Whether you are looking at an LED lighting retrofit or upgrade you’re in luck! Now is the perfect time to start the process of upgrading your commercial property’s lighting.
In this guide we are going to lay out the top 5 benefits of switching to LED lighting.
1. LED lights last much longer than traditional bulbs
Firstly we have to define how LED and traditional lighting’s life spans are measured:
Average Rated Life (ARL): ARL of a lamp or a bulb refers to the time it takes for exactly half the bulbs (50 percent) of a test sample to die out while the other half continue to burn. The Average Rated Life of a light bulb is also popularly known as half-life. We express this in hours and it is an indicator of the longevity of lights.
LED Useful Life: To provide an appropriate measure of useful life of an LED, a level of acceptable lumen depreciation must be chosen. At what point is the light level no longer meeting the needs of the application? Research shows that for commonplace lighting the majority of occupants accept up to 30% of light level reductions with little notice, particularly if the reduction is gradual. Therefore a level of 70% of initial light level could be considered an appropriate threshold of useful life for general lighting. This is sometimes abbreviated to L70%.
The following is a list of the average rated life from a report by the US Dept of Energy of most types of bulbs you see today and the useful life of LEDs.
Incandescent 750-2,000 hours
Halogen incandescent 3,000-4,000 hours
Compact fluorescent (CFL) 8,000-10,000 hours
Metal halide 7,500-20,000 hours
Linear fluorescent 20,000-30,000 hours
High-Power White LED 35,000-50,000 hours
In addition to LED lights lasting longer than their counterparts, they are also quite more durable. Incandescent and fluorescent bulbs break considerably easier than LED lights, making LED lights a better fit for commercial environments e.g. warehouses or manufacturing businesses.
2. You can save a lot of money switching to LED lighting in commercial facilities
With more and more of the market switching to LED, they have been getting cheaper and cheaper. While LEDs are still generally more expensive than traditional types of bulbs, they quickly pay back the initial investment to upgrade/retrofit and become a source of positive cash flow. Here are all the ways you can save by switching to LED:
Electricity Savings
LED lights are up to 90% more efficient than their counterparts. This means you will use less energy to light up your building and in turn will pay less on your monthly electric bill from your utility or supplier.
On top of this, because LED lighting is so much more efficient, you can often find incentives offered by utilities that you can take advantage of.
To roughly calculate your annual savings, use this equation:
Number of bulbs x annual hours of operation x wattage reduction per bulb ÷ 1000 (converting to kWh) x electric rate per kWh.
So an example office would look like this:
500 bulbs x 2,600 x 10 watts ÷ 1000 x 0.10 = $1,300.00 annual savings.
This will vary if some weeks the lights were on more or less than normal. If you are on a variable rate, your bill will also rise and fall with the energy market.
LED lighting also produces very little heat and as a result helps keep buildings colder, saving your money on cooling.
Maintenance Savings
In my experience businesses often forget about the costs associated with maintenance. But in reality there are 3 major sources of savings besides using less electricity.
Replacement costs: Since LED lights last considerably longer, you end up spending substantially less per year on replacements.
Labor: Once you’ve bought your replacement lights you have to have them installed and again, since LED lights last longer, you don’t need to hire an electrician or have an employee install lights as often.
LED lights don’t require a ballast: LED lights do not use a ballast at all so any any and all costs to purchase and replace them is gone.
If you are unsure how to calculate your maintenance savings check out this step by step guide.
3. There are tax benefits and incentives
There are often utility and local government incentives and rebates to switch over to LED lighting, an example of this is PECO’s lighting incentive that is available until 2026. Be sure to check with your local utility and state to see if there are any incentives.
There is a national tax deduction available called Section 179 and it applies to LED lighting. “The equipment, vehicle(s), and/or software must be used for business purposes more than 50% of the time to qualify for the Section 179 Deduction.” Seeing that lighting in places of business will be 100% or nearly 100% used for business, they qualify.
4. Your business may qualify for PACE financing
Property Assessed Clean Energy (PACE) is a source of financing for lighting, heating & cooling, insulation, motors, solar, fuel cells and water pumps. If your business qualifies, they cover 100% of the upfront costs and provide long term
fixed-rate financing.
For example New York has a PACE program that provides the following benefits:
Covers 100% of energy upgrade costs with no cash upfront
Provides long-term fixed-rate financing
Allows for retroactive financing up to three years after improvements are completed (no earlier than 5/19/2019)
Can be transferred if the building is sold
Can finance other project costs needed for installation, like asbestos and lead mitigation of roof upgrades
Drives energy savings and increases property value
If you are looking to upgrade to be more energy efficient and have an office building, industrial, agricultural, non-profit or multifamily property, you may qualify for PACE financing.
5. In many cases you can create positive cash flow immediately
Many LED providers offer financing options allowing you to get your project started with little upfront cost. In many cases the money saved by upgrading to LED is greater than the monthly finance payment.
If you combine this with any incentives your state or utility offers, you can really come out ahead.
Looking to get lower energy rates? If you are in a deregulated state we can help, get a free quote now!
