The confusion and way out of EMC mode of LED street lamp

Editor's Note: According to the characteristics of the "contract energy management" model, the paper analyzes the confusion of the LED street lamp in the implementation of the "contract energy management" mode, and proposes to play the leading role of the government, which is the current implementation of LED street lights "Ten Cities and Ten Thousand Cities" The fundamental way out of the project.

As a major energy-consuming country, the energy consumption per unit of GDP of Chinese units is three times higher than that of advanced countries, and the energy consumption per unit of production is 50% to 100% higher than that of developed countries [2]. China is experiencing a period of transition from a planned economy to a market economy. The energy-saving management system of the original planned economy is increasingly unable to adapt to the new situation. Therefore, it is necessary for energy-saving work to introduce and promote a kind of energy-saving investment and service based on market mechanism. A new mechanism that integrates contract energy management.


2. Analysis of the "contract energy management" mode of LED street lamps

Energy Management Contracting (EMC) is a new energy-saving mechanism that emerged in developed countries in the 1970s. It is an energy-saving service contract with customers, including energy auditing, project design, project financing, and equipment. A set of energy-saving services such as procurement, engineering construction, equipment installation and commissioning, personnel training, energy-saving confirmation and guarantee, and a business operation mode that recovers investment and profits from the energy-saving benefits obtained by customers after energy-saving renovation [3] . The essence is an energy-saving investment method that pays for the full cost of energy-saving projects with reduced energy costs. This energy-saving investment method allows users to use future energy-saving benefits to upgrade plants and equipment, reduce current operating costs, and improve energy efficiency.

This model has the following characteristics: First, energy-consuming enterprises can complete energy-saving technological transformation without capital investment, so-called “zero investment”; second, EMC bears technical risks and economic risks, and all the money paid by energy-consuming enterprises to EMC comes from energy. The project benefits brought by the savings, the user “zero risk”; third, after the contract is over, the energy-saving equipment and all subsequent energy-saving benefits belong to the energy-consuming enterprise.

3, LED street light "contract energy management" mode of confusion

The contract energy management model has largely solved the non-market factors in energy conservation promotion, and achieved a win-win situation for all parties involved. It is indeed an effective new mechanism and new model for energy-saving investment. Europe and the United States have been rapidly promoted and become the mainstream mode of energy-saving investment. However, in China, which is still in the economic transformation, especially in the field of municipal lighting renovation of LED street lamps, due to the lack of sufficient power of the stakeholders, the rapid upgrading of products, the worrying environment of the industry, and so on, the current situation is facing "satisfaction but not a seat." "The situation of thunder and heavy rain is small," and the road to contract energy management of LED street lamps is struggling.

Why is the contract energy management based on a win-win basis not long in China? A good thing, if you can't promote it, then there must be a reason: either everyone does not understand the EMC model, or there is a mechanism barrier. Contract energy management is not new in China, but its domestic development seems to be only “looking beautiful”. Through extensive research and analysis on the market, we found that there are mainly some of the following limiting factors in the implementation of the "contract energy management" model of LED street lamps.

Many municipal departments have deviations from the energy-saving concept of LED street lamps. Although LED street lamps have great potential for energy saving, they do not care about energy costs. When “energy saving without spending money” encounters “the owner who is not bad money”, it is like “shaving the head and picking up the heat”, it is difficult for contract energy service companies to expand the market. After calculation, the contract energy service enterprises should recover the cost, and the proportion should be 70%. This is also an international practice. However, many government departments have a "facing south" mentality. In order to show a strong position, they have to occupy a big part in the division. Thus, a win-win situation becomes an empty talk. The financial management system of government agencies and public utilities also has policy barriers for LED street lamp energy-saving renovation projects. For example, a local municipal agency street lamp has an annual electricity bill of 1 million yuan. After the introduction of LED street lighting, it will be reduced to 200,000 yuan. However, according to the financial system that the government department has actually reported, it cannot smoothly save the saved energy saving of 800,000 yuan with LED. Street lamp companies share. In this way, not only the investment of LED street light enterprises can not be recycled, but also the enthusiasm of these municipal units to introduce LED street lights.

3.2. The recognition crisis of mutual trust between enterprises and users

In the process of implementing LED street lamp energy-saving renovation, enterprises also bear the double risk of technology and capital. The technical risk is mainly that if the LED street lamp used in the energy-saving project is not the independent product of the enterprise, the technical performance and quality reliability of the product will not directly affect the transformation effect and contract fulfillment; even if it is its own product, LED street light is a high-speed development of semiconductor technology. It has been put into use and the latest LED street light to be put into use. There is also a difference in cost performance. How to balance the difference is also a problem.

The capital risk depends mainly on whether the owner can perform the credit performance after receiving the energy-saving income and pay the energy-saving income on schedule. Since LED streetlight enterprises are not investing in independent projects, the operation of energy-saving projects is attached to customers. Since they do not have the initiative, they often refuse to pay when they donate money and wait until they share energy-saving benefits with customers. The implementation of the LED streetlight project has been for more than a decade. If the energy-saving customers are not well-managed, the cost of rectification undertaken by LED streetlights is likely to be difficult to recycle. In particular, once a customer has a major personnel change, separation, restructuring, legal proceedings, etc., the benefits of LED street lighting companies are even more difficult to protect.

3.3. Lack of authoritative LED street lamp technology certification standards and institutions

At present, LED street lamp technology has not made a major breakthrough due to luminous efficiency and heat dissipation technology, and the technology is not fully mature. The corresponding national and industry standards have not yet been officially issued, and the authoritative certification and testing institutions are seriously absent. The non-standardization of industry identification and promotion has restricted the promotion and application of LED street lamps. In addition, the companies engaged in the production of LED street lamps in the market are mixed and the products are mixed. Due to the lack of the voice of the authoritative department, it is bound to increase the difficulty of propaganda of the superior enterprise products, and further the government's doubts and cautions on LED street lights.

3.4. The current tax system has caused the tax burden of energy-saving service enterprises to be overburdened

Based on market operations, EMC Corporation provides customers with quality services, including the purchase of energy-efficient equipment for customers through procurement for the whole society. However, China's tax system always regards such companies as general energy-saving equipment sellers, that is, mistakenly believes that it is profitable by reselling energy-saving equipment. Therefore, EMC's energy-saving service contract with customers is regarded as equipment purchase and sales contract. In this way, EMC's service fee is regarded as the markup of the general energy-saving equipment seller, and is included in the VAT specification, that is, the part that should be the service tax is turned into the value-added tax; at the same time, EMC's The revenue comes from the sharing of energy-saving benefits. Since the tax department regards EMC's services as simple equipment sales, the energy-saving benefit sharing is regarded as the installment payment of equipment sales. According to China's tax system's accrual system [4], after EMC installed energy-saving equipment to customers, it was recognized that equipment sales have been realized. Thus, after EMC implemented energy-saving projects for customers, it only started to share energy-saving. When the benefits (beginning to recycle the investment), it is determined that the enterprise income tax should be paid in full according to the contract. Originally, EMC has taken risks for the client to fund the project, and it has to pay the income tax in advance for the income that has not yet been obtained. It can be said that it is worse.

3.5. LED streetlight renovation project financing bottleneck.

At the beginning of the operation of the LED street lamp renovation project, the enterprise needs to provide a package of services such as start-up capital, equipment, installation and commissioning, maintenance and repair, etc., and recover the proceeds later. Therefore, the initial start-up capital is critical to the business. However, many LED streetlight companies belong to the newly-created high-tech enterprises, most of which are in the initial stage. The new technology that has just emerged and is not widely accepted and recognized by the market has only the future charging rights and cash flow, while commercial banks It is precisely the assets that can be used as collateral for land and factory buildings, which is the most fundamental reason for the difficulty in financing energy-saving enterprises such as LED street lamps. In addition, if there is no business order for the bank to carry out energy-saving project loans, the branches will not be able to carry out this business because “there is no corresponding system and norm in the field of energy-saving loans, and there is no basis for it.” In developed countries, most of the energy-saving investments of contract energy management companies are derived from loans. In addition, insurance companies in developed countries have specialized insurance types to help contract energy management companies resolve risks and prevent customers from defaulting on arrears.

However, in China, although the country is making a lot of efforts in the financing guarantee policy, it is not a day's work to eliminate institutional obstacles. Financing difficulties are also a major obstacle before the industry.

3.6, LED street lamp industry "senior talent"

At present, contract energy management is still in its infancy in China, and the industrial environment of contract street energy management for LED street lamps is not ideal. Insufficient credit guarantee, unclear energy consumption standards, and uneven measurement systems make both the company and the government have concerns, wariness and trouble. The experience of developed countries shows that cultivating the market environment is an important part of the government's promotion of contract energy management. China is in a period of transitional economy. How to cultivate the market environment is a very important issue. The implementation of the "Ten Cities and Ten Thousand Miles" and "Thousand Miles of 100,000" plan is a beneficial attempt to cultivate the market and promote the advancement of LED street lighting technology.

For those who understand both LED street lighting technology and contract energy management, social training is the most effective emergency compensation method. LED companies are also very willing to train middle- and high-level energy-saving talents by sending employees to participate in such training. Some well-known enterprises in the industry also use their own technological advantages to train outstanding talents within the company. However, on the whole, enterprises call for systematic and sustained training, and relevant institutions of higher learning should take the initiative to assume social responsibilities and obligations in this regard. The advantage of large state-owned enterprises lies in their overall strength and ease of financing, which can solve the problems of credit and financing. These LED street light companies can take the lead in considering setting up their own EMC company, and handing over the cumbersome energy-saving work to EMC. EMC can also undertake energy-saving projects outside the company, which not only trains the team, trains talents, but also works on the project. Summarizes excellent management experience. The municipal road lighting management department plays a very important role in the transformation of LED street lights. The contract energy management model has actually challenged the old street lamp procurement and maintenance systems in some cities. The management department should proceed from the actual situation of the city in line with the concept of promoting energy saving and emission reduction in the lighting field and ensuring road safety. To determine the way to develop the road lighting in the city.

International experience shows that the energy-saving project of contract energy management mode, due to its typical characteristics of first investment and post-revenue, can not be separated from the government's policy support and industrial guidance from the start to the development. In order to break through the bottleneck of large and high-risk funds for LED streetlight demonstration projects, the government should give full play to the leading role and take measures as soon as possible to establish an effective organization and coordination mechanism and mechanism to build a credible communication between “users + enterprises + banks”. Platform, integrate government and market resources, strengthen institutional and institutional innovations in fiscal, taxation, financing, guarantees, etc. related to contract energy management, and vigorously support organizations, financing methods, fiscal and taxation systems, and incentive policies to change the current single LED street light companies are in a state of independence and individuality.

LED lighting technology is the new energy source that is the most energy-saving and environmentally friendly in response to the energy crisis. The contract energy management model is the most suitable market operation mechanism for energy saving and emission reduction. As long as the government gives full play to its leading role, sets up some credible platforms, and further implements some preferential policies for contracting energy management projects for LED street lamps in terms of financing and taxation, and multi-pronged support, with a prudent attitude, gradually promoted, LED The road to contract energy management mode for streetlight renovation will surely become more and more flat.

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