The new model of LED lighting market development is low in operability
In April this year, China's first large-scale EMC alliance initiated by the Guangdong Green Industry Investment Fund settled in Shenzhen. The alliance brings together a number of upstream and downstream companies in the LED industry chain. In addition, a number of financial institutions, testing agencies, construction engineering companies, engineering design companies, bidding companies, law firms, energy contract management service companies, etc. have also joined it.
Li Xuefeng, chairman of the Guangdong Green Industry Investment Fund, introduced that the "Green Industry Investment Fund" will provide support to the EMC Alliance. "Invest through the fund, without adding pressure to the government's finances, you can get the contract and share the contract through the alliance. To find the market."
EMC, or ENERGY MANAGEMENT CONTRACT (EMC for short), is a new type of market-based energy-saving mechanism, and its essence is an energy-saving business method that uses reduced energy costs to pay for the full cost of energy-saving projects. In short, with the EMC model, the buyer can replace new energy-saving equipment at "zero cost" without paying any additional costs.
"The advantage of the EMC model is that it can minimize the customer's acceptance threshold." Sui Shirong, executive vice president of the Shenzhen LED Industry Federation, told reporters that this is of obvious significance to the LED industry in the market development period. In this context, in the face of more than 70% of municipal projects in the domestic LED lighting market, the EMC model was once placed high hopes.
"Looks beautiful" EMC model, in actual implementation, it is full of resistance.
"Not all projects are suitable for EMC mode." Zhang Yusheng analyzed to reporters that the characteristic of EMC mode is that the more electricity is saved, the shorter the project investment recovery period.
However, according to our reporter's investigation, under the constraints of many domestic factors, the EMC model in the LED lighting market is more "looks beautiful". Due to the domestic government financial system of "separate revenue and expenditure", EMC lacks operability in the implementation process. In addition, low electricity bills in some areas have also led to a long EMC investment cycle, and LED lighting companies lack enthusiasm.
It depends on two factors. The first is the scale of the project, that is, the number of lamps replaced by the project. The larger the number, the more electricity costs will be saved. But to some extent, this contradicts the government's concept of energy conservation. "From the perspective of economy, some municipal governments often adopt the energy-saving method of "lighting lanterns" for street lighting." Li Zhijiang, chairman of Shenzhen Wanrun Technology, who has investigated the street lighting market in many places, explained that, especially in secondary cities, After zero o'clock in the evening, the street lights often turn on every other light.
"From the perspective of saving, the electricity bill will therefore be cut in half. But from the implementation of the EMC model, it means that the investment payback period will be doubled." Li Zhijiang said embarrassingly: "For LED companies, the more Where it is saved, the less suitable it is for EMC mode."
Secondly, the electricity bill standard is also another key variable of the EMC model, that is, the more expensive the electricity bill, the more electricity bills can be saved, which is more conducive to the implementation of EMC contracts. But in reality, the uneven electricity tariff standards in various places have become another resistance to the promotion of the EMC model.
"In theory, the EMC model can well solve the buyer's financial problem, so that it is easier to be accepted by the buyer." Zhang Yusheng, executive vice president of the LED lighting company Huaye Group, told reporters that because LED lighting is facing a replacement market In terms of market expansion, the EMC model had high hopes for a while. "If the electricity bill in a region is very low, the EMC model is difficult to implement." Zhang Yusheng gave reporters an example. Hua Ye had visited many cities in Jiangsu Province, and the local average electricity bill was only about 0.5 yuan/kWh. "Compared with Shenzhen, etc. In areas with high electricity prices of about 0.9 yuan/kWh, if Jiangsu adopts the EMC model, its investment cycle will be doubled." After inspecting a number of streetlight projects in Jiangsu, Hua Ye chose to give up.
According to Zhang Yusheng, there are usually two EMC cooperation modes: First, the annual electricity bills saved are divided between the government and the enterprise in proportion, and they are returned year by year until the contractual amount is completed. Usually, under this mode, the contract execution cycle is longer. long;
The second is that the full amount of electricity saved each year will be returned to the LED company until the contractual amount is agreed. "This model is faster to pay back and is more favored by LED companies."
This is only the basic structure of the EMC model. In actual implementation, banks and other financial intermediaries are often involved. "EMC puts a lot of pressure on corporate funds, and it is usually difficult for companies to support their own funds." Zhang Yusheng said that in the EMC model, banks generally provide loan support for LED companies. Three parties complete".
The intervention of financial leverage allows an EMC project to be started at a low cost-this has undoubtedly become a good medicine for the expansion of the LED market. Previously, the high price cost of LED lighting products has become a direct obstacle to their market promotion. For a time, the "energy" of the EMC model began to be continuously amplified in the ascendant Chinese LED market. Our reporter learned that well-known companies in the domestic LED lighting industry, such as Kingsun Optoelectronics and Huaye Group, have launched EMC projects one after another.
In fact, from the perspective of electricity costs alone, since industrial electricity costs are much higher than civil electricity, the LED replacement market for industrial lighting has huge potential. "We are also paying attention to the industrial lighting market, but the market often has a limited scale of individual projects, which is still not conducive to EMC implementation." Zhang Yusheng said frankly that it is not easy to find a high-power, large-scale LED replacement project. Restricted by "two lines of revenue and expenditure"
Electricity fees and scale limitations are not all factors that hinder the implementation of the EMC model in the LED industry.
According to our reporter, in the domestic LED lighting field, more than 70% of the market is municipal lighting projects. Although the State Council has repeatedly proposed to vigorously promote the development of energy-saving and emission-reduction industries such as LEDs, it is understood that the implementation of EMC is still struggling in the LED lighting replacement market led by the grassroots government.
Various government departments have a subtle attitude towards EMC. A realistic problem is that the current government department’s current financial system of “separate revenue and expenditure”, as far as any government department is specific, its electricity expenditures and exports are all in the financial department.
"On the surface, the electricity-using department does not spend money." An LED company leader who participated in the government's EMC project analyzed that this directly led to the lack of motivation for specific government departments to replace energy-saving and emission-reducing LED products.
Not only that, but also trapped by the "two lines of revenue and expenditure" financial system, the person in charge of another LED company trying to participate in the EMC project told reporters, "The current government department’s financial system does not have independent power to pay for electricity. , Making it difficult to cash out the money saved by replacing LEDs and other new energy sources."
"The implementation of MC in the LED lighting market currently lacks successful samples in China." A number of LED business executives said that how the government can coordinate the implementation of EMC projects will be the key to the successful implementation of EMC projects. An LED company executive who did not want to be named bluntly said that due to the long implementation cycle of EMC projects, the adjustments and changes of government agencies and personnel during this period will bring great uncertainties to the future implementation of EMC contracts. In this context, banks as financing intermediaries dare not lend easily.
There are advantages and disadvantages. On the one hand, the investment is relatively large. On the other hand, the payback period is prolonged. Enterprises are facing financial pressure and the weekly change is slow. In addition, if there is a problem with the LED lamp, as well as subsequent maintenance costs, it will be a considerable expense. In April 2008, Huaye Group signed an EMC street lamp renovation contract with the Jingdezhen Municipal Government in Jiangxi, with a contract value of 50 million yuan. It is the first large-scale EMC project in the domestic LED street lamp field. "The coordination and unified management of the local government played a very important role in the execution of the contract." Zhang Yusheng said.
