Several macro level trends occurring across the globe will continue to fuel the growth of the retrofit industry for the foreseeable future, with lighting being a big part of the equation in making existing buildings as efficient as possible.
The first trend is the Global Sustainability movement. The United States federal government has stated that it wants to achieve a carbon pollution free power sector by 2035 and a net zero carbon emissions economy by no later than 2050. McKinsey and Company, one of the largest consulting companies in the world, has made the point that the U.S. can’t get to a net zero carbon emission economy through new construction as 80% of the buildings that will exist in 2050 have already been built.
The only way the country can achieve a net zero carbon emissions economy by 2050 is retrofitting existing buildings to make them as efficient as possible. As a result, major cities across the country are beginning to evaluate an individual building’s energy use intensity around greenhouse gas (GhG) emission levels on an annual basis. If the building does not meet the required GhG emission levels, then the city will impose a fine on that building owner.
The other macro trend is the country’s move toward electrification and the introduction of renewables into the power sector. Why this is important is because the U.S. grid is not currently equipped to handle the load if everything becomes electrified. In addition, renewables are a variable power source (the wind only provides power when the wind is blowing, and the sun only provides power when the sun is shining) rather than a steady state power source (traditional power plants can add and reduce power no matter the time of day or what is occurring externally).
How these macro trends tie into the retrofit market is that buildings will be required to become more dynamic in interacting with the grid through demand response. We will see more advanced control solutions -- that enable the lighting system to interact with the grid effectively and efficiently -- become a part of retrofit projects across the country. This is in addition to the overall push to maximize efficiency through the conversion of legacy light sources to LED.
What’s ahead?
Lighting retrofits will continue to drive the increased efficiency of buildings across the country as we move to a net zero carbon emissions economy by 2050. As more buildings move toward deep energy retrofits across multiple measures, we will likely see the introduction of new funding mechanisms and tools that allow building owners to continue to justify the upgrade in efficiency measures in their building.
A good example of this is the introduction of building performance standards across the country in major cities. The BPS that is furthest along is Local Law 97 in New York City. Local Law 97 has set carbon emission caps for energy use that took effect in 2024. If commercial buildings within the city do not meet the required levels by May 1, 2025, they will begin to receive fines from the city.
This is just the start of new funding mechanisms and tools, that we have never seen before in the retrofit market segment, which will allow building owners across the country continue to upgrade the systems within their building to be as efficient as possible.
How Acuity Brands can help
Acuity Brands is a market leader in smart lighting, controls and retrofit projects. For more information visit: Retrofit Lighting Solutions. I look forward to bringing you more topics to help you win more jobs and grow your business.
David Errigo, Director of Energy Solutions
