John Maneri, CEO and co-founder of Maneri-Agraz, came to the lighting industry through the back door. In the late 1980s, recently laid off by Marriott’s architecture and construction division, he was adrift in Providence, Rhode Island, trying to find work. Eventually, he landed a job managing a ragtag band of light bulb changers, who, on behalf of a state-level efficiency organization, swapped out 40-watt fluorescent lamps for free 34-watt, energy-saving lamps. It was the dawn of energy-efficient lighting, and Maneri threw himself into the job without the foggiest notion of where it would lead.
Just five years later, Honeywell found him and moved him to Houston to start a national lighting business. He hired Frank Agraz, a whip-smart lighting guru, as his right hand man. “He is, I would say, one of the preeminent lighting pros in the country, bar none,” Maneri says.
He and Agraz did well at Honeywell, but they weren’t getting paid what they thought was fair. So they moved on to Aqualine Resources in 2000, launching an industrial lighting division for the now-bankrupt water conservation company. By 2007, the water business was sputtering. “We saw the writing on the wall; we had enough leverage to secure an exit agreement to get out of our non-competes. We couldn’t take employees or customers for 18 months, with one exception,” says Maneri, laughing dryly. “We formed Maneri-Agraz, with one account, PepsiCo.”
Needless to say, it was a major coup. “In addition to giving us projects with Tropicana, Gatorade, and Quaker Oats, it really launched us with capital and references,” Maneri says. “We could tell any client we did a few million dollars of work for Pepsi, and say, ‘Give them a call and see how they like us.’ Our ability to sell off of these early projects was huge in getting the attention of National Oilwell Varco, and any other large manufacturer we’ve attracted.”
Today, with just 17 employees, Maneri-Agraz is one of the fastest growing lighting brands in the country. The Houston-based company specializes in energy efficient lighting upgrades and new construction specifications for industrial and commercial workspaces. Among their recent accomplishments: making Inc. Magazine’s list of 500 fastest growing companies in 2012 and 2013, seeing an increase of 289% in sales across the last three years, and being asked to write the lighting standards of two of the world’s largest food and beverage manufacturers, Frito-Lay and Kellogg, according to Maneri.
Interestingly, Maneri-Agraz does not make anything, nor are they a vendor or distributor. What they do, Maneri says, in the manner of a turnkey provider, is educate their customers on ways they can improve light quality, cut costs, and use less energy in their facilities. For qualifying projects— typically those in which the client stands to recover up-front costs in 2-3 years (requisite among many Fortune 100 companies)— Maneri-Agraz put these recommendations into action. Depending on the project, this might mean installing light-emitting diodes (LEDs), or other modern, low-wattage luminaires, eliminating unnecessary fixtures, reconfiguring how and when light is used in a space, while capturing utility rebates and federal tax deductions. Often, it means all of the above.
MORE LIGHT, LESS ENERGY
HIGH-EFFICIENCY LED RETROFIT ANNUALLY SAVES FRUIT JUICE BOTTLER CLEMENT PAPPAS $37,092 IN ENERGY AND MAINTENANCE COSTS ON A $109,791 INVESTMENT, USING LESS THAN A QUARTER OF THE ENERGY TO IMPROVE LIGHT LEVELS AND QUALITY AT ITS HENDERSONVILLE, NORTH CAROLINA FACILITIES
A retrofit of the outdated lighting systems of a Clement Pappas production and warehousing facility in Hendersonville, North Carolina offers a glimpse of the energy and cost savings that come from Maneri- Agraz’s approach.
Clement Pappas brings private label juices and cranberry sauce to markets across the country, says George Oughterson, the 61-year-old manager of accounting for all of Clement Pappas manufacturing plants. This involves many steps: the company imports juices from around the world, reconstitutes them from dry ingredients, adds sweeteners, bottles them, and then sends them off to big-name retailers and grocery stores: Walmart, Costco, and Target, among others. Oughterson sought a way to cut energy costs. “These facilities have old lighting technology that uses a lot of electricity to generate light. We saw an opportunity, with the price of utilities, to help keep prices down. When I saw we could do this with a 2-4 year payback and 10-year warranty, it was a no brainer,” Oughterson says.
The project began in May 2015 after Clement Pappas’ energy consultant, Schneider Electric, presented Oughterson a summary of potential utility savings from a lighting upgrade and recommended Maneri-Agraz as the best industrial lighting provider. Oughterson contacted Maneri-Agraz’s vice president of national sales, James Wheaton, and got the ball rolling.
Next, Maneri visited the facility to conduct an investment-grade assessment, says Roger Cantu, Maneri-Agraz vice president of operations. In the first warehouse, Maneri found a dense mix of eight-foot-long T8 and T12 linear fluorescent luminaires. In the second, an unoccupied space lit by 400-watt HID high bays. Aside from being inefficient and antiquated, the lighting systems simply weren’t producing enough light. “There were a large amount of fixtures pulling a lot of power and not meeting the needs of the space,” Cantu says.
Using CAD-based light-rendering software, Maneri formulated a proposal based on lighting needs, space, and hours of operations, Cantu says. The proposal included several options for the upgrade, from low-cost retrofits to an entire redesign. “We all do assessments here. We listen to the customer and what their needs are,” Cantu says. “We don’t try to oversell them; they put a trust in us to know what we’re doing, and we give them the best solution for their need at a g reat payback.”
In one warehouse, that best solution was a design t hat cut the number of f ixtures nearly in half, requiring minimal re-wiring and the installation of new LED luminaires. In the second warehouse, Maneri-Agraz upgraded the entire high bay system to high-efficiency, long-life LED luminaires with extended warranties.
Ultimately, the cost and pricing structure of the proposal—$109,791 after $44,080 was captured through a utility rebate from Duke Energy—was a major selling point for Clement Pappas. Not only was the price competitive with other proposals for the same scope of work, Oughterson says, but the rebate was guaranteed as part of the proposal. “Several things came into play, pricing was right up front, the complete project price. A lot of times there are additional extras,” Oughterson says. “Here there were no additional charges. They said, ‘This is the price.’ They guaranteed the price, and estimated the rebate from the power company.”
A four-man crew installed the system in seven days in mid-August 2015, and Blake Kehoe, 56-year-old director of engineering for Clement Pappas, says the process was uncharacteristically seamless. “I’ve got to say, they have some very professional installers. Normally, if I get a group in here, there’s a lot of interaction between myself, the manager, employees, and the would-be contractor. They went over it, said, ‘Hey these people are going to be in here,’ and basically did the project without interruption to operation. They were able to work side by side with our employees with no problems at all,” Kehoe says.
Each LED high bay is equipped with a sensor that controls light output based on occupancy and daylight, Cantu says. If no one is in the space or if there’s enough daylight available, then the lights dim and turn off. They are individually controlled and can be set to unique dimming profiles with a remote control. “What is neat is that the light will be off, and then the lights come on completely as you pass,” Oughterson says.
A Maneri-Agraz energy and cost analysis of the project reveals a reduction in the connected load from roughly 89 kilowatts (kW) to 34 kW and an annual drop in kilowatt-hours (kWh)—the derived energy units, based on power and time of use, for which a company is assessed on their utility bill —from 776,986 to 192,315. Lighting efficiency was key to the savings: in short, producing more light with less energy. All told, the retrofit has led to $33,092 in annual energy savings, $4,000 in annual maintenance savings, and a 2.3 year simple payback. “The project dramatically reduced the lighting load and increased foot-candles—a measurement we use in the industry to determine how much light or lumens are coming out of a fixture at the task area,” Cantu says.
Oughterson says he is pleased not only with the energy and cost savings, but also what the enhanced light quality has meant to the employees inside the facilities. “It’s been an incredible improvement. Before, we had dark spaces where we didn’t get a bath of lighting,” he says. “This lighting is brighter, clearer, and there are no dark spaces in the facility. We’ve had a lot of comments from visitors and employees about how much better the lighting is. I think it’s certainly helped with morale, and there’s definitely been an improvement in productivity.”
In another sign of Oughterson’s satisfaction with the project, he came back to Maneri-Agraz, requesting lighting retrofits of Clement Pappas’ Seabrook, New Jersey and Ontario, California facilities. Both projects have gone under contract. “Those things unrolled very quickly: Ontario, California is completed, and Frank recently went to Seabrook, New Jersey, to audit a facility there to begin phase two,” Cantu says. “As the customer said, they were very satisfied with our solution and that led to more work.”
SEEING IS BELIEVING
MANERI-AGRAZ USES A RIGOROUS PROCESS OF ASSESSING EXISTING TECHNOLOGY, HOURS OF OPERATION, INFRASTRUCTURE, AND LIGHTING LEVELS TO MAXIMIZE SAVINGS
For Maneri, service is what sets Maneri- Agraz apart in a crowded lighting industry. Prior to a retrofit, he says, a Maneri-Agraz lighting certified (LC) practitioner meets with the client and conducts a formal site evaluation. Using proprietary link software, accessible by a tablet, the existing lighting system is assessed across a wide range of factors.
Retrofitting a 500,000 square foot facility, a quality installation takes about 3-4 weeks without shutting down production, Maneri says. Custom lighting designs focused on minimizing energy use and ongoing maintenance costs are installed by trained crews. Materials are sourced from preferred original equipment manufacturers (OEMs) and drop-shipped directly to the job site.
Maneri credits this “turnkey” design-build approach with helping to earn the trust and repeat business of clients. “It’s about doing what you say you’re going to do, something that’s been instilled in our guiding principles and the culture of the company since way back when,” he says. “There are not a lot of contractors who do that anymore. We satisfy clients no matter the cost. We don’t pinch pennies.”
But they do find pennies—quite a lot of them. Maneri-Agraz handles incentive discovery for its clients, determining applicable utility rebates and federal tax deductions through the Energy Policy Act of 2015 (EPAct) and guaranteeing the kilowatt reduction and rebate estimates built into their proposals. If the rebates don’t come through, Maneri-Agraz eats the cost. “Sometimes we take it in the shorts, but it comes back three fold. We handle everything, so the client doesn’t have to do anything,” Maneri says. “In fact, we design projects to maximize federal EPAct tax benefits, which is key; if you don’t design a system properly, you get shortchanged on the deduction.”
So how much does a company save through a Maneri-Agraz retrofit? A recent lighting project for the Houston-based National Oilwell Varco, for example, across five facilities, yielded $600,000 in annual energy cost savings and another $400,000 in cost offsets through rebates. By replacing high-intensity discharge (HID) fixtures with high-efficiency linear fluorescent, Maneri- Agraz reduced the facilities’ connected load by more than 50%. In addition to on-peak kW savings, occupancy sensors reduced the amount of time the lights were actually turned on, Maneri says, leading to a nearly 70% usage reduction.
Although Maneri-Agraz doesn’t actually make anything, R&D has been crucial to growing their client portfolio, Maneri says. In a workshop in their Houston headquarters, the Maneri-Agraz team vets new products, using tools such as a spectrometer and CAD-like photometric software to test light distribution, light levels, and other performance and compatibility aspects against manufacturers’ claims, which Maneri insists are sometimes misleading. Through a near continuous feedback loop between Maneri-Agraz and their manufacturing partners—Maneri is not giving away names— they’ve helped bring several ready-to-install retrofit kits to market.
“We want products you can take out of box, ready to hang,” Maneri says, noting that the company works with manufacturers to deliver products in such a fashion that they can easily remove them from the packaging and go straight to installation with little prep work. For example, if the application is a “cord and plug,” then they want the right plug already attached to the cord. “On a typical project, 60-70% is materials, the rest in labor. On a million-dollar project, that’s a lot of money. If we can design luminaires and retrofit kits that are as labor-friendly as possible, the overall price to customer is going to go down and their return on investment is going to go up. As a result, there’s a much better chance the project will pass their hurdle rate.”
Inside its clients’ facilities, typically large industrial warehouses populated by forklifts and machine assemblies, Maneri-Agraz has propelled a progressive shift, over the last decade, from metal halide lamps to linear fluorescent lamps to LED arrays. Compared to gas-filled and fluorescent lights, LEDs offer a significantly greater light output to energy consumption ratio (lumens per watt), but it is cost that is driving the LED wave. In the last three years, Maneri estimates that LED costs have come down 50-60%, while dramatically increasing in efficiency and radiance (130-170 lumens per watt compared to 70-80 lumens per watt—or 10 lumens per watt for your average 60 watt incandescent).
In fact, just as LED performance has improved, costs have come down so predictably, year after year, that there is a mathematical theorem to describe the phenomenon, Agraz says. Haitz’s Law, analogous in some ways to Moore’s Law (the observation that computer processing power doubles approximately every two years), states that every decade the amount of light generated by LEDs increases by a factor of 20, while the cost per lumen falls by a factor of 10.
LEDs are, of course, just the tip of the iceberg when it comes to lighting innovation. Solid state lighting (SSL) capabilities ranging from task-tuned dimmers to wireless ceiling and fixture controls have become so powerful a tool for energy reduction that they have altered the methods companies use to assess their investments in lighting retrofits, Agraz says. “The financial benchmark has moved from a first-cost analysis to a long-term analysis,” he continues. “We talk less about the simple payback method and, instead, highlight the total cost of ownership. Through that lens, with energy, maintenance, and interactive HVAC considered, LED is hands-down the winner.
In Maneri-Agraz’s retrofit of NASA’s Johnson Space Center offices, the improved efficiency of the lights delivered a 30% kilowatt reduction; dimming them through a custom wireless system led to 35% energy savings on top of that, Maneri says. “Each luminaire is adjustable and controllable on its own; they have a node in them that goes back to a server, and they are controlled by zone or individually. Through task tuning, we started dimming them a little every day to see how far we could go. Eventually, one woman cried, ‘Hey it’s dark.’ We went into comp u te r program to find the light fixture over her desk, and turned it up. No else complained. We thought it was awesome,” Maneri says.
One might think dimming lights would lead to a darker workplace with more risk for eye strain. Not so, says Agraz. “In the ‘70s, energy consumption was not on anyone’s mind, and there was too much light to begin with. We’ve tweaked it to appropriate levels. A typical office employee works in an environment with illuminated screens. We have to take into account the glare and the task being performed. Light recommendations in the ‘70s, ‘80s, and ‘90s—even 12 years ago—were a little different than today’s. A quality light source at lower illuminance values is appropriate to how we use the space,” Agraz says.
Still, with energy rebates shrinking and the price of electricity on the rise, there is reason to believe the industry is on the cusp of another revolution, Agraz says, this one driven by research into human centric lighting. “The beautiful part of the industry is it is still evolving. How does light affect vision, hormones, circadian rhythms, sleep? How does it generate vitamin D in our bodies and affect so many other systems? We’ve taken the watts-per-square-foot down so far. Once LED has permeated the industry, the next innovation will have to go beyond energy savings because saving 50% of nearly zero won’t deliver the ROI that clients expect,” he says.
“What if I were to tell you, using the right type of LED lights, installed in a nursing station or hallway, I could reduce the amount of errors on the third shift when nurses were giving medicine to patients? Or I could reduce the length of a hospital stay from three days to two? Productivity is a thing we haven’t been able to put our finger on. Human-centric lighting is trying to answer that in a way that can be replicated and used as easily as a ruler is used.”
SHOWING THE MONEY
FRANK AGRAZ, CO-FOUNDER AND PRINCIPAL LIGHTING PRACTITIONER OF MANERI-AGRAZ, EXPLAINS SIMPLE PAYBACK, UTILITY REBATES, THE ENERGY POLICY ACT OF 2015, AND MORE
Agraz, as you might have guessed, is something of a lighting guru. He has worked in the energy efficient lighting industry for 23 years. As co-founder and principal lighting practitioner of Maneri-Agraz, he works primarily with Fortune 500 clients in developing projects that deliver appropriate light levels and meet financial hurdle rates. The technical yin to Maneri’s business-minded yang, he has been Lighting Certified by the National Council on Qualifications for the Lighting Professions since 2000 and is currently the District 4 Chair of the Illuminating Engineering Society. We spoke with him about making the business case for an investment in energy-efficient lighting.
gb&d: When it comes to energy reduction and cost effectiveness, what do you see as the biggest change that has emerged in the lighting industry in the last 5 years?
Agraz: LED is the big elephant in the room answer. And with LED comes the ability to task tune, cost effectively. Task tuning is the ability to take a dimmable system and tune it down without a dial. By doing that to a specific room, fixture, or zone, you can customize the light level and energy consumption based on the task being performed. Dimming has existed for a very long time, but with linear fluorescents, it was very expensive and, certainly, you would not retrofit with dimmers, unless simple payback wasn’t an issue. Now, you have dimming as a cost-effective option when designing a lighting retrofit.
gb&d: Okay, so what does it cost to retrofit a facility like some of those you’ve upgraded—NASA’s Johnson Space Center, Pepsi’s research and development facility in Valhalla, New York, and Tropicana’s manufacturing facilities in Florida and New Jersey? What kind of energy savings and ROI can a company expect on that kind of investment?
Agraz: For a typical industrial facility, operating 24 hours a day at a decent utility rate, a good lighting partner who understands all the metrics and can capture utility rebates and EPAct tax deductions, can design a project in the two- to three-year simple payback range. So on a $100,000 investment, you’ll get your money back in two-to three-years. That’s the place where most Fortune 500 companies want to be.
Then there’s another question: what’s the cost not to retrofit? We refer to it as “the cost of waiting”. Calling a contractor, going through a proposal process that takes literally three weeks to three months. What is one month of energy savings worth? Say it’s $30,000-50,000. Add on the procurement and RFP costs, and you’ve dwindled away $100,000 to save 2% on a bid. Plus, energy rebates are getting lower every year, and the cost of electricity is on the rise. The cost of waiting is the invisible killer.
gb&d: According to the U.S. Department of Energy, solid-state lighting (SSL) has the potential to reduce U.S. lighting energy usage by nearly one half and contribute significantly to our nation’s climate change approach. What makes solid-state lighting so energy efficient and where do you see its greatest potential?
Agraz: SSL technology moves away from the traditional gas-filled light sources that use mercury and other heavy metals. The way LED generates light allows for higher efficacy, lumens per watt, and better light distribution. That is, we can place light exactly where we want and minimize waste.
Whether inorganic LED for ambient lighting, organic LED (OLED) for architectural and decorative lighting, or blue-laser LED for automotive solutions—like some recent BMW and Audi headlamps, I see SSL dominating every vertical market and application; it’s already started.
gb&d: Apart from energy and cost savings, are there other benefits to renovating a facility with modern lighting innovations, such as maintenance benefits, and warranty protection?
Agraz: Today’s lighting technology provides benefits that can be easily quantified and turned into dollars in a way that is easy to show to the customer. Others are more difficult to pinpoint. For example, one study shows reduced absenteeism in office environments with better light; people enjoy working there. In an industrial environment, light uniformity might reduce errors at an inspection station; in a warehouse, less glare can improve the rate of picking and stocking inventory. Many of these ideas are discussed in a field of study called human-centric lighting.
On the warranty side, the long life of LEDs has moved the typical window from 2-4 years to 5-10 years. Then there’s ‘the Internet of Things.’ What we’re finding now is companies never in the lighting business are now getting in. Cisco, Toshiba, LG, Google. Lights are being integrated with security systems, Wi-Fi, and indoor GPS tracking.
gb&d: All this sounds encouraging, but what are the downside risks of moving to LEDs? What should professionals be aware of before moving ahead with a retrofit?
Agraz: When the industry moved to LEDs, we changed the basic definition of certain attributes of lighting. As new definitions arise, manufacturers are coming out of the woodwork. We see specifications sheets with clumsy data. Ratings for heat, Ingress Protection, and light levels may or may not hold up to the environment, and it’s up to consumers to sift through data to find out what’s real.
The first question to ask is, ‘Who’s backing the warranty?’ That means doing your due diligence on the original equipment manufacturer (OEM). Are they a start-up with a small garage? Or are they backed by a billion-dollar conglomerate? When you’re not going with a 100-year-old company, Phillips, General Electric, Sylvania, but ‘ABC Lighting’ who happens to make LEDs, you need to be careful. You don’t want to align yourself with products from a manufacturer who may not be around to honor the warranty.
gb&d: The Energy Policy Act of 2015 (EPAct) provides an interior lighting tax deduction—up to $0.60/square foot and not exceeding the costs incurred for the energy efficient interior lighting system—for commercial buildings. How can companies capitalize on this program?
Agraz: Until December 2015, we were living in a world in which EPAct had fizzled out. Then, after a year of not being able to take advantage of the program, Congress signed and passed a bill that resurrected EPAct from the dead. Now, you can secure EPAct incentives by retroactively certifying projects already installed in 2015 or certifying new 2016 projects; the Act will expire at the end of the year. One key is to work with a lighting partner who fully understands how to design a retrofit solution that maximizes the deduction. We offer EPAct administration services to customers for free as a value-added incentive. If you go with us, we’ll max out the deduction.
gb&d: There are a number of other ways companies can save money with a lighting retrofit, right? Most utility companies are under pressure from their local Public Utility Commissions to reduce their peak demand, by offering “rebates” or incentives for large businesses that install energy efficient lighting products. How can companies capture these rebates?
Agraz: Many utilities and some state programs offer incentives to offset the initial cost of a lighting upgrade. There are several types of programs: prescriptive, unit-by-unit rebates, or custom incentives based on kilowatt-hours—how much energy you are actually saving. All of this gets really hairy, which is why we put these details in our proposals. What a lot of people don’t know is there are also rebates for new construction. We’re often the one to tell the customer, ‘Hey there’s a new construction rebate available for this project.’ Not only do we present a free bag of rebate money, but we also work with our customers to improve their baseline specifications by recommending higher efficacy products at a lower price.
Another factor to keep in mind is the DesignLights Consortium’s Qualified Products List. Think of the DLC like a consumer reporting agency for LEDs. The bottom line is if you want rebate money for LED products, many utilities require that they must be on the DLC’s list.
gb&d: So what’s the upshot of all this? In a lighting retrofit, what are three specific actions builders, owners, and sustainability professionals can take to improve the energy performance of their facilities and achieve cost savings?
Agraz: There are two main ways to save energy: reduce the connected load or reduce the usage. If you can do both at same time, that’s when you get some really healthy dollar savings. Start by increasing the efficacy, or lumens per watt, of each luminaire. Next, decrease usage by installing variable controls: motion sensors, photo cells, task tuners. Finally, it’s important to design the lighting system based on today’s need. Look at how a space is being used and redesign the lighting system according to the return on investment. In short, give the user more control over their own light use.