Suggestions
Installing a new street lighting system that will last a generation or more requires the community to make a significant financial commitment. Among many other factors, communities must consider what is needed, when it’s needed, how the chosen solution will be integrated into the community, and what is the best way to pay for the new lighting system.
This article presents a summary of the most common options, in rough order of popularity, for communities who desire to implement a street lighting system upgrade immediately but who will need to pay for the system over time.
Tax-exempt bonds
o Pros: Low cost of borrowing.
o Cons: Long preparation period and high preparation costs.
Slower realization of savings from the new lights.
Sometimes not possible due to existing bond covenants.
Risk that referendum will be rejected (and project delayed or cancelled).
Tax-exempt lease purchase (TELP)
o Pros: Low execution costs
Short preparation period and low preparation costs.
Not constrained by existing bond covenants.
Faster realization of savings from the new lights.
o Cons: Higher cost of borrowing.
Public private partnership
o Pros: Some risks shifted to SPE (fund raising and light repairs).
Possible lower total costs (if the SPE can sell services to others).
o Cons: Long preparation period.
Higher cost of capital for the SPE.
Complex documentation may delay or cancel the project.
Slower realization of savings from the new lights.
Government grants and incentives
o Pros: Grants may reduce the city’s costs for the lights.
o Cons: Long preparation period.
Risk that grant may not be approved or that grant budgets may get cut.
Slower realization of savings from the new lights.
In conclusion
There are many financing options available to communities to fund lighting system upgrades, and Signify, through its Signify Capital arm, is here to work with community partners to help arrange and implement these, or other custom options that fit your community’s unique needs. To learn more about how Signify can help you start lighting your community the smart way, contact your Signify sales representative, or email Signify at enterprise@signify.com.
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