Model 06 · Own the asset, sell the light
Lighting as a service
Keep ownership of the luminaires and charge a monthly fee per pole, with maintenance included, over five to seven years.
The client has no capital budget but does have an operating budget. You own the hardware, keep it lit, and get paid monthly. It is a finance business with a maintenance obligation attached.
Who this suits
Operators with access to finance, a maintenance van and a client that pays monthly.
How the model runs, step by step
- 01
Audit the road and the payer
Technical audit for the lighting design; financial audit for who signs the monthly payment and what happens when they change office.
- 02
Model the fee
Capex per pole, cost of capital, maintenance, spares and collection loss. A fee that covers the hardware but not the van is a subsidy, not a service.
- 03
Sign a five to seven year agreement
Service levels, payment dates, indexation, termination and asset transfer at the end. Get the payment mechanism into the contract, not a side letter.
- 04
Install with remote monitoring
Every unit reports daily. A dark pole should appear on your dashboard before the client writes an email.
- 05
Maintain and renew
Quarterly inspection, annual battery check, five-year spares commitment. At year six, offer a renewal or a transfer price.
200 poles, illustrative
| Capex | 200 x USD 400 = USD 80,000 |
| Monthly fee | 200 x USD 10 = USD 2,000 |
| Monthly opex | Maintenance, spares, monitoring = USD 250 |
| Net monthly | USD 1,750 |
| Simple payback | About 46 months |
| Contract term | Seven years, asset transfers at the end |
Collection is the model. A 90% collection rate turns a 46-month payback into 51 months; a 70% rate turns it into a loss.
Where it goes wrong
| Risk | What to do about it |
|---|---|
| Payment risk | Escrow, municipal guarantee or a prepaid service account. Do not rely on an annual budget promise. |
| Theft and damage | Insurance, anti-theft brackets, and a clause that says who pays for replacement. |
| Technology change | A five-year spares commitment from the manufacturer, written into your supply contract. |
Before you order
- Technical road audit
- Payer and payment mechanism confirmed
- Service level and indexation clause
- Remote monitoring on every unit
- Insurance and theft clause
- Five-year spares commitment
Questions buyers ask
Answers before you write.
Is this common in Africa?
It is used for municipal lighting, estates, mines and campuses where the client has an operating budget but no capital line. The contract matters more than the hardware.
Who maintains the lights?
You do, and the fee includes it. That is the difference between this model and a hire-purchase agreement.
What happens at the end of the term?
Either the asset transfers to the client for a nominal sum, or the contract renews at a lower fee with a refurbished battery.
Run the numbers with us.
Send the model, the market and the price you think you can get. We will reply with the landed cost, the margin and the three assumptions that matter most.