Exclusive Interview with LED Source CEO, Marcel Fairbairn
LED Source is one of the few companies that we are investing in right now, the company has a strong base and in my opinion can catch up to an inefficient market leader in this industry, Philips.
Philips are looking to IPO at a valuation of $5.5b but LED Source will be hot on their heels over the next 12 months. An aggressive business model built on delivering a superior product through a more efficient model will serve the company well, over the next few years LED Source may well become the market leader in this multi-billion dollar sector.
We sat down with the CEO Marcel Fairbairn to discuss LED Source.
Q. Are LEDs considered more efficient than traditional lights?
A. Yes, far more efficient. Efficiency of light sources is measured using a term called “efficacy” which in this case, is a measurement of the number of “lumens” (a measure of light levels) created per “watt” of electricity. So, to compare, a typical Incandescent lightbulb has a LPW (Lumens produced Per Watt of electricity) rating of around 10 LPW. An LED lightbulb on the other hand is currently able to produce more than 100 LPW. So, using this 10 to 100 math (an LED is 10 X more efficient than the incandescent it replaces) – that means you can replace a 60 watt lightbulb today with a 6 watt LED, giving you approximately 90% savings on your electricity. As a result, LED is able to repay it’s initial cost very quickly.
How can someone know that the LED company they are looking at is reputable?
A. Great question considering so many are not. First, how long have they been in business. If it’s only a few months, I would proceed with great caution. If they’re been around a few years, you will want to know about some of the jobs they’ve been involved with and if your job warrants it, you might even want to talk to some of those customers. They’ll tell you about the company’s quality, response times, support and much more. Also, if the products being carried by that business have white boxes and no brand, it could mean they’re ordering unknown products from alibaba.com or other online “China Direct” sites. While you might still have a good experience, in most cases, quality, warranty and other issues will arise quickly.
How would I know if their product are reliable and what support should they offer? Will they be here after the sale?
A. Again, what brand(s) do they carry? Look up those brands – especially if you’ve never heard of them. Learn about the products, the warranties and of course, their reputation. A good price in the LED business can mean a lot of things. More often than not, you get what you pay for!
Is a warranty important? If so, how long and will it be honored?
A. You are buying LED products for a couple of reasons. Of course because they are more efficient and will save you money. However, if the longevity isn’t there to protect your investment, you’ll never realize those cost savings. Before the light pays back for itself, it’ll fail. And in many cases, if you’ve chosen a sub-par supplier and / or product, you are in trouble. So first, make sure the product has a warranty long enough to give you a good return on investment. In other words, if your project offers a 3 year payback, but the warranty is only 1 year, there’s a change you’ll never see a return. And even if the warranty says “Forever”, be sure to check out the company offering that warranty. What is their reputation? Are there complaints online about how they handled warranty? And even some very large and reputable brands are offering 10-year warranty, but when you read the small print, you realize it’s similar to tire or battery warranty where in 9 years, you’ll get a very small credit back to offset the cost of a replacement. Effinion® offers a 10 year “full replacement” warranty! If your product fails anytime in those 10 years, you get a replacement!
Should I be looking for LED products that are certified? Such as outside third party organizations like Energy Star and DLC?
A. Well, there are a couple of reasons why these certifications or listings are important. First, it speaks to the specifications of the product. Each of these certifications is forcing manufacturers to meet a minimum set of standards, for example with Efficacy or even Quality. But more important, in case you haven’t heard – there are potentially HUGE rebates being offered by energy utility companies almost everywhere. In some cases, these rebates can cover 50% or more of the cost for LED upgrades. In almost every case, those utilities are requiring that the product has either DLC (Design Lights Consortium) or Energy Star rating. Without those, you will not be able to apply for those lucrative rebates.
There are many different types of LED products claiming similar spec’s or features. How do I know if the products being sold offer the latest in LED technology and supports new technology for further energy savings?
A. Once again, the simplest way to assure that you’re getting good products with the latest technology is to buy from a reputable supplier. LED Source has been in the LED business since 2002 and we really are “Your LED Lighting Experts”. Second, just ask! “Mr LED guy, is there anything offered that might offer me additional benefits”? If he won’t tell you, or doesn’t know, then you might be dealing with the wrong folks. Also, controls are becoming more important. And by controls, I am not talking about just the dimmer or on/off switch on your wall. LED products are starting to add technology that allows advanced connectivity, reporting and control over the light itself using sensor and wireless technologies developed in the IoT (Internet of Things) world. Today, we are at the front end of a very exciting business where everything will be connected to everything else. LED Source and Effinion are on top of this technology and releasing cutting edge controls in roadway, industrial, retail and even our new horticultural (grow lighting) ranges.
How available is financing for an LED upgrade? Don’t most companies offer a financing option or various financing solutions?
A. LED Source offer a very unique financing solution with LouMan Money®. You are able to create an LED solution, have it design, supplied and installed without ever reaching into your wallet! And only after you’ve begun saving money will you begin paying for the upgrade… and even then, it’s typically lower than what you were paying before for electricity and maintenance. It’s true. If you’re paying $10,000 per month for lighting electricity and maintenance costs combined, we will likely come back with a deal where you will pay $9,000 for electric and the new lighting upgrade. Without touching your own money, you will have immediate cashflow of $1,000 per month, plus, in a couple of years when payments are complete, you will save thousands more!
I have heard of a term called CRI – what is that and why is it important?
A. CRI stands for Color Rendering Index. In layman’s terms, it is a number that will tell you how well a light source will reproduce color. One of the things that caused LED products to take longer to impact some markets was their ability to get CRI nearer to the incandescent lights it would replace. The Sun, Incandescent and Halogen are very high CRI, at or near 100 on a scale that goes to 100. Whereas Fluorescent is 50-70 CRI. Today, some cheaper LED products are below 80 CRI while good LED including the new Effinion® Decade Series are all 90 CRI or better. To the untrained eye, you won’t notice any difference between the light from a high CRI LED or incandescent. CRI has a huge effect on food, skin tone, artwork, hair color, retail products and more. In those applications, you should always choose a product with a CRI of 90 or higher.
What are the new markets/applications that are now moving towards using LEDs?
A. Almost every lighting application is quickly moving to LED and some, like automotive, traffic lights, televisions and even refrigerators have already move almost completely to LED. Certainly, one of the most exciting new markets being addressed by LED Source and Effinion is the horticulture industry. Whether growing vegetables and fruits or medicinal marijuana, we are now able to offer replacements to the old fashioned metal halide solutions that offer much lower energy usage, better control over light distribution, lower heat generation and state of the are controls and sensors to monitor the air quality, growth and water levels.
Do you offer an ROI (Return On Investment) analysis?
A. Yes, typically when an LED Source Expert is working with a client or prospect, we will prepare a detailed proposal and analysis of the solution being offered. This proposal will give the buyer a lot of financial data with which to make his educated purchase decision.
Do most LED products have the same expected life hours?
A. No, and in fact, a common trend in the industry has been to reduce the expected life of the products in direct relation to reducing costs. In the early days of LED, every manufacturer was lazily copying the spec’s from the chipsets which were typically 50,000 hours. However, that spec is based on the optimum power driving, heat dissipation, etc. In most cases, once the chipset was put into a product, it didn’t meet the same criteria, so the end result was that product were never lasting anywhere near the 50,000 hour rating. Today, you will find a lot of lamps with a rating of only 15,000 to 25,000 hours however, most quality fixtures are increasing their rating to 100,000 or more. In practical terms, a product with an hour rating of 100,000 hours is going to last 20-25 years or more!
With LEDs lasting longer than traditional lighting, how long can I really expect it to last and do they just burn out?
A. An interesting difference between traditional lighting and LED is the way they are rated. For example, your basic 60w lightbulb might have a rating of 2,000 hours but the LED is 25,000. Well, it’s even better than that. The traditional bulb is based on a failure of 50% of those tested. In other words, if they are testing 100 bulbs – when 50 fail, that’s the number. So at 2,000 hours, half of your bulbs will already have died! With LED they are rating it to LM70 in most cases. LM stands for Lumen Maintenance and the 70 is 70%. So at 25,000 hours, they are saying that bulb will still be 70% of it’s original intensity. You see, unless a power supply or another electronic component fails, LEDs do not “burn out”. They fade very slowly over time to a point where eventually you won’t see it anymore. Think about it… have you ever seen an LED indicator on a phone or any piece of electronics fail?
I have heard that if I am using fluorescent bulbs that I need to dispose of them safely. Are LEDs safe to use?
A. That is correct. Fluorescent and CFL products contain enough mercury to cause damage to yourself and / or the environment. LED’s do not contain any contaminants or harmful materials. And in fact, more than 90% of the components in many of the LED products sold today are recyclable!
I have heard that LEDs are more expensive than traditional lighting. If so, how would that save me money today? Should I just wait?
A. Although the costs have dropped dramatically in recent years, LED will still cost more than most comparable legacy lighting products. Because of the huge savings generated, that difference is made up very quickly though, and many years of ROI follow. Waiting costs you money!
Do you offer local utility rebates or tax incentives that would further enhance the savings on a project?
A. I mentioned that earlier. Yes – in most states, the energy utility company is offering rebates to incentivize their customers to make the switch to LED. At LED Source, we are able to work with our clients to help realize those rebates and we are a close partner to many of these companies.
How do LEDs play a part in maintenance / labor cost savings?
A. Because LEDs tend to last for many years and are not susceptible to cold, vibration or other issues that might cause other lighting to fail, LEDs will save a great deal on maintenance. Think of an average office building where each 2X4 has 3-4 fluorescent tubes. Each of those will likely be replaced at least one time over a period of a year. Now, multiply that times 4 and then times the number of fixtures in the building. That’s a lot of ladders being carried around the building!
Do I have to replace my fluorescent fixture or are there other options to just retrofit?
A. In the early days, replacing tubes was a chore. You were forced to re-wire your fixtures which in many cases carried a significant cost. Now, we offer technology in Effinion where you are able to change out your tubes with LED without any modifications to the fixture.
Can I truly just use an LED tube instead of a fluorescent one and get better energy savings?
A. Yes. Even if you’ve already upgraded to “efficient” T8 or T5 fluorescents, LED will save you 50% of your energy plus maintenance savings AND produces a better, more even light.
If have heard of the term “connected LED lighting” can you tell me how that can save me money?
A. I mentioned this concept earlier where everything is connecting to everything else. So think of “smart” lighting that not only knows what time of day to go on or off, but is able to know when you’re pulling your car into the garage, or when you’re on vacation, or when the natural light in the room is high enough so that the light can turn itself off. This and so much more is already being offered by LED Source.
Do all LEDs dim? Why is that important to energy savings?
A. Not all lights need to dim, so it’s still offered as an option on most LED products. This is in order to keep prices down. If you require dimming, be sure to select a product that offers dimming. And in some cases, say your living room, a massage room, or a retail display – you might want to see the dimming before making your choice. At LED Source we are very knowledgeable on different dimming systems and technologies. Not all LEDs dim the same and in some cases, a dimmer will cause LEDs to flicker. Never ideal! The ability to control dimming in commercial applications, especially in areas not always inhabited (think warehouses and stair wells), dimming can increase savings by double or more!