We will likely witness a series of acquisitions in the world of lighting networks very soon.
In the last several weeks, we’ve seen a series of acquisitions in building management. Honeywell bought Akuacom and E-Mon. Siemens bought SureGrid and SiteControls. Even drywall and window maker Serious Materials got into the act by buying Valence Energy.
All of these acquired companies, however, concentrate on controlling heating and air conditioning. Lighting uses nearly as much power in commercial buildings: 32 percent goes to heating, air conditioning and ventilation while 25 percent goes to lighting, according to the DOE’s Buildings Energy Data Book. A total of $58 billion gets spent to light homes, factories, streets and offices in the U.S. every year, according to statistics from Cannacord.
Perhaps even more importantly, lighting systems are largely uncontrolled, providing massive opportunity for any would-be acquirer. Only a small percentage of lights are on networks and, typically, the networks can only command the lights to flip on or off, not to dim.
“It is like slamming your accelerator to the floor and running flat out until you exit the car,” said Peter Schwartz, vice president at business development at Lumenergi, which has created dimming and networking technology for fluorescent lights. “This is the largest, last untapped end-use in buildings.”
There has also been a weird amount of recent activity in this space. I’ve met with a number of the companies on this list in the past few weeks alone. Something is up. GreenBuild starts November 17. Keep your eyes peeled.
So how do you rate them? The first thing to note is the similarities. All of these companies essentially:
1) Can reduce power dedicated to lights by 20 percent up to 80 percent through dimming, sunlight harvesting and/or remote on/off capabilities. Indirectly, air conditioning bills also decline because of the lower levels of ambient heat. (Take $1 per square foot per year for unmanaged light in offices as a baseline.)
2. Comply with the basic industry standards and are compatible with the building control systems from Honeywell, Johnson Controls and others. They also can link to demand response systems.
3. Can actually deliver more light than in the past with fewer fixtures. It’s a matter of strategically thinking about fixtures, controls and human behavior. Field data can also be used to optimize overall energy efficiency because light tracks traffic and human activity quite accurately.
4. Cover some of the costs through utility rebates and demand response fees.
1. LED or not? While some companies focus on the new wave of lights, others have created dimmers that work with traditional bulbs like fluorescents, as well as with solid state lighting.
2. Home, office or factory? Different bulbs, different networks.
3. How much retrofitting is necessary? Is it a software-only upgrade? New ballasts added to every light fixture? A rewiring job? The less extensive, the better.
4. Wireless or wired? Many say they are agnostic when it comes to communications protocols. In other situations, the networking layer becomes a selling point.
Disclosure: we don’t know of any ongoing acquisition talks. The following is really just a list of what makes each company attractive, or less attractive.
Lumenergi. The Newark, Ca.-based company has come up with a networking and dimming system for tube fluorescents, the standard in U.S. commercial office buildings. The retrofit is relatively light. It primarily involves swapping out a traditional ballast -- a box holding a hunk of iron that transforms electricity into a magnetic field to excite a gas plasma inside the fluorescent tube -- for Lumenergi's electronic one and installing Lumenergi’s networking management tools and software.
Much of the intelligence takes place within the light fixture. The technology supports DALI (a networking protocol popular in Europe), power line, and others, and will likely support ZigBee soon.
In one experiment, Lumenergi dimmed lights whenever the air conditioner became more active to keep power constant. No one noticed, said CEO Mike D’Amour. Check out the full disco treatment of Lumenergi’s dimming technology in this video.
While technologically intriguing, Lumenergi’s main draw for acquirers might be its contracts. It has installed the system in government buildings in California, Texas and Nevada. “The GSA wants to be a market maker,” D’Amour said. The company is also in discussions with EnerNoc, Comverge and others about dovetailing its capabilities with their demand response services.
Another bonus: the data gathered about when and how the lights are dimmed can be used to fine-tune HVAC control systems. “You can get a lot of information about human behavior” in this manner, D’Amour said.
Downside: the networking technology and software support LEDs, but the system wasn’t created with LEDs in mind. The bulk of Lumenergi’s technology is aimed at traditional lights.
Adura Technologies. This company's technology duplicates many of Lumenergi’s attributes -- fluorescent dimming capabilities, savings of up to 72 percent without denting productivity, a solution that consists of a hardware and software -- but it is focused on mesh networking. Relying on wireless mesh reduces the time and money needed for a retrofit and/or expansion. Adura has also ported its system and ALPS database to serve as a suite for building control and carbon management. Adura works with traditional and electronic ballasts.
Investors include VantagePoint Venture Partners, NGEN Partners and Claremont Creek, strong VC firms that like most are never that adverse to an acquisition. Customers include University of California Santa Barbara. CEO Jack Bolick came from Honeywell.
Downside: is mesh for everyone? Since lights are connected to wires already, in many retrofit cases, it may not make that much difference.
Cavet Technologies. Fluorescent dimming. The selling point? The Canadian company claims building owners will not have to swap out ballasts, thereby substantially cutting the hardware and installation costs. The only hardware that needs to be installed is the LumiSmart controller, a shoebox-looking device that costs $2,000 and sits in a computer room. A single LumiSmart can control 150 light fixtures.
In Ontario, where peak power costs less than 10 cents, payback on the system can occur in less than two years. In the Bay Area, where average power costs more than 10 cents, payback can occur in a year.
How does it work? It modifies the wave form of incoming power in a way that allows the system to shut off power going to the ballast for nanoseconds at a time. Those nanoseconds can add up to 35 percent less power going to lights with no one noticing.
The light retrofit is hugely appealing, but extensive testing will be required. The idea is sort of out-there.
Redwood Systems. Redwood swaps traditional wires for power-over-Ethernet cable. Suddenly, the wires for lighting form a network that can dynamically control LEDs as well as sensors used to detect smoke, carbon monoxide and motion. Building controls can be integrated, too, and a lot of the intelligence and hardware fits on a centralized console, thereby cutting installation costs and component count. Moore’s Law meets Cisco meets Johnson Controls with a dash of virtualization. Added bonus: the LED lights on Redwood’s network reduce ambient heat.
The downside? It is an LED-only solution and mostly appropriate for new construction. Some data centers have begun to install it, according to investor Battery Ventures.
Daintree Networks: Daintree has created a ZigBee-based lighting platform called ControlScope that it wants to sell to established lighting makers. In a sense, it’s a channel play: instead of selling directly to customers, the company sells software and components to the status quo. It worked for Microsoft. The system can handle all your major bulb types. Daintree's systems serves as both a networking and embedded operating system. It allows different devices in an office building to communicate via ZigBee. Additionally, its Wireless Area Controller translates and executes the commands.
Technically, it's not a lighting technology per se. It could be used to control power at the plug level or even HVAC devices. It is just something that gives ZigBee manners. The company went after lights because 1) lights are unmanaged and 2) there are lot of them.
"There are seven to ten times more light related nodes" than AC ones, said CEO Danny Yu, an HP alum. (Daintree grew out of HP know-how).
Downside: It depends on how well wireless goes over. The ability of Daintree to abstract controls like this also portends danger for all these companies. Now that the ability to dynamically dim has been cracked, big companies might just do it on their own. A startup’s primary value may lie only in its customer base.
Encelium: This company combines lighting control and energy management all in one. Customers include Toronto General Hospital.
The question mark here is the networking scheme. The system relies on its own GreenBus communications platform. Building owners are, in many ways, rightfully skittish about getting landlocked by less-than-universal standards.
Starfield Controls: whatever you want: fluorescents, LEDs and incandescents; wired networking with wireless soon; easy retrofit. The Colorado company has been around since 1997 and has rigged places like the Kansas City Convention Center. While age brings experience, age may also raise questions. Potential acquirers will want to know why the company hasn’t grown bigger.
Scientific Conservation: Building diagnostics. It uses artificial intelligence and predictive analysis to determine optimum efficiency and ferret out problems. It doesn't fix problems, but rather, identifies them, including problems with lighting. Customers include Intel and Boeing and the investor roster lists Draper, Fisher, Jurveston and the Westly Group. A lot of people in Silicon Valley have the hots for these guys.
EnOcean: The wireless light switch. EnOcean’s sensors harvest energy from your finger, convert it to electricity, and then send tiny electronic signals from a light switch to a fixture. No copper wire required. Think of it as a complementary technology -- the last meter in smart buildings -- to those listed above.
Downside: large companies like NXP Semiconductor have similar components, so EnOcean has to learn to swim fast.
Lumetric: Formerly HID Labs, the company has a dimmer/networking system for high-intensity discharge lamps, those whopper 250- to 400-watt lights you can see in big-box retailers and stadiums. Like some others here, it swaps a traditional ballast with an electronic one. It’s network-agnostic, works with a traditional-type bulb and claims EZ retrofits.
The SmartPod electronic ballast saves 40 percent out of the box just through basic dimming, says relatively new CEO Cheryl Diuguid. Another 20 percent can be saved by rigging motion and light sensors to the system for dynamic dimming, and yet another 20 percent can be saved through intelligent scheduling to supplement the sensors.
Check out the video for an example of energy efficiency. Diuguid is touching the ballast. In an ordinary situation, it would be over 300 degrees. No smell of burning flesh here.
In a Kelly-Moore paint warehouse in San Carlos, the lighting bill was cut by $15,000 a year, or around 83 percent. The number of light fixtures was reduced and so was the wattage of the bulb, but employees said the warehouse was actually brighter. Chalk that up to better illumination strategies. An added bonus comes in safety: in many warehouses, the lights are flipped off and on with circuit breakers.
“We started with the warehouse because the lights were on there 24 hours a day,” said John Hauser, who runs maintenance at the warehouse. “But they tend to be on when no one is around. Most of the business takes place in the first two hours of the day.”
Kelly Moore will deploy the system in its paint mixing areas and in other warehouses.
Downside: No LED support. Diuguid and CTO Greg Davis say that’s not a huge problem. HID light put out 90 to 104 lumens per watt. LEDs are at 60 to 70 lumens per watt. LEDs, thus, are less efficient right now for this type of application. Duiguid also claimed that LED solutions -- like the one from Digital Lumens -- are more expensive.
“It [the Digital Lumens system] is like three times the cost of ours,” said Duiguid. (Her name is a palindrome, by the way.)
Lumetric has installed 500 of its SmartPods, although half of those installed are from the now-discontinued first version of SmartPod. Lumetric has begun to work with Sylvania Lighting Services; it is also talking with Comverge. Fun facts: the global installed base of 31 billion luminaires (lighting fixtures) consumes 4.7 billion kilowatt hours of power. HID lighting accounts for 17 percent of total lighting energy use in the U.S. Put another way, four percent to six percent of total daily U.S. electricity use goes to HID lights.
Metrolight. Mood lighting for warehouses. Electronic ballasts and controls for traditional HID bulbs. Similar to Lumetric but older: it has been at this since 1996 and its equipment has 2 billion operating hours under its belt. Virgin Green Fund and Israel's Gemini are investors. Metrolight's electronic ballast controls the lamp with a constant train of electronic pulses. The lamp lights quicker, sputtering is minimized, and lower energy consumption and longer life for the bulb results.
Ed Hammer, the man who invented the CFL, told me the ballasts were state of the art in an interview in 2007.
Digital Lumens: Similar story to Lumetric's, but with LEDs instead of HID bulbs. In one particular case study, Digital Lumens dropped a customer's cold storage facility lighting bill 95 percent, from $225,000 to $10,000. The site was 268,000 square feet, and is used 24 hours a day, 7 days a week, 365 days a year with a 10 percent occupancy.
To get around some of the perceived shortcomings of LED bulbs in these environments, the company has devised its own fixture with onboard computers, sensors, decision-making engines and other features. Think the Cadillac Escalade of warehouse lighting.
Judging from Diuguid’s comments, don’t expect a lot of lost love between these two companies, but considering the size of the market, the customer base, the amount of power that can be saved and the more complex nature of the technology, these two (along with Metrolight) could well be the most attractive on the list.