Growing demand for plug-in electric vehicles (EV) is likely to coincide with the significant adoption of EV charging stations in commercial buildings. If true, the economics of lighting upgrades may change, putting all energy efficiency options on the table, including those previously limited by payback thresholds.
Carbon reduction is a national priority. The Biden Administration has made carbon reduction a national priority as a means to mitigate global climate change. In 2021, it set a goal to cut carbon emissions (from 2005) levels by at least one-half by 2030. This is reflected in the Inflation Reduction Act of 2022, arguably the largest climate legislation in history.
Policies of interest include a transition to clean energy, replacing fossil fuels with electricity in the building and transportation sectors (commonly called “electrification”), and ensuring sufficient EV charging infrastructure, all of it requiring a massive balancing act.
EVs sales are projected to surge in a relatively short time span. A significant contributor to national carbon reduction will be the electrification of transportation. That is, displacing fossil fuel-powered vehicles with electric-powered vehicles that produce zero tailpipe emissions.
Global consumer demand for EVs increased from 0.2% in 2011 to 4.6% of new vehicle sales in 2021, according to the International Energy Agency. Research firm Fortune Business Insights forecasted the U.S. EV market to grow from about $28 billion in 2021 to $137 billion in 2028. S&P Global Mobility projects U.S. EV sales may reach 40% of total new passenger car sales by 2030. Significant federal and state tax credits are available to defray the initial cost of EVs and hybrids, and a number of states are implementing zero-emission standards. As the world’s third-largest producer of EVs, U.S. EV manufacturers stand to benefit from this transition.
EVs need infrastructure to keep them powered. EVs are powered by batteries that energize one or more electric motors. In most cases, they can be charged anywhere electricity is available (depending on charging level and voltage) via a charging station, and they can be charged anytime, usually at a lower cost than gasoline.
The tradeoff is charging time. Where a fossil fuel vehicle might take 5-10 minutes to tank up, an EV can take 15 minutes to 24 hours to charge. The resulting lower utilization rate of electric fueling stations will likely lead to fuel being delivered using a distributed model compared to today’s more centralized gasoline fueling stations. From gas stations to anywhere electric power is available to properly supply various types of EV chargers. To facilitate this transition, the Department of Transportation approved plans from the states (plus Washington, DC, and Puerto Rico) to build a national EV charging network.
Providing this infrastructure is considered critical to EV adoption. While charging at home is common in the U.S., availability of workplace and public chargers is also highly important for accelerating EV adoption, according to the International Council on Clean Transportation. This is expected to alter the typical charging load profile.
Commercial buildings may incorporate EV charging infrastructure. Electrification is expected to impact the building sector, such as replacing residential heating systems with electric or hybrid units. A significant impact, however, will be commercial buildings that add EV charging on their properties. A commercial building may do this due to government mandate (as in the case of public buildings), as a potential source of revenue, or as an amenity. Various incentives are available such as government and utility rebates.
The cost of adding EV charging stations to a commercial building may be significant, however. Besides taking advantage of incentives, building owners have further incentive to minimize the amount of new infrastructure required.
Reducing energy consumption may be cheaper than adding electrical infrastructure. Finally, we get to the crux of the argument that the growing adoption of EVs may lead to greater demand for energy efficiency by altering the underlying economics. In short, optimizing energy efficiency can mitigate a portion of demand for new electrical infrastructure. In fact, the cost benefits may make options like networked lighting controls far more economically attractive both in new or existing construction projects. Though the energy savings for advanced lighting controls are often variable, they can be calculated or measured to establish a typical load profile, particularly if they are sensibly installed sooner in preparation for future addition of EV charging stations. Further, the data produced by the networked lighting control system increases in value in such a scenario.
Concurrently, electrification will place significant strain on the existing power grid, which may increase rates, result in new generating capacity among renewables, and stimulate utilities to commit to incentivizing efficiency more deeply as a lower-cost resource for satisfying power demand. This will further encourage and reward adoption of the highest energy saving options such as networked controls, promote DC-based lighting and control systems in buildings, and increase the benefits of data–a new crop of “low hanging fruit” in the existing buildings market.
To vet this hypothesis, Peter Brown, LC of Lighting Transitions; Gary Meshberg, LC, CLCP of Legrand; and C. Webster Marsh of Penumbra Controls and Boston Illumination Group presented a seminar on the topic at LightFair 2023.
Marsh pointed out that the additional power infrastructure can pose a major investment. “Not all charging stations are created equal,” he said. “Some require very little power but take a long time to charge an EV. Others may require immense amounts of power but will charge much faster. This would not only increase the electrical demand of the property but also require additional power infrastructure to support it.” Infrastructure that can impose a significant cost.
A mitigating factor, Marsh pointed out, is what he, Brown, and Meshberg call electrification offset, or reducing electrical demand to compensate at least in part for the new demand of electrification. If an energy efficiency measure reduces both the cost of adding infrastructure and generates ongoing energy savings, it becomes more viable for investment by potentially offering a greater return.
“By adding an NLC that can help compensate for the increased demand for new EV charging stations, you’ve saved the time and money that would otherwise be required to add more infrastructure to the property,” Marsh said.
This by no means suggests that lighting is a panacea, providing a perfect offset. Rather, the point is the value of lighting efficiency is likely to increase as a mitigating factor as every energy efficiency measure—from advanced lighting controls to HVAC and building envelope improvements along with data and programmability—becomes worthwhile to consider.
Lighting has long been a keystone for improving commercial building energy efficiency. Naturally, this includes traditionally low-hanging fruit such as replacing legacy lighting with LED systems. Incorporating the cost savings of electrification offset, however, potentially puts more aggressive energy-saving options on the table such as space-individualized lighting design, networked lighting controls, and plug load control. These are options that may be eliminated in some retrofits due to insufficient ROI but now may become major contenders as the value of the energy savings increases due to the value of the electrification offset.
NLC and plug load energy savings may be significant. According to the Department of Energy, lighting’s share of an average commercial building’s electrical energy consumption was 12% in 2018. Plug loads, meanwhile, are estimated at 16+% and are projected to increase to 21% by 2050.
According to a 2017 DesignLights Consortium study of more than 100 buildings, networked lighting controls can deliver an average of 47% lighting energy savings, equating to roughly 6% of average buildingwide electrical energy savings barring the existence of any other lighting controls. Meanwhile, automatic receptacle control can reduce plug and process loads by 20-50%; assuming 30%, this translates to 5% average buildingwide energy savings.
Adding the two, we get 11% electrical energy savings, mitigated by existing adoption of lighting controls in the installed base for a rough net estimate of 8-9%.
Obviously, this is all back-of-the-napkin analysis, and as the concept is in an early vetting phase, that’s okay at the moment. The goal is to generate dialogue.
Though early days, the lighting industry can take steps to prepare for possible realization of this trend. Lighting professionals can benefit by considering electrification a potential business opportunity.
Learn more and share with clients. Stay on top of EV adoption, adoption of charging stations in your area, and the most energy-efficient lighting options such as networked controls. Keep abreast of rebates for EV charging stations and energy-efficient lighting and controls, particular the new generation of rebates promoting adoption of networked controls. Be prepared to engage customers about their options for an integrated approach to minimize costs. Even if they have already adopted some energy efficiency measures, it may be lucrative to upgrade the lighting system with comprehensive state-of-the-art design, lighting, and controls.
Stay informed about mandates and penalties. Some municipalities like New York are starting to implement carbon reporting requirements and penalties, adding another factor to ROI. Be aware of any such changes in your area and advise customers about them and their options ahead of time. Understand the potential role that data generation can play in helping buildings minimize emissions.
If networked controls are already installed, help the client use them. Networked lighting controls offer the potential for global programming, complex sequences of operation, integration with other building systems, and detailed data about energy consumption. Clients would benefit from tuning the system to optimize energy savings using measures ranging from space-individualized institutional task tuning to shortening occupancy sensor timeout settings.
Look at other opportunities. Installing EV charging in a parking garage may offer opportunities to evaluate garage lighting and optimize it for visual comfort and energy efficiency.
The future is electric. Electrification in response to policies and trends promoting decarbonization will likely have an impact on demand for electric power at commercial buildings. As utilities and building owners evaluate the costs of building new capacity, the value of reducing demand through energy efficiency is likely to increase, potentially increasing the value of the most energy-efficient options such as networked and other advanced lighting control solutions.
The above is a hypothesis with major ramifications for the lighting industry but one that is still being tested. When Marsh, Meshberg, and Brown presented these concepts to an audience at LightFair, it generated quite a big of animated discussion. What do you think? Please leave a comment to share your perspective on the viability of this potential trend.