LED lighting can save business owners money in a variety of ways, including the following:
- LEDs reduce energy consumption and energy bills
- LED lights can be precision-controlled to reduce costs further
- LED bulbs last longer, so fewer replacements are needed
- Tax incentives can reduce the cost of installing LED lighting
Together, these benefits can provide a quick return on investment (ROI), especially for business owners who operate large commercial properties.
How Much Money Can LED Lighting Save Business Owners?
To get a detailed idea of a company’s savings, a consultation with a lighting expert is a great first step. During consultation, the lighting team will perform a site survey, noting the age and condition of the existing lighting equipment. They will also determine the number and types of fixtures in the facilities. With this information, the lighting expert can provide a detailed estimate of the LED lighting system and what the company stands to save by making the switch.
There are some general guidelines that can be used to roughly calculate the potential savings for the business.
The Center for Climate and Energy Solutions states that companies spend about 20 percent of their total energy bill on lighting. For some businesses, that number may be as high as 40 percent.
Compared to legacy lighting systems, LED can cut energy usage by up to 80 percent. So, if a business spends 20 percent of its energy on lighting, switching to LED lighting could immediately trim 15 percent or more from its utility bills. Depending on the size and nature of the facility, that may mean thousands of dollars every year in energy savings.
But that is only one part of the picture because LED lighting provides a couple of other notable cost benefits. Specifically, here is how LED lighting can save a business money:
1) LED Lighting is More Energy Efficient and Costs Less to Operate
As previously mentioned, LED lighting can greatly reduce energy usage and utility bills. LED lighting systems achieve this in two ways – at the source level and at the system level:
- Source level – At the source, LED lamps have a modest, but significant energy efficiency advantage over metal halide and fluorescent fixtures (both of which are being discontinued). On average, LED’s luminous efficiency (the lumens it puts out per watt) is around 100, and current generation LEDs are already pushing past that. Fluorescent and metal halide lights range between 50 and 100 lumens per watt, but both decline rapidly and do not retain their out-of-the-box luminous efficiency for long.
- System level – LED’s energy efficiency advantage is mostly captured at the system level. LED fixtures emit light directionally, which makes it easier to position the bulb for maximum effectiveness. It can be aimed, which means more light reaches the intended target. If the lighting installer can do photometric analysis, they can use LED’s directionality to minimize the amount of power needed for the system. Other lighting technologies are omnidirectional, which means they emit illumination in every direction. This leads to a significant amount of waste and reduced system performance. The only way to compensate for this is to attach bulky reflectors onto the fixture, for an additional cost.
2) LED Lighting Systems Can Be Controlled to Boost Energy Efficiency
LED lighting is a modern technology adapted for modern lighting controls, which can unlock another level of energy efficiency. For example, pair dimmers and occupancy controls together with the LEDs and they can dim up and down depending on whether someone is nearby. In areas where people are not active, the system saves additional power by reducing or shutting down fixtures that are not needed.
LED’s controllability makes it an ideal security lighting option as well. When occupancy controls detect someone, they can immediately power up the LED lights and ensure there is enough illumination for surveillance. In this way, LED lighting may save money by deterring crime.
3) LED Fixtures Require Near Zero Maintenance and Have an Unmatched Lifespan
Once installed, LED fixtures require near-zero maintenance to operate reliably, making LEDs an install-and-forget lighting option.
More importantly, LED lamps have a much longer lifespan compared to other lighting technologies. On average, an LED bulb will provide 50,000 hours of high-quality illumination before reaching the L70 threshold (the point where the light has lost 30 percent of its lumen output due to age). Some LED fixtures will last longer – up to 100,000 hours in some cases.
Fluorescent lamps hit their L70 mark around 20,000 hours, sometimes less. Metal halides wear out even faster, requiring replacement every 10,000 hours or so.
LEDs can operate continuously for several years before they need to be switched out. The business will save money by spending less on replacement lamps and by reducing maintenance-related overhead.
4) The Installation Cost of LED Lighting Can Be Offset with Tax Incentives
If the property qualifies, the cost of the commercial lighting project may be reduced significantly by tax incentives. The most impactful provision is Section 179D, which provides an immediate tax deduction for the cost of a new or retrofit energy efficient lighting system. The deduction may be as high as $5.36 per square foot, depending on how much power the new lighting will save (the full deduction requires a 50 percent reduction in energy consumption).
It is highly recommended that business owners consult with a trusted lighting company to determine eligibility for tax incentives and to calculate potential savings.
LED Lighting Saves Business Owners Money and Improves Lighting Performance
Through better energy efficiency, reduced maintenance, enhanced controllability and tax incentives, LED lighting can save business owners a good deal of money. Depending on the size and nature of the facilities, it could mean thousands of dollars to the company’s bottom line. Further, LED technology is the future of lighting and will ensure the system remains viable for decades.
If a business is ready to cut costs, speaking with a reputable lighting expert will reveal more on how LED lighting can save business owners money.
