When global third-party logistics company (3PL) syncreon went to upgrade the lighting at its DC in Niederaula, Germany, it didn’t take the usual route. Rather than going out and buying all new fixtures, the company decided to take lighting off the balance sheet altogether and go with an outsourcing model. To be precise, the 3PL, which provides supply chain solutions for automotive and technology customers, would “rent” high-efficiency LED lighting from an outside partner on a “light as a service” basis.
What set the whole thing in motion was syncreon’s quest to trim both its energy costs and its carbon footprint at its 180,000-square-foot facility in Niederaula. Germany has the second-highest electricity costs per kilowatt hour (kWh) in Europe, resulting in significant energy spend with the older lighting system. On top of that, syncreon, which prides itself on sustainable operations, was looking to reduce the CO2 emissions generated by the electricity it consumed.
As eager as the 3PL was to upgrade to LED lighting, there was a hitch: Retrofitting a warehouse of such scale would involve significant capital expense. That’s where outsourcing came into the picture. By partnering with an outside party—in this case, an Irish startup called UrbanVolt—syncreon could avoid the upfront costs of buying and installing new high-efficiency fixtures and instead contract for lighting service on a pay-as-you-go basis.
GETTING THE LED IN
Founded in 2015, Dublin-based UrbanVolt is a B corp—meaning a for-profit company whose work benefits society at large—that helps the world’s largest energy users, such as warehouses and other large industrial facilities, “green” up their operations. Its programs include the “Light as a Service” offering, in which UrbanVolt outfits its customers’ facilities with LED lights at no charge to the user and then operates and maintains the systems for a specified term. The company, whose client list includes several U.S. operations, gets paid by sharing the savings on the customer’s energy bills.
But its value proposition doesn’t end there. To make the process as frictionless for clients as possible, UrbanVolt takes care of every aspect of the retrofit project from start to finish. That includes gathering site data and putting together a business case that includes the lighting design, equipment recommendations, and a forecast of the cost and environmental impact.
With the syncreon Niederaula project, there was one other requirement as well: The 3PL stipulated that the retrofit work had to be done without disrupting site operations. To accommodate its client’s request, UrbanVolt visited the site prior to the installation and created a 3D print of the light bracket so that it could manufacture custom fittings for the warehouse in advance—a step that resulted in a quicker, smoother installation.
Once the installation got under way in July 2019, UrbanVolt project-managed the retrofit of the entire premises, replacing a total of 1,181 fittings with 797 custom-made LED light fittings in just two weeks’ time. To minimize disruption, the installation team scheduled the work for nights and weekends.
BRIGHT LIGHTS, BIG SAVINGS
As for how it’s all working out, the initial reports are, well, glowing. By upgrading its warehouse to LED lighting, syncreon Niederaula is now seeing significantly improved light levels, with staff enjoying brighter and safer workspaces, according to the supplier.
But the real story is in the numbers. As a result of the retrofit, syncreon Niederaula has cut its energy consumption by 442,851 kWh annually, which amounts to an almost 70% reduction in the facility’s lighting energy spend. In UrbanVolt’s words, “this … reduction is great news for syncreon’s bottom line, future-proofing its business against Germany’s high electricity rates” as well as freeing up cash for other investments.
It’s also a big win from an environment standpoint. According to UrbanVolt, the annual CO2 reduction achieved by upgrading the facility to LED lighting is equivalent to the carbon sequestered—or absorbed—by 370 acres of mature forest in one year.
Gartner, Inc.