Creative finance structure funds $325,000 lighting upgrade with monthly energy savings

Industry: Clean Technology

Despite significant monthly savings associated with energy efficient lighting, high upfront costs delay many businesses from installing new systems. In the non-profit sector, the challenge can seem insurmountable. But financial solutions can be leveraged by lighting vendors to make upgrades possible – and profitable – to customers. DLL partnered with Linmore LED Labs to provide a church with a complete lighting retrofit.

Background
Linmore LED Labs offers top performance LED lighting solutions to minimize energy consumption and maintenance, elevate sustainability, improve aesthetics, and correct lighting levels. Their client, Valley Baptist Church, was in desperate need of a full lighting retrofit to replace 2,000 indoor fixtures and install 64 site lights in the parking lot of the church. The project would give the church’s interior an updated look, light a previously dark parking lot – and save enough energy to reduce the church’s utility bill by an estimated $9,978 per month.

Challenge
Like so many non-profits, the church was not in a position to cover the lighting project retrofit cost of $325,000. “They wanted to sign up, but just couldn’t make the numbers work,” said Linmore President and CEO Paul Chamberlain. “It was a Catch-22. They needed to realize some of the savings we were telling them this project would provide in order to pay for the project itself.”

Additionally, the price quoted to the church factored in substantial rebates being offered by their local utility. However, those rebates were set to expire and Linmore would be forced to increase the project’s total cost by nearly 10 percent. If they wanted to benefit from the rebates, the church needed to act fast.

“I didn’t know if we were going to be able to make this work for Valley Baptist,” said Chamberlain, “it needed to be done – both for the energy savings and added security to the exterior, but it just didn’t seem feasible considering the cash-flow limitations they were up against and the time frame for the rebates that we were up against.” At that point, Linmore LED Labs reached out to their finance partner, DLL.

There’s just no way that we could have made this work without DLL. This project is making the church $1,500 per month for the next 36 months – and after the lease is up, the fixtures will be theirs and the energy savings will just keep coming."

Solution
Working directly with the church, DLL Account Executive Shane French structured a 36-month capital lease that allowed the church to pay for the entire project in monthly installments lower than the amount the updated high-efficiency lighting would save them on their utility bill. The financing structure provided all the benefits of the upgraded lighting with no upfront costs and netted the church $1,500 in positive cash flow per month.
There was also an additional benefit for Linmore beyond meeting the customer need. Instead of a traditional financing agreement in which Linmore would be paid upon completion of the entire project, DLL recommended the project be separated into two parts, enabling Linmore to receive payment sooner as each phase of the project was completed.

Results
Within three weeks of introducing the lighting finance solution, the contracts were signed and the project began—giving Linmore plenty of time to take advantage of the utility rebate incentives, and passing the savings on to their customer.

“There’s just no way that we could have made this work without DLL,” said Chamberlain, “For all intents and purposes, this project is making Valley Baptist $1,500 per month for the next 36 months – and after the lease is up, the fixtures will be theirs and the energy savings will just keep coming.”

“DLL was very timely and efficient with short notice to close the loan for our church lighting project, said Valley Baptist Operations Manager Kari Evans. “With impending deadlines, they were in constant communication to answer any of our questions and worked promptly to find us a loan structure that worked for our church. We would not have been able to complete the project on time without their expertise.”

Learn more about DLL’s clean technology financing solutions for vendors, go now.