Published May 20, 2017

Lighting as a service

Lighting accounts for a considerable share of properties’ electricity consumption and greenhouse gas emissions. Lem-Kem’s solution is to offer lighting as service with a focus on improving energy efficiency. The customer does not have to commit to a major investment up front; instead, the service is paid for from cost savings. Lem-Kem is a great example of a traditional operator that has successfully and in a short time managed to create a new service business.

Problem

Lighting accounts for a considerable share of properties’ electricity consumption, and energy production is a source of greenhouse gas emissions. The manufacture of light fittings also produces emissions and hazardous waste. Companies rarely have the in-house expertise needed to maintain lighting systems or replace them with more efficient solutions.

Solution: lighting as a service

Lem-Kem helps companies streamline their lighting systems by offering lighting as a service. The service includes the mapping of the condition and energy consumption of all light fittings and the selection of new lighting systems based on the customer’s needs. Customers can pay for the service from savings without having to invest large sums up front. Electricity and bulb consumption can be reduced significantly with long-life, energy-efficient solutions identified by Lem-Kem. At the end of the contract period, the customer can purchase the lighting system at one per cent of the total price of the investment. Lem-Kem can also incorporate solar panels into the solution.

Revenue logic and benefits to Lem-Kem

The implementation of the lighting service is partially facilitated by banks which fund the investment on the customer’s behalf. The investment is paid back by savings brought about by reduced energy consumption. Lem-Kem offers installation, funding and a warranty. The lighting service already accounts for approximately 40 per cent of Lem-Kem’s sales.

Benefits to customers and end users

Service users can cover the investment cost with energy savings without investing large sums in the new lighting system up front. The quality of lighting is improved, and unnecessary energy consumption can be reduced thanks to smart lighting controls. Electricity bills and carbon footprints are reduced.

Facts

Lem-Kem in a nutshell

Main business: wholesale of electrical equipment

Established: 1985

Net sales: €1-50 million

Launch of circular economy solution: the energy team was set up in 2014

Share of the circular economy solution of the total business: 30-40%

Employees: 10-250

Headquarters: Lahti

Website: http://www.lemkem.fi

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