NextGen Illumination Targets Cities for LED Retrofits

by Luke Jones  on Monday, Oct. 7, 2013 12:00 am  

NextGen now has two banks backing up the plan — McCormick said he couldn’t yet identify them — and cities are authorized for projects costing up to $20 million.

“It costs no money up front,” McCormick said. “Zero down.”

The model is intended to allow cities to start recognizing the savings from LED lighting instantly. Payback is projected over three years maximum.

“The finance terms are all very low — prime, or just over,” he said. “The term is very short.”

He said the model is different from the typical financial model provided to municipalities: Traditionally, the payback terms are much longer. NextGen’s is short, just far enough to pay the note back.

“In terms of a longer-term performance contract, you may save a thousand [dollars] a month, but that thousand goes to pay the note, and you end up with energy-efficient lights and are basically paying the same as before,” McCormick said. “This gives an opportunity for cities to actually get ahead.”

NextGen provides all lights and installation. Rush noted that NextGen is prepared to address a municipality’s needs all at once, rather than focusing on a single building. The job includes everything from city offices to streetlights.

“By being able to address multiple levels — interior and exterior lights — we draw down the overall ROI of the project,” he said. “That enables you to do the whole thing.”

NextGen’s Cut

It sounds like a good deal for cities. But what about NextGen?

McCormick said it’s all about finding a niche.

“We’re in an arena where we’re [competing with] companies like Philips and Sylvania,” McCormick said. “We have to have something that differentiates us. … We wanted to create an entire service package. We try to work every part together and find out what would be the best solution. Doing it this way seems like really doing it as no one else is offering.”

 

 

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