Business Spotlight: Lighting the Way

James Young’s business is about making others efficient.

The owner of kWh Smart Consulting LLC, Young specializes in the design, sale and installation of energy saving equipment for commercial and industrial buildings. Nearly 18 months from startup, the company is riding a wave of success primarily with Arkansas-based clients.

Revenue settled at $875,000 during kWh Smart Consulting’s first full year in business last year, about three-quarters related to LED retrofits and new construction. Commercial refrigeration and HVAC optimization made up the rest. With three projects on the books so far this year – each in an Arkansas school district – Young projects to increase revenue to $5.5 million in 2016.

“It’s a little scary,” Young says. “That kind of growth – most of the time – is not sustainable. You have to find the middle ground where your progress is constant.”

A key aspect of the consultants’ service is energy auditing and consultation, starting with a complete blueprint of the space and recommended changes, but also researching and applying for energy efficiency incentives.

“It’s not just about energy efficiency or better lights. It’s a paradigm shift in the way businesses are starting to look at operating costs,” Young says.

Green lights
From start to finish, the entire process can be as quick as a few months of design and two weekends’ worth of installation for small-scale retrofits such as a Berryville, Ark., branch of First National Bank completed last fall. For larger clients – think school districts and property management companies – the job might be split into multiple three- or four-month stints.

The staggered method worked best for Harrison, Ark.-based Winkler Logistics Center, which operates a 1 million-square-foot complex leased to manufacturing and warehousing companies.

Director of Operations Jeff Pratt says the company hired kWh to change 600,000 square feet of space to 100-watt LEDs from high-pressure 400-watt sodium bulbs. The work was completed in two stages between 2014 and 2015. The ability to gain roughly $150,000 in combined incentives from the Arkansas Energy Office and Entergy Arkansas Inc. made the initial $700,000 price tag worthwhile.

“Grants are very confusing, labor intensive and if you don’t know what you’re doing you wont get very much,” Pratt says, calling Winkler’s usage rates post-installation a “slap-in-the-face” difference.

“We’re using about one-fourth of the electricity for more lighting than what we used to have.”

Young says the “green” mindset is starting to catch on for the company in other markets outside The Natural State, expanding kWh in Missouri, New Jersey, Kentucky, Louisiana and Texas. In the Show-Me State, kWh finished the year with an LED retrofit on interior and exterior lighting at Hollister City Hall.

City Administrator Rick Ziegenfuss says finding a cost-cutting solution was necessary because the building’s electricity is used 12-14 hours a day by city staff as well as community organizations and boards at night. To maximize the project’s affordability, the city hired kWh for every phase except installation, which was handled by local contract electricians.

“We have a little axiom we go by: Let Wilbur and Orville fly for a while before you buy the airplane,” Ziegenfuss says, noting the city earned an $8,600 rebate – precisely what kWh quoted – on the roughly $17,000 job. “We needed that professional assistance to make sure everything worked and to take advantage of the benefits.”

He expects to recoup another $8,400 in two years through energy savings.

Balancing the circuit
Here’s Young’s challenge: If kWh does its job right, the longer life of light bulbs and refrigerator units likely eliminates opportunities for repeat business.

Maintaining steady growth, then, is a balancing act, he says. Sometimes it means finding new types of projects to broaden the customer base and in other cases having to turn down jobs in order to avoid spreading 14 staff members too thin.

In May, the company plans to start a pilot project on a courthouse with the Arkansas Historical Association and Lee County, Ark. The task is to perform an energy efficiency changeover that will update the building’s lighting technology while preserving its historic ambiance. Preliminary research and design work alone earned kWh a recommendation from the association to take on similar projects in 71 counties across the state.

While it’s the kind of work Young enjoys as an artistic challenge, he says it might be too much for the company to take on at this stage in the game.

“When you start seeing a measure of success, you’re afraid that will come to an end quickly,” Young says. “Part of being a business owner is knowing when to take business and recognizing when your plate is full.”