ENERGY, CARBON & CLIMATE CHANGE, RETAIL Retailers switching the lights
Over the past year, research has been undertaken by the British Retail Consortium to understand what the role of LED lighting could be in driving energy efficiency in retail, one of the most energy-intensive industries in the UK. The research formed part of a Green Construction Board project and the British Retail Consortium worked within a group also involving the Department for Business Innovation & Skills, the Lighting Industry Association, the Chief Construction Advisor, the British Council of Shopping Centres, Sainsbury’s, Marks and Spencer, Philips, and the Retail Energy Forum. The group set out to find out what retailers had been doing already as well as what the benefits and challenges were in switching to LED lighting.
nergy is a key strategic issue for the retail industry today and the research suggests that those retailers that are acting on energy efficiency now will be better able to manage the impact of rising energy costs in the future. Energy is a significant operational cost for UK retailers, so energy efficiency represents a huge opportunity to maximise profitability for the long term as well as achieving social and environmental goals.
Some key statistics on energy in retail
• Retail is the second highest energy consuming industry in the UK;
• Cost of energy to retail in 2013 was £3.3bn – expected to rise to at least £4.4bn by 2020;
• Electricity accounts for approximately 77% of total energy consumption and 90% of overall energy costs;
• Lighting in 2013 used 43% of total electricity, by far the leading source of energy consumption;
• Carbon from retail energy in 2013 was 16 MtCO2
businesses in the UK. 21.6%
Energy consumption in retail 1.7%
e, a fifth of emissions from all switching to LED lighting; of up to 2.48 MtCO2
• LED offers a better consumer environment and enhances product display resulting in increased sales and improved staff wellbeing;
• Innovation in LED lighting has led to much greater flexibility in design and is enabling bespoke design at much lower costs;
Electricity Natural Gas Oil
Under the Switch the Lights Campaign the group found that Lighting was the highest source of energy use for the retail industry and represented an important opportunity in delivering energy efficiency. Their analysis demonstrated a number of findings that show the benefits that switching to LED lighting in a retail setting can bring:
• Typical savings were around 40% but up to 60% energy reduction could be achieved through switching to LED;
• Retailers could save up to £500m in energy costs and deliver carbon savings
• New LED products support other services in the building, unlocking better store management and helping to streamline maintenance.
So why haven’t retailers rolled out LED across their whole estate?
Although the benefits of LED lighting in retail look fantastic there are a number of very difficult challenges that retailers are facing in making the change to LED. What is well understood is that the capital costs associated with moving to LED lighting, especially in leading retail businesses is a huge blockage. The investment required to completely change the lighting across hundreds of retail stores is very high and the availability of this level of capital is constrained in the current challenging economy. This is especially true in businesses that have already been investing in energy efficient lighting.
There are other financial constraints that retailers face that may also be issues
Innovation & Research Focus Issue 102 AUGUST 2015 e per year through
for other industries. Through working with retailers the group found that the technology write off cost was a significant barrier to investment and was slowing investment in LED. Where retailers have historically been investing in energy efficiency, lighting in many cases had already received significant investment over the last 10 to 15 years, moving from high energy use lighting such as halogen to higher-efficiency T5 and T8 lighting systems. Incumbent lighting systems will have a lifetime which would have been factored into the initial investment so, if you are investing in even more efficient lighting part way through a technology’s’ lifetime, there will be a loss of value associated to removing technology prior to its end of life – a double whammy of costs to your rate of return of investment.
Another very difficult barrier to overcome is that many retail designers are still wary of using LED lighting in their store designs. When LED lighting technology initially hit the market in the late 1990s it did not deliver on lighting levels or colour. Many early adopters of LED in retail were finding that it was changing the colours of products on sale and as a result were seeing returns of goods on the basis that they were a different colour when at home. Similarly supermarkets were finding that it would make food look grey and dull and not particularly healthy. LED technology has moved on
| Page 2
| Page 3
| Page 4
| Page 5
| Page 6
| Page 7
| Page 8