This article was posted on Wednesday, Jun 13, 2012

Reminder:  New Lighting Rules from the Federal Environmental Protection Agency
By Tom Sjostrom

Now is the time to plan for the replacement of your fluorescent lights and ballasts!
As an owner/investor of real estate, you need to figure out what kinds of lighting you have, because significant changes have been mandated by the Federal Government in regards to your lighting fixtures.
The Federal Environmental Protection Agency (EPA) has developed new rules that are intended to reduce energy consumption and pollution (from mercury) and increase recycling.
In 2009, the EPA mandated that the manufacture of PCB containing magnetic ballasts and eight foot T-12 fluorescent tubes be discontinued. That has been followed up with a mandatory discontinuation of four foot T-12 tubes effective July 1, 2012, requiring the substitution of T-8 tubes in existing fixtures. The existing PCB ballasts can only be replaced with new electronic ballasts designed to run T-8 tubes.
The recognizable difference between T-12 and T-8 is that a T-12 tube is approximately one and a half inches in diameter whereas a T-8 tube is only an inch. (There is another tube, T-5, that is only ¾ of an inch and is used in special installations). The difference is easily visible in most installations. There is no way to tell what kind of ballast is powering the tubes without opening the fixture. If your fixtures have PCB containing ballasts, the ballasts must be treated as hazardous waste, transported through chain of custody record keeping and disposed of by specialists.
So, what are some possible outcomes for building owners? First, there will likely be scarcity of T-12 tubes since manufacturing of those tubes will end in July of 2012. On the flip side, it is also possible that there is more than one warehouse filled with T-12 tubes in anticipation of the manufacturing deadline, so it might be possible to find T-12 tubes through the end of 2012. All landlords with the older tubes will either end up replacing light fixtures or will have to retrofit the fixtures by replacing ballasts and tubes.
Tenants may quickly come to an understanding of this issue and raise an objection when in lease negotiations. Since triple net tenants pay their own utilities and lighting repairs, the cost of these upgrades cannot be shifted to them. Tenants will likely ask about, be knowledgeable about and expect the property owner to deal with the lighting changeover.
Finally, incentives being provided through tax credits and utilities will probably go away. The incentives currently available are intended to encourage owners to do a complete upgrade all at once. If you replace ballasts here and there at $17.00 each and tubes at $1.50, they don’t seem like large expenses. However, if you were to do 300 four tube light fixtures all at once the cost would be over $6,000 just for materials, not including labor. These incentive programs help ease the all-at-once pain of that large cost.

So, what to do?
The first thing to recognize is that doing tube and ballast replacement is a highly cost effective expense. With incentives, the payback is usually around seven to ten months, i.e. less than a year. The energy consumption alone drops dramatically and the light output, both in lumens and color, is better. ‘s a twofer reward in that regard. Actual on-going maintenance expense also drops dramatically because with the start up date for all tubes being the same, the light out call back rate drops to almost zero. And, if you hire a vendor/consultant to do the installation, they will guarantee the installation for a year, so you will have no call back labor.
Since the cost of tubes will be going up and magnetic ballasts are no longer available, now is the time to look at a solution. Call your local electric company and ask about incentive programs they may have available. Better yet, tell your property manager to get a quote from a vendor to get the work done. You will be surprised how inexpensive (in relative terms) it is to do a complete change-out and how quickly you recover the expense.
Going back to the issue of tenant knowledge: As I have said, tenants are becoming savvy about this issue, they will want the better light of the T-8/electronic ballast combination and lower electric bills. Now is the time to promote an upgrade for your property to existing tenants and prospective tenants. Don’t let this opportunity pass you by.

Tom Sjostrom is Vice President of Bluestone and Hockley Real Estate Services, an
Accredited Management Organization (AMO) by the Institute of Real Estate Management (IREM).

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