s no structural change, because it’s easy to later swap an incandescent bulb for a faulty LED one. A permanent switch to energy efficiency occurs when an organisation replaces its luminaries, so that incandescent bulbs can’t be used, and changes its entire lighting design to get the best lighting for the least amount of energy. This can save 50-80% of the lighting bill.

“The full solution is to add intelligence such as daylight harvesting and motion detection. The system dims or switches off lights when there is enough available light, or switches lights on only when someone enters a room. This affects all the circuits in the buildings but reduces the lighting bill by up to 30%.”

Carbon credits will create revenue

Geoff Sinclair, head of carbon trading at Standard Bank, points out that making these changes presents a real opportunity but does also involve upfront costs for organisations. “Our energy efficient lighting project is designed to offset that cost by creating revenue from carbon credits.

“Including Philips Lighting Solutions in the carbon programme means that even more of the financing headache can be taken away from organisations, with an integrated solution including facilitation of the Eskom Integrated Demand Management subsidies, carbon finance and asset finance. It’s a powerful business case that involves converting environmental custodianship into a financial asset for the business sector,” says Sinclair.