Lighting efficiency series: It’s RRSP time… for lighting?
By Greg Jones
Well, it’s that time of year again — RRSP season is just around the corner. Every year I leave this to the last minute. The delay is usually due to my procrastination over where to put my money. Where can I get a decent return? My choices are usually pretty limited.
By Greg Jones
You either go with the low risk option of a GIC that currently pays up to 3 per cent if you are willing to keep your money there for five years or you can be a little more adventurous, accept some risk and try the stock market. My track record there isn’t that good and right now I would be happy if I just had my money from the past few years back in my account.
What if you had the option of investing in something that had a low risk return of 30-100 per cent? I’ll bet you would be very interested and the lineup would be long. Most people would say that is just unbelievable or certainly too good to be true. However that is the return any company can get on a lighting retrofit that typically have paybacks of 1-3 years. Banks or leasing companies are also willing to provide the upfront capital to make it happen — just like your bank will help you put aside money for your RRSP. With those kinds of returns, freedom at age 55 is looking very good!
Despite these kinds of returns, projects are often not approved to go forward and it is hard to understand the reasoning. If you are the business owner why wouldn’t you want to make that kind of investment? In one to three years you have your capital returned to you and then you make a 30-100 per cent every year from that point forward. If the savings are re-invested in the company then that company is going to be more productive, cost effective and undoubtedly sales and profits will increase. Some people may say this investment is too risky, yet lighting represents the single most verifiable project available to save energy and money
Over the past year, there has been much discussion over company pension plans being underfunded and the economy not allowing these companies to generate the profits necessary to make the required contributions. In many of these companies, there are lighting opportunities that can be taken advantage of. Why don’t pension plans or the employees directly invest some of their money into their own companies and take advantage of this untapped resource? An investment generating a 100% return would certainly help the pension fund. Perhaps the company and pension plan could jointly undertake the project and share the benefits. In either case the advantages are large and the risk small. The environment would also benefit.
I’d like to hear your comments on this subject. You can either tell me I’m missing the boat or maybe we can find a way to make these projects and these returns a reality. All I know is that I won’t be happy with my standard 3-5 per cent return any more. Contact me at the email address below.
Greg Jones (firstname.lastname@example.org) is President of Nexstar Lighting.