Chen Bin, general manager of the LED tunnel light leading enterprise Guangdong Zhonglong Company, is somewhat distressed. Recently, Zhonglong was always required to adopt the contract energy management (EMC) mode when participating in some bidding for LED tunnel lights in China.
The new model not only imposes strict requirements on equipment, technology and capital, but also lengthens the recycling cycle of project revenues, enabling enterprises to take on more risks.
“Zhonglong is an LED lighting manufacturer. If the EMC model is adopted, it means that Zhonglong will transform from a manufacturer to a service provider.†He believes that local governments should calmly think about the implementation mode and scope of the new model, otherwise the transformation pressure may Will kill some manufacturers with real technical strength and experience.
Contrary to Chen Bin’s pessimism, Li Xuliang, the chairman of LED lighting leading company, is more optimistic. The new model can solve the problem of LED street lighting standards, product quality and availability.
Transformation service
On April 6, the State Council approved the Opinions on Accelerating the Implementation of Contract Energy Management to Promote the Development of Energy-Saving Service Industry jointly formulated by the National Development and Reform Commission and other ministries and commissions (hereinafter referred to as the “Opinionsâ€). The "Opinions" require banks and other financial institutions to encourage innovative credit products based on the characteristics of financing needs of energy-saving service companies, broaden the scope of collateral, simplify application and approval procedures, and provide financial services such as project financing and factoring for energy-saving service companies.
The so-called "contract energy management" is a new model of the energy-saving service industry. That is, the professional energy-saving technology service company accepts the entrustment of the customer (energy-saving owner enterprise), signs the energy service contract with the customer, implements the energy-saving project with its own funds, and provides the one-stop service completion contract for the equipment, technology and capital necessary for the energy-saving improvement. Gain revenue by saving energy costs for customers.
“Because the domestic “Ten Cities and Ten Thousand Cities†are actively promoting, local governments also hope that the EMC model will bear fruit in the field of LED street lighting.†Chen Bin pointed out that some enterprises lacking capital and technical capabilities have already rushed into the LED street lighting industry. There are more than one thousand LED street lamp companies in China, and the market order is somewhat chaotic.
Chen Bin said that Zhonglong has done LED lighting for 6 years. At present, the energy-saving ratio of products is only about 35%, while some newcomers claim to save 70%. He thinks this can't be done. What most people can't stand is that accepting the EMC model is tantamount to forcing the role of Zhonglong to change from a manufacturer to a service provider.
Because, after installing the LED street light for the owner, the payment is made into a company account by a penny of the energy cost saved for the customer every month. In the long payback period, LED street lamp manufacturers are also responsible for product maintenance.
"If there are projects all over the country, is it necessary for Zhonglong to build a service team in all cities? How many people do you have." Chen Bin said.
Perhaps based on this, recently, in a tunnel lighting project in Chongqing, six successful bidders such as Zhonglong, Shanghai Sansi and Philips collectively opposed the adoption of the EMC model. The final compromise result is: segmented lighting is not used, basic lighting is used.
Chen Bin believes that compared to LED street lights, 24-hour lighting tunnel lights should be more suitable for EMC mode.
Contradiction of payback period
Zhang Xiaofei, CEO of Gaogong LED, revealed that most LED streetlight manufacturers are reluctant to adopt the new model, mainly because “the payback period is too long.†At the beginning of this year, many banks were interested in the emerging phenomenon of EMC model, but due to the cost of electricity and Problems such as power saving measurement standards have not been implemented for the time being.
For example, according to the current standard of 30% energy saving, the recycling cycle of an LED street lamp renovation project will exceed 10 years. Chen Bin said that if the current high-pressure sodium lamp of 250W is calculated according to 40% energy saving, it should use 150W LED lamp. Generally, it can be used for 10 hours a day, saving 1 degree of electricity a day, and saving 365 degrees of electricity a year, that is, about one year. Save 365 yuan.
The market price of 250W high-pressure sodium lamp is 400 yuan to 1500 yuan, and the market price of 150W LED lamp is 3,000 yuan. Divided by annual cost saving, the payback period is 4 to 7 years.
Zhang Xiaofei said that the new model is expected to be implemented in the field of LED street lamps. It is necessary to wait for the implementation of the "Opinions" to implement the contract energy management project for energy-saving service companies, obtain business taxable income, temporarily exempt from business tax, and transfer to the use of energy for free. The assets of the unit formed by the implementation of the contract energy management project are exempt from VAT. In this way, the cost of the street lamp can be greatly reduced and the payback period can be shortened.
Ren Jianwei, deputy chief engineer of Chongqing Expressway Development Corporation, believes that the main body of the EMC model should be a bank. At present, due to the lack of standards for LED street lamps, most of the projects are in the pilot period, and the scale is small, and the enterprises have become the main implementation units. However, due to the small scale of the pilot, banks are currently reluctant to intervene. Before the scale, street lamps companies have financial pressure.
This view is consistent with the content of the Opinions. The latter said that banks and other financial institutions are encouraged to innovate credit and guarantee services according to the characteristics of corporate financing needs, simplifying the application and approval procedures.
Zhang Xiaofei said that there is no successful sample yet. The main reason is that the LED street lamp adopts the EMC mode with a payback period of more than 10 years, and the best payback period should be 3 to 5 years.
But Li Xuliang said that the market does not wait for people. The key to the implementation of the new model is whether the cost of LED street lights is low enough and the quality of the products is excellent. If the cost is low, the payback period is about 5 years, which is acceptable.
In fact, Qin has already resolved the situation ahead of time. In order to resolve the contradiction between service and local protectionism, it has set up more than 10 joint ventures throughout the country, and specific projects have been implemented by them, avoiding service problems. Li Xuliang said that local partners have channels and other resources, and they have the skills, manpower and funds to complement each other.
Up to now, the share of domestic LED street lamps has exceeded 50%, and six sample cases have been implemented in China. Li Xuliang revealed that according to the 6 years of 200,000 baht shipping experience, the current new model should be more suitable for the “reconstruction project†of street lamps, and new projects are not suitable.
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