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OSPi can be powered by 12VAC supply and that’s not a problem. But 12VAC is probably not sufficient to drive sprinkler solenoids if you plan to use the same controller to drive both solenoids and LED lgihts.
Another option is to use two separate power sources: one 24VAC to drive solenoids, and one 12VAC to drive LED lights. You can have one of them power OSPi too. They need to share a ground pin. Say you use 24VAC to power OSPi. To use 12VAC to drive LED lights, you connect one wire from 12VAC to the top pin of the orange terminal block (that pin is connected to circuit ground). The other wire from 12VAC will be the common wire for LED lights. If you have multiple LED lights, one wire from each of them will come together and go to the common wire of 12VAC. The other wire will go to an individual station port. This way, when a station turns on, the triac completes the circuit from 12VAC to LED light, thus turning on the light.