What is Lighting as a Service (LaaS)

Horace He

Last Updated: August 7, 2023

What is Lighting as a Service (LaaS)

Lighting as a Service (LaaS) is a business model that offers a comprehensive solution for customers to upgrade their lighting systems without the need for upfront capital costs. LaaS involves a service contract between a lighting provider and a customer, where the provider takes care of the planning, design, purchase, and installation of energy-efficient lighting systems and controls.

The main objective of LaaS is to overcome the financial barrier associated with lighting upgrades, especially for large spaces. By spreading the cost of the installation over the duration of the contract, customers can benefit from the energy savings generated by the new lighting systems. These savings are typically shared between the lighting provider and the customer.

Under a LaaS agreement, the lighting provider not only installs the new lighting but also takes responsibility for ongoing maintenance and potential future upgrades. This includes the management and optimization of the lighting system’s performance through real-time metering and measurement practices.

One of the key advantages of LaaS is its ability to make the lighting upgrade “cash-flow positive” from the beginning. This means that the energy savings achieved through the implementation of energy-efficient technology can be sufficient to cover the monthly cost of the LaaS contract, resulting in immediate financial benefits for the customer.