Integrated Daylighting Systems Go Mainstream in 2013

2013 proved to be a banner year for integrated daylighting and artificial lighting systems. These systems became widely available across multiple geographies, exhibited low payback periods and attractive financial returns, and the technology developers saw their revenues and profit margins rise. A combination of technology, policy, and financing developments have led to this success.

The basic idea behind an integrated lighting system is simple – to let daylight in, without the glare, so as to reduce artificial lighting consumption. There are benefits – lower electricity consumption, enhanced user comfort, and, in some instances, a measurable uptick in the retail business or employee/student productivity. Our conversations with architects lead us to conclude that to realize the full benefits, relying on users to turn off the lights is not a reliable strategy. Therefore, there is the need for integrated solutions combining daylighting skylights or glazings with backup light-emitting diode (LED) or compact fluorescent light (CFL) lighting systems. The integrated systems necessitate use of daylight and occupancy sensors, so that when a room is occupied and the daylight falls below a set level (e.g. 500 lux for retail or 150 lux for industrial storage), the backup lights turn on.

Lux’s analysis indicates that a state-of-the-art daylighting skylight installed in southern California will have a payback period of three years, translating to a return on investment (ROI) of 31% (client registration required), assuming system lifetime of 10 years and cost of capital at 7%. Using backup LED lights with daylighting and occupancy sensors will increase the upfront cost somewhat (e.g. currently at $1/ft2 for Skyshade in India, translating into $0.04/lumen), but the ROI increases to 50% or higher depending on what kind of lighting system is replaced.

On the technology front, many materials developers, such as Skyshade and Econation, announced an entry into developing proprietary sensors and offer integrated systems. 2012 saw value chain integration (client registration required) from the opposite end with Acuity Brands – a lighting hardware company acquiring SunOptics. Along similar lines, lighting hardware company Cool Lumens and daylighting materials manufacturer Bristolite released a jointly developed product in August (client registration required). The CEO of Sundlier told us that the company is working with Abrisa coatings to apply an inorganic coating to its prismatic daylighting skylights, to reduce the solar heat gain coefficient (SHGC). So far, commercial daylighting systems have not offered any SHGC reduction benefits, so this is the first product of its kind. At the GreenBuild conference in Philadelphia, integrated lighting was predominant, with many firms, such as Autodesk, announcing building integrated modeling (BIM) solutions specifically for daylighting as part of their EnergyPlus platforms.

On the policy front, International Energy Conservation Code (IECC) announced: a requirement that daylighting locations be shown in floor plans; a U-value and solar heat gain control (SHGC) requirement for all fenestration replacements; and a reduction in the minimum size for mandating a daylighting skylight, from 10,000 ft2 to 2,500 ft2. American Society for Heating, Refrigerating, and Air Conditioning Engineers (ASHRAE) announced changes in its 90.1 code, requiring double-glazed fenestrations, daylighting sensors in combination with low-lighting power density (LPD) bulbs, and a maximum specification for visual transmission (VT) / SHGC ratio.

On the market development side, daylighting solution providers continued to acquire credible customers, e.g. Skyshade completing a 100,000 m2 installation for Indian Railways, and Econation acquiring Total, Kellogg, Unilever, and Sita.

These favorable policy and market adoption trends have translated into attractive financial results for daylighting companies. On January 9, Acuity brands reported a 20% rise in revenues and a 39% rise in profit margins for Q4 2013 over Q4 2012. Econation CEO Maarten told us that the company has experienced 300% revenue growth in 2013 and an after-tax profit margin of €450,000.