This article is part of a regular series highlighting the innovative ways Scotiabank clients are doing their part to cut carbon emissions.
In the 40-plus years since Dustin Paul’s father Don began selling incandescent lighting out of his garage in Calgary, Commercial Lighting Products has morphed into a business intent on helping clients save on energy costs, while retrofitting for a net-zero future.
Today, the Delta, B.C.-based, family-owned and -operated business advises residential and commercial property management companies, manufacturers, retailers and municipalities across Western Canada, on implementing energy-efficiency solutions for their lighting needs, as well as for horticulture and electric vehicle (EV) infrastructure.
“Our value proposition is simple,” says Paul, Co-CEO of Commercial Lighting Products, pictured above. “We add value by getting the right technology operating in the right way from a sustainability standpoint and for what makes sense for a business’s return on investment.”
Early on when Don and a business partner who has since been bought out were struggling to make ends meet, it was hard to imagine how much the technology in lighting would change, Paul said.
The shift from inefficient incandescent lighting — where 90% of the energy that goes into the filament is dispersed as heat — to compact fluorescent lamps (CFL) and then light-emitting diode (LED) products was gradual. “As things started to scale and technology changed, so did the business,” Paul said.
The biggest shift for the company, which now operates five brick-and-mortar locations in British Columbia, Alberta and Manitoba, and employs more than 80 people, was its move into energy management consulting. “We got pulled into it by the widget itself changing,” Paul said. The transition, he noted, was also accelerated by BC Hydro’s ramping up of incentive programs in the mid-1990s.
Commercial Lighting, a client of Scotiabank and its subsidiary Roynat Capital, recently completed a financing to assist in an ownership transition from Don to his sons Dustin and Tayhler. The financing enabled Don to take capital out of the business, while allowing Dustin and Tayhler to increase their ownership stakes and become Co-CEOs.
“We’re pleased to be a part of Commercial Lighting’s continued journey as it forges ahead in helping businesses find sustainable energy solutions. We’re incredibly impressed by the Pauls’ ability to properly structure a transition of their business to the next generation of the family, while at the same time transition the business to the next generation of lighting and environmentally friendly electrical solutions. This has allowed them to tap into other verticals including greenhouses and electric vehicle charging,” Derek Strong, Regional Director at Roynat Capital said.
As the technology was changing, Commercial Lighting realized that landlords and tenants faced challenges in upgrading lighting in older buildings. Because lighting typically comprises 35% of annual energy expenditure, changes were necessary to bring costs down.
Last year, for example, Commercial Lighting helped Vancouver-based QuadReal Property Group lower its energy costs by slightly more than half at its Broadway Tech Centre. The urban business campus, which stretches over seven hectares in Vancouver, comprises eight low-rise office buildings leased for office, production and distribution services, retail space, and daycare.
“It’s a fantastic story in terms of the energy saved, as well as the money that’s saved,” Paul said.
There’s a host of game-changing energy models we can deploy to have people supplement energy usage on site .
Controlled environment agriculture
Vertical farming — first touted in the mid-1990s but considered too expensive — has made a comeback in recent years with the development of better and cheaper lighting and hydroponic equipment. Interest in the compact farming method also has increased with consumer demand for locally grown produce in light of the pandemic and disrupted supply chains.
For Commercial Lighting, vertical farming provided an opportunity to bridge the gap between what the market was asking for and available products. In partnership with Signify (formerly Philips Lighting), Commercial Lighting provides a plan for growers to achieve higher crop yields on a smaller footprint while improving flavour, nutritional value and shelf life utilizing a range of Philips professional LED grow lights.
“LED is changing the dynamics of the energy profile of a vertical farm while substantially increasing yields, as well as improving the logistics of distributing the product sustainably. When you go to the grocery store, you think nothing of the carbon emissions or the operational costs of fruits and vegetables being trucked in from California, Mexico, and Peru, for example,” Paul said.
As the market for electric vehicles began to gain traction and given the similarities between it and the lighting market, Paul said it only made sense for Commercial Lighting to take a consultive role in the market.
“We believe this is a disruptive technology that is going to change the landscape in a very short time,” he said.
This April, Minister of Transport Omar Alghabra mandated that at least 20% of new passenger vehicles sold in Canada be zero-emission by 2026, and 60% by 2030, on the road to 100% by 2035. Commercial Lighting contends that with the expected increase of EVs on the road, the availability of public EV charging stations will be a necessary addition to commercial and residential properties, as well as serving to increase property value.
The capital expense of EV chargers can be high for landlords, especially when interest rates and the cost of borrowing is going up, Paul said. However, he noted that if the chargers are in the right location and have sufficient charging hours, the asset can be cashflow positive.
Starting this year, operators of a public, fleet, workplace, retail, hospitality, and multi-family residential charging station in British Columbia can participate in the BC Renewable and Low Carbon Fuels Requirements Regulation and Greenhouse Gas Reduction Act offsetting the cost of installing and operating the equipment.
Commercial Lighting plans to launch a solar energy vertical in Alberta to take advantage of that province’s high number of sun days, and have begun exploring battery back-up and off-grid solutions as another potential offering.
“There’s a host of game-changing energy models we can deploy to have people supplement energy usage on site,” he said.
Paul, who worked at commercial real estate giant Colliers International before joining the family business 13 years ago, said the knowledge he gained there is invaluable in helping gauge what landlords are looking to leverage in a property. “I know how important energy is to asset owners: It’s critical,” he said.
“If you have a more efficient building, it’s going to be more sought after and have a higher tenant retention rate, so it’s a far-reaching, economic piece of the puzzle.”