LED Street Lights – How Your Small Municipality Can Afford Them

Many small municipalities across the country are facing a challenging dilemma – they have aged street lighting, and the high utility and maintenance costs that come with them, but no funding to upgrade to high-efficiency LED street lights.

But what if the electricity and maintenance costs were guaranteed, with savings that exceed the monthly cost, thereby making the project possible with no out-of-pocket costs? What if, in addition to replacing outdated high-pressure sodium (HPS) lighting units with LED street lights, you could add advanced program and dimming controls, GIS mapping and other advanced features? This is where energy performance contracts come into play.

In New York, an energy performance contract is made possible by Article 9 of the NYS energy law. The projects pay for themselves through energy savings upgrades and include capital deferred improvements. It’s essentially a financing program that is structured to generate positive cash flow every year for the term of the project, with no out of pocket cost. As a result, the projects do not affect the tax base or debt limit. The annual savings are guaranteed by eligible energy efficiency firms like SmartWatt, who can further streamline the project with a design-build process and engineer the project to maximize utility rebates. Since the savings are guaranteed by the energy efficiency firm, they pay the difference should the actual savings fall below their projections. The municipality does not assume this risk.

There are many benefits of an energy performance contract when it comes to LED street lights. They provide energy cost savings, replace antiquated equipment, virtually eliminate system maintenance and encourage energy efficiency throughout the municipality. The process is easy and takes about a year, from the no cost preliminary feasibility assessment through project completion.

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