What is Lighting as a Service (LaaS)?
Why spend your capex budget on lighting when you can use it for something with better leverage? M&M Lighting offers a solution for companies looking to increase efficiencies that reduce overall energy consumption and eliminate maintenance. Our M&M Light Now Program, also referred to as “Lighting as a Service” (LaaS), is an all-inclusive service that allows businesses to obtain energy-efficient LED lighting and controls with no upfront capital.
Because the Program is a service agreement, it qualifies as an operating expense, not a capital expenditure amortized on your balance sheet. For a qualified LaaS program, cash flow is positive on day one since your energy savings cover the monthly payments for the Program. Those payments cover the cost of new LED lighting, installation, and all maintenance for the duration of the agreement.
How does Lighting as a Service (LaaS) work?
Lighting as a Service (LaaS) is a simple approach to converting your business to energy-efficient lighting technology without the complication of budget constraints. With the M&M Light Now Program, customers can implement turnkey LED lighting projects utilizing a subscription model that eliminates all upfront costs.
The M&M Light Now Program (Lighting as a Service) In Summary:
(1) We will install a new, energy-efficient LED lighting solution at no up-front capital cost. (2)The project is typically installed one to three months after the signed Program agreement. (3) M&M Lighting will maintain the lighting system over the life of the Program service agreement. (4) The monthly payment remains fixed for the duration of the Program service agreement.
An Immediate Upgrade
How is Lighting as a Service (LaaS) Different than Other Procurement Methods?
Here are three reasons this service is light years ahead:
It's NOT a Capital Expenditure
Capital Expenditures require the lighting to be paid for upfront. You do have complete ownership over the lighting system. However, any future service or maintenance beyond the initial manufacturer’s product warranty is up to you to take care of.
It's NOT a Loan or Lease Agreement
Loans and leases reduce the initial expense of new lighting upfront but it is still considered a capital expense. Besides the interest over the time of the loan, you’re responsible for ongoing service and maintenance beyond the initial manufacturer’s product warranty.
LaaS is a Service Agreement
A monthly payment that divides the cost of the lighting, installation, and ongoing maintenance over the term of the agreement. Because it’s defined as a service agreement, it’s designated as an operating expense and not a capital expense.
end-to-end services
What are the Benefits of Lighting as a Service?
To be the most comprehensive LED lighting company, M&M Lighting has implemented a full-service approach, offering an extensive arsenal of LED lighting solutions and end-to-end services. Below are a few benefits of having M&M Lighting upgrade your facilities’ lighting using our M&M Light Now Program.
Installation
All the energy-efficient LED luminaires in a custom solution are included in the agreement and require no capital expenditure by the Customer.
Zero Installation Costs
The entire turnkey installation costs are included in the Agreement and are the responsibility of M&M. The lighting upgrade will produce no negative impact on operational costs.
Zero Lighting Maintenance
Maintenance costs associated with the lighting are eliminated. All parts and labor are included in the coverage for the duration of the Program Agreement with no proration.
Immediate Savings on Day One
From the moment your new LED lights are turned on, your costs will be reduced enough to produce a positive cash flow – day one! The value of your property and your business just went up.
Improved Safety
With improved light levels and the elimination of maintenance, employees can be more productive by focusing on the task at hand and avoid hazards associated with poor visibility.
Environmentally Friendly
With energy-efficient LED lighting, businesses can reduce their carbon footprint and increase their focus on sustainability even more. LED technology can also indirectly benefit HVAC costs by reducing the heat previously generated by legacy lighting technology.
Protection Against Technology
M&M LIghting will install the advanced LED lighting technology. At the end of the Agreement, if desired and agreeable to both parties, upgrades can be completed where necessary to continue the ongoing savings and the Program extended.
Dedicated Project Management
As the single point of contact, the experienced M&M project management team will efficiently complete your lighting upgrade with little customer involvement and the assurance that all local, state, and federal requirements are followed.
FAQs
Have Questions? We Have Answers.
What is Lighting as a Service (LaaS)?
Lighting as a Service is an all-inclusive subscription model that allows business owners the ability to install energy-efficient LED lighting with no upfront capital. Monthly payments break up the cost of the new LED lighting, the installation, and the ongoing maintenance.
Because lighting as a service is defined as a service agreement, it’s designated as an operating expense and not a capital expense. Cash-flow is positive day one compared to other traditional procurement methods and the energy savings help pay for the program.
What is the process to implement Lighting as a Service (LaaS) for my business?
1) M&M Lighting will schedule an on-site audit to understand your lighting requirements.
2) Once the audit has been completed and some financial pre-requisites have been determined, a custom lighting solution is designed and a proposal will be generated.
3) After the Program service agreement has been agreed upon, M&M Lighting will install the new energy-efficient lighting system at no up-front capital cost.
4) The project is typically installed one to three months after the Program agreement is signed.
5) M&M Lighting will provide maintenance for the lighting system over the life of the Program service agreement.
6) The monthly payment remains fixed for the duration of the Program service agreement.
How do the monthly payments work and how is it billed?
Monthly payments will be automatically drafted on the same scheduled day each month via Automatic Clearing House (ACH). Payments will continue for the duration of the Program service agreement as defined in the legal terms.
What happens at the end of the service agreement?
There are three options at the end of your agreement:
1) The exisitng service agreement will auto-renew at the end of the agreement. Monthly payments and other terms are subject to change.
2) Enter into a new service agreement. We will determine current lighting requirements and recommend any technology changes (if necessary) to the existing lighting system.
3) Terminate the service agreement. We will choose to either remove the lighting system or abandon it in place.
Note: If the service agreement is terminated early, penalty charges will be incurred.
What happens if our company moves and we need to end the agreement early?
If your property is sold or the lease is ending, the service agreement can be transferred to the new owner with our approval. Alternatively, you can take the lighting system to the new location you’re moving to. If the service agreement is terminated early, then penalty charges will be incurred.
What if I want to change how my space is being utilized?
There are no restrictions on how you utilize your space. However, changing the layout of your space could affect lighting requriements beyond the original scope. The existing service agreement does not cover moving lights around in the facility to accomodate new lighting requirements. Please consult with your M&M Lighting representative for more details.
What if I want to add any additional facilities or technology?
Are you expanding to add more facilities? Are you wanting to include additional building technologies such as network lighting controls or electric vehicle chargers? Please consult with your M&M Lighting representative to add an addendum to the existing service agreement. Monthly payments are subject to change.
Who owns the LED lighting?
Our financing partner will hold the title and ownership of the lighting system during the service agreement term. A Uniform Commercial Code (UCC-1) financing statement may be filed on the lighting system itself, which serves as official public notice of claims of interest. All risk of ownership for the lighting system is transferred to our financing partner.
Can I designate the monthly payments as an operating expense?
What makes the Lighting as a Service (LaaS) agreement unique is the ability to designate it as an operating expense and not a capital expenditure. However, final accounting treatment is determined by the customer and not M&M Lighting.
Do I need to provide any insurance for the new LED lighting system?
Once the new lighting system has been installed, you’ll provide certificates for Business Property Coverage. This includes but not limited to: fire, theft, business interruption, extended coverage for the full replacement cost of the equipment (including installation), and business liability coverage. The legal terms of the service agreement will outline exactly what needs to be covered by the customer.
How do taxes work with this new service agreement?
Our finanicial partner will handle all the taxes on the service agreement plan for you. Sales tax may be due with each monthly payment, subject to state policy. The listed monthly payment(s) at the time of the service agreement proposal do not necessarily include sale tax.