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Property Management Energy Savings Discussion Paper: Benefits and costs of LED Technologies

ASG Energy, LLC

ASG Energy, LLC is pleased to introduce our company capabilities.  ASG Energy, LLC’s mission and purpose is to design and integrate custom energy efficient solutions to provide the best ROI and payback for its clients.  We provide LED Lighting, Energy Design and Analysis Solutions and Implementation Services across the United States.  We both manufacture our own LED products as well as utilize products from leading manufacturers.  We work with strategic regional electrical contractors and national engineering firms to be able to offer a turn-key solution to allow building owners and developers to achieve reliable, efficient, and cost savings lighting solutions.  Whether it’s union labor, conventional labor, or your internal labor installation, we work with your unique situation to provide the best overall value for your project.

ASG is experienced in providing LED lighting solutions to manufacturing, office work spaces, and exterior lighting for commercial and government customers.  Configurations can include: high mast exterior lighting, street lighting, exterior building lighting, security lighting, high bay lighting, storage lighting, common area lighting, office area lighting, wet environment lighting, exterior lighting, design lighting, stage lighting and safety lighting.  ASG is experienced providing solutions to these diverse requirements.  ASG is also familiar with working within the utility rebate framework, helping our customer base gain approval for and receipt of lighting rebates to greatly enhance return on investment experiences for LED lighting programs. With expertise in engineering, light design, product design and installation ASG Energy can provide a full turnkey solution for our clients to maximize their returns.

There is a persistent myth in property management that LED conversions have no benefit in a triple net lease scenario.  We believe there are several benefits that can significantly impact the property owner even in the event of a triple net lease.  These benefits, while fewer in number than those to the tenant, still have significant impact on the property manager, helping to increase cash flow, reduce operating costs, and increase marketability of their properties.

Property Manager Triple Net Benefits from LED Conversion


  1. Common Areas are owned by the building- Typically street lighting, lobby and common areas are paid by the landlord and apportioned to the tenants.  This utility bill is owned by the manager so the credit for the savings and the cost is accumulated here.  Therefore the benefit to the tenants is lower pass through costs, the benefit to the owner is lower maintenance costs, as well as the Utility Rebate and credits which come directly to the owner.
  2. Reading and learning environment improvements – several studies have been published that support the fact that light levels from LED lighting are more conducive for both mood of individuals and reading and learning environments.  In an office setting this can equate to longer tenant occupancy, higher renewal rates and lower vacancies.  An environment that improved productivity is vital to tenant businesses and retail clients.
  3. Where and tear on existing A/C units – An LED gives off approx 80-90% less heat than a traditional fluorescent tube or an incandescent bulb.  This reduction in heat also equates to a reduction in air conditioning usage and costs.  By reducing the usage of the air conditioning units they can last longer, saving capital budget dollars for a replacement unit.  In new properties this reduction can equate to a lower tonnage unit, reducing load and saving investment dollars.
  4. Increased Market rents – Comparatively properties that have lower operating expenses are more attractive to tenants.  Advertising lower utility costs sets the property apart from the market and makes it more attractive to prospective tenants
  5. Valuation – LED investments have a much higher return as the operating costs are decreased and the revenues are constant, the bottom line is increased.  With standard valuations of property being 2-3 times cash flow, converting to LED has a benefit of 2-3 times its savings amount.
  6. Most property managers are also tenants – Most property managers have offices located in their property for both maintenance and their rental offices and property management funtions. Savings in these areas have a direct effect on the owners bottom line.
  7. Tax incentives for owners– Federal and State taxing authorities have several tax incentive programs available for energy efficiency upgrades.  These tax incentives are given directly to the owners and can shield income for the owner of the property.  In addition, classifying an LED project as a capital improvement will allow for depreciation deductions of up to 50% in the first year of installation and 1/5 each of the next 5 years following the project implementation.
  8. Tennant incentive- for landlords we can offer tenant incentives to encourage tenants to convert to LED lighting.  We do this through offering below retail pricing with an additional incentive to the owner (i.e. if 70% of the building converts we can complete the lobby at no cost to the owner, etc.)  This is a good way for the owner to increase the efficiency of their building, get the soft benefits including owner recognition of capital expense, or if not a capital expense tenants receive credit, and still achieve lower savings or maintenance for the owner.
  9. Financed Solution Option – Customizing a solution that allows the property manager to install lighting and pay through their savings is an off balance sheet activity for the owner, which allows them to increase market value, achieve the tax deductions each year for both interest paid, principal and the tax deduction for energy efficiency (explained below).  This incentive is a no-cash out of pocket, upgrade in equipment that adds value to the property, makes it more desirable to tenants, and its an operating expense which does not raise tenant monthly costs but lowers maintenance costs. Therefore its an incentive for everyone in the building.


All these benefits have the advantage of greatly increasing property value while decreasing costs and achieving utility credits and valuable tax shields against your income while improving your aesthetic, light levels and appearance.  These benefits are specific to the property owners and make an LED conversion the right choice regardless of whether you’re a triple net lease or a gross lease.  ASG has vast experience in helping clients not just read about these benefits but to actual experience them in their facilities and in their bottom lines

The ASG Difference – Customization, Prioritization, Elimination and Customer Service

Customization – In direct contrast to a lighting distributor that just fills orders, expecting the client to provide the information necessary to replace their bulbs, our team of designers will look at your installation and discuss ways that you can save additional dollars over standard replacements while still maintaining your buildings aesthetics.   Most buildings were designed by architects to achieve certain aesthetic elements for the owner or work flow for the tenants.  By analyzing the purpose of the installation we are able to keep or enhance these aesthetics for our clients.  This approach allows for additional cost savings above the basic savings involved in your conversion from traditional incandescent and fluorescents to LED.  An example is a standard 2×4 fixture can have 4 tubes and consume 220W of power.  The same LED retrofit can consume 54W and reduce the number of tubes needed.  In addition certain areas of a facility are over lite by code or design (i.e. emergency lighting, parking lot lighting), however this illumination is only required during times of traffic, or for aesthetic charm.  Using motion sensing LED tubes in garages and stair towers that dim to conserve power and illuminate in full under times of motion allows the client to experience additional savings over a standard conversion.

Your typical lighting distributor takes orders, ASG designs the lighting to match your needs, illuminating areas you need and reducing lighting in areas your don’t.  By working specifically with the client and custom designing a plan for we are able to take advantages of the best technologies, market expertise, and cost incentives.

Prioritization – (In Process) Complex organizations contain multiple lighting types and purposes as well as industry specific needs and vastly differing business models. ASG Energy staff personally work with your organization to help you determine what energy savings technologies and locations make sense for your organization and then prioritize a plan to meet your goals.    Lighting is a fundamental way to save energy, however by utilizing other attributes of the location like access to outside lighting, heating and cooling space and controls we can save more to invest in other energy technologies without requiring additional funds.

At ASG Energy we survey your location, talk to staff and obtain utility and usage data.  We use that information to prioritize an energy solution that works for your budget.  We break down your usage patterns and identify high traffic areas, architectural elements and business needs and lighting purpose.  We then prioritize those needs to develop a solution that re-purposes your savings to make your capital go further.    By looking at a client’s installation and staging projects based on key area characteristics (i.e. operating hours, power consumption, federal and local utility rebate and credit availability, etc.) we can develop a plan with our clients to not only meet their immediate energy reduction goals but also structure them for success towards larger future initiatives.

When dealing with a lighting distributor or supply house the main concern can be their product line and what they carry.  Common recommendations steer clients towards high margin products and high volume areas of the facilities.  This can hurt the client when not prioritized properly.  An example of this behavior is when a client is recommended to complete an exterior because the wattages on the fixtures are greater.  While this is true and our energy savings per watt is high, the interior may be where the utility company wants companies to focus and therefore are incentivizing with higher paying rebates for these areas.  Taking advantage of these savings could have a quicker payback, allowing the client to do both projects with the same investment capital and taking advantage of monies offered by the federal government and the local utility companies.   This may not be beneficial to the distributor who has mainly exterior products.  While it seems like the client is being helped, the reality is they are paying more out of pocket then necessary and losing valuable return.

Prioritization – (In delivery)

ASG Energy’s enhanced delivery solution for large project and new construction lighting involves a compartmentalized logical delivery structure and Just in Time response solution that combines the project implementation benefits of specifically configured packaging and just in time arrival.  This model enhances our customer’s large retrofit and new construction projects by ensuring that products are where they need to be, when they need to be, in a logical and intuitive installation package.

The ASG Energy project team works hand in hand with our customers throughout the entire project lifecycle from the product specification and selection phases through to delivery and installation.  We work to ensure that after an optimal lighting package is selected, that the delivery model implemented provides the overall lowest installation to the customer by providing products that are pre-packaged and logically organized for quick assembly and installation.

Our delivery model process begins upon selection of the specific fixtures and solutions.

  • We apply a Just In Time manufacturing and logistics process that coordinates our approach with the customers overall construction and program management plan.
  • Our products are then staged for site delivery to coincide with when and where they are needed during the construction process.  This allows our customers to achieve the lowest production costs possible as we eliminate waste and cost associated with long term warehousing.
  • Our lighting products are physically grouped in logical packages to coincide with customer project plans and schedules.  Room or area lighting is wrapped together and labeled which enables ease of placement for installation.  Each room or area package contains the necessary lighting to complete the installation of that particular area.
  • These lighting packages are staged within CONEX containers and delivered to the worksite in agreed upon locations at agreed upon times.

We have found that this process allows us to deliver the lighting that is needed when it is needed in logically configured packages to the worksite expediting installation, de-cluttering the worksite, reducing waste through lighting product damage, and ensures that we deliver the correct product and quantities to the worksite.

Elimination– At ASG Energy our goal is to reduce client costs and improve ROI.  We look at every possible facet of the project to determine how to achieve the overall best value.  In order to do this we constantly focus on ways to eliminate waste from our projects.

  1. We focus on projects, not distribution. Making products that are built for our clients, not to sit on a shelf.
  2. We manufacturer our own products which helps reduce costs associated with secondary distribution.
  3. We utilize JIT manufacturing to reduce lead times, eliminate waste from overhead and eliminate the need for storage and warehousing costs.
  4. We possess direct agreements with other manufacturers for our projects, allowing us to avoid going through distribution channels and getting unnecessary mark-ups
  5. We have installation agreements with union and non-union labor in areas we do projects in, these set rates allow us to provide our labor with steady work and our client with discounted rates
  6. We work specifically with utility companies to understand the rebate process, streamline the paperwork and get the rebate to our clients quicker.
  7. We employ our project managers to facility schedules, delivery times and manage the project to make sure the client knows what to expect and when to expect it.

Elimination of costs and enhancement of project management to reduce production costs and lead times provides a better ROI for our projects and a better experience for our clients

Customer Service – ASG Energy staff are hands on from the survey process through the product specification, implementation and support.  Our sales and technical team members are equipped to help clients with identifying their lighting needs, analyzing their facility costs, managing their implementation and supporting them when the project is finished.  ASG Energy is not your lighting supplier, we are your lighting partner, there to help you and your organization with all your lighting needs before, during, and after your project is complete.  All of the products we offer are warrantied up to 5 years and support is provided by our team throughout the life of your warranty.

Contact ASG Energy to find out how your property can take advantage of these benefits and receive a free lighting survey for your property to see what economic benefits are available.

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