Free commercial LED lights sounds great, right? You get free LED lights such as tubes, downlights and even highbays and then you start reaping savings on your electricity bill while lowering your carbon footprint. Unfortunately, it’s not as simple as that. Free LED lights are free because the product is cheaply made in order for the business that sells it to you to make money. Cheaply made product can cause problems and the organisations that sell them are often not around long enough to rectify the situation.
In this blog, we will take you through the things you should know before opting to upgrade to free LED lights through the Victorian Energy Efficiency Target (VEET) scheme.
How can free LED lights possibly be free?
Firstly, a bit of background. In very basic terms, the VEET scheme allow accredited businesses that upgrade commercial properties to LED lights to earn VEEC certificates which are traded in the wholesale market (for the ins and outs of the VEET scheme read our blog). The price fluctuates considerably depending on the number of upgrades that are taking place.
Consequently, certain businesses are offering free product based on the assumption that the VEEC price will be higher than the price of the product they are installing in order to make money. Let me give you an example of how this works.
Installer ‘A’ is offering free tubes under the VEET scheme. For every standard fluorescent tube they replace they will receive one VEEC certificate (this differs depending on the area it is going into – office, school etc, time used and the wattage saving you will make). Installer A’s business model crucially depends on the price of the replacement product being lower than the VEEC certificate in order to make a return.
What does this mean? Cheap replacement product and LED upgraders that are in business purely based on a VEEC price that is totally out of their control.
So, what do you need to think about?
You now understand the logic behind free LED lights, but what do you absolutely need to consider before committing to an upgrade?
First and foremost, the most important thing is product quality. Free lights are only free for one reason – they are cheaply made and include budget componentry. It is impossible to give a well-made top or even mid-range product away and make money. We looked at doing it, but the reliability and performance of the product that we would have to have given away is not something we would contemplate giving our customers. Our LED lights for example use up to 50% less energy that free product – its incomparable.
To give you further food for thought, the NSW Energy Savings Scheme (ESS) has been forced to prohibit the sale of free LED lights due to the large number of complaints and product recalls.
Only one chance to upgrade
You only receive subsides through the VEET scheme once – the first time you upgrade. Do you want to risk using the considerable subsidies you receive on substandard product that might not do the job you are after and potentially won’t last?
Sustainability of free product businesses
As explained above, the business models of these organisations rely on the VEEC price remaining a considerable amount above the price of the product and installation. If this is to dip, the companies could potentially go out of business, voiding any warranties and leaving you in limbo.
Still considering? Ask for references of people that have been upgraded for six months or more, go and see the lights in action and ask about registered recalls. For even more information, contact one of our lighting specialists today to discuss your options.