The Lure of LEDs

When trying to make a building more energy-efficient, it’s tempting to go after the so-called “low-hanging fruit.” For instance, get the super to remove the outdated incandescent light bulbs in all common areas and replace them with state-of-the-art light-emitting diode (LED) bulbs and – voilà! – watch your electricity bill go down. Dumb move.

The board at a 35-unit co-op on the Upper East Side resisted this temptation and instead followed the Con Edison playbook for a building-wide lighting upgrade. By taking a more holistic approach, the board was able to take full advantage of Con Ed’s numerous incentives and rebates, not only on LED bulbs but also on buying new fixtures and retrofitting existing ones. As a result, the co-op is likely to see a far richer payout than it would have realized by simply plucking the low-hanging fruit. Smart move.

At the Upper East Side co-op, property manager Dawn Dickstein, president of MD Squared Property Group, played by the book. In November 2016, she was contacted by Justin Gillen, founder of a company called Retrofit and Relamp With LEDs, which is one of more than 200 so-called “market partners” certified by Con Ed to oversee lighting and other energy upgrades. This partnership is a requirement for boards to be eligible for the full array of Con Ed benefits and incentives.

“Dawn said she had a building for us to look at,” Gillen recalls. “So I went there and walked through the building with the super and did an audit of the lighting with an app on my phone. We took pictures of the fixtures in the common areas, cataloging types, wattage, how long they’re on. Then we looked at the electric bill to see if they paid the System Benefits Charge (SBC).” The SBC is a surcharge, proportionate to the size of the electric bill, that’s collected by Con Ed to build up a fund to pay for energy-efficiency upgrades. The vast majority of co-ops and condos pay into the fund, according to a Con Ed spokesman, and the Upper East Side co-op cleared this hurdle. A portion of the SBC is kept by Con Ed, a portion is sent to the New York State Energy Research and Development Authority (NYSERDA), and a portion is sent to the State Department of Public Service. (The SBC is in the process of being terminated. In the future, Con Ed and other utilities will fund their energy-efficiency programs through the rates they charge, without a surcharge.)

Once Con Ed had pronounced the co-op qualified, Gillen used his data to prepare a cost/benefit analysis, which Dickstein then took to the board. The board agreed to move forward. Gillen then submitted the final proposal to Con Ed, which did its own inspection of the property to corroborate the accuracy of Gillen’s findings.

“They don’t want to give money to people who have already done an LED lighting upgrade,” Gillen says. “They want to make sure their money isn’t being pocketed by somebody.” “If you already have LED bulbs, we won’t pay for new LED bulbs,” says Phil Madnick, a program manager in Con Ed’s Multifamily Energy-Efficiency Program, which helps with upgrades to electrical and gas systems in buildings with five or more units. “The crux is that we have to document what a building has now and where we can go,” Madnick adds.

A Smorgasbord of Rebates

The Con Ed incentives are designed to improve energy efficiency both in common areas and inside individual apartments. They include rebates not only on LED light bulbs, but also on new lighting fixtures, fixture retrofits, motion sensors, showerheads, faucet aerators, pipe insulation, thermostatic radiator valves, and conversions to gas-fired boilers. Boards cannot participate in the program twice, and they’re ineligible if they’re already receiving incentives from NYSERDA. Madnick advises boards interested in upgrades to call Con Ed at 844-316-4288 or visit its website at coned.com/energyefficiency.

Once incentives have been approved, they’re available for 45 days – meaning boards must be committed to doing the work promptly. After the job is completed, Con Ed performs another inspection. Provided the work has been done according to the approved plan, a rebate check to the board is usually cut within four weeks. The cost of the upgrade at the Upper East Side co-op was $4,100 for LED bulbs, new fixtures, and fixture retrofits. After receiving a $2,200 rebate from Con Ed, the cost came down to $1,900. If Gillen’s calculations hold up, the co-op will recoup its investment in just 16 months.

Extra Upgrades

Because it was a relatively small job, the Upper East Side co-op was unable to take advantage of certain upgrades, including motion sensors, which turn off lights in such common areas as parking garages, stairwells, storage rooms, laundry rooms, and hallways when they’re not in use. Con Ed has return-on-investment guidelines; in order for an upgrade to win approval, it must pay for itself over time.

Gillen says that motion sensors are gaining acceptance in New York, but a “comfort factor” still leads many boards to resist installing them in hallways. However, he’s currently doing a cost/benefit analysis of a building in Scarsdale that has about 180 light fixtures in its parking area. “We know that adding motion sensors there will save more energy than the sensors will cost,” he says, “so that’s what we’re going to do.”

It’s still too early to tell how much energy – and money – the Upper East Side co-op will save from its switch to LED lighting. “The jury’s out,” says Dickstein, the property manager. “I don’t know what kinds of savings we’ll see, but intuitively it makes sense that we’re going to save money. We got new fixtures, and the hallways look better. The super doesn’t like it because the hallways are brighter and he says dirt shows up. But he doesn’t have to worry – he’s very clean. I don’t think there’s any downside.”

According to Con Ed, since 2010 the Multifamily Energy-Efficiency Program has distributed $60 million in incentives to 120,000 apartments and 8,500 building common areas. Gillen says that acceptance of lighting upgrades has been on the rise since he founded his company in 2012. The allure of LEDs is obvious: the cost has dropped by 90 percent in the past decade, and now a 60-watt equivalent LED bulb costs about $3; LEDs use at least 75 percent less energy and last at least 25 times as long as incandescent bulbs, which actually produce far more heat than light, a major waste of energy.

“Acceptance was slow at first, but in the past couple of years it has become more mainstream,” Gillen says. “I think there’s a bigger push in a lot of larger box stores, as bigger lighting companies are getting into the market – Philips, GE, Sylvania. They’re making the pivot into LED technology. Yankee Stadium has LEDs now. The other thing is that costs have dropped and awareness among consumers has increased. The longer boards wait to retrofit the building, the more money they’re going to waste.”

“It’s definitely making a difference,” says Con Ed’s Madnick. “This year alone we’ve had 2,000 applications. It’s made a dent.”