With over five years’ experience in upgrading businesses from old technology to new solid-state lighting technology we have a pretty good feel for what makes decision makers decide to adopt LED lighting. Some decisions make good sense and some decisions make real good sense.
And during those five years we have seen the lighting business transform with seemingly never-ending new insights. New products and new technologies require that buyers take the time to understand what they are purchasing. Like any decision, advice from experts is valuable and should be sought.
Many LED buyers and sellers are deeply focused on the payback period. How long after I pay for these lights will my investment be returned from savings in energy costs, future maintenance and even the benefit of tax savings? These benefits should no longer be the driving force to plan a solid-state lighting upgrade. Sounds like a bold statement and two years ago it would have been wrong to say that. That was then…….this is now.
But thinking of ROI, because it still weighs heavy in the decision process, you should think of these factors:
1. Incentive rebates from utilities have the first big impact.
a. Be sure the product you are considering qualify for the best net impact on product cost. For example, if the product costs you $120 and you can earn a $60 rebate this is a big winner.
b. Be sure to include sensors and controls as they earn good bonus rebates, in some cases they can increase incentives to the point of almost covering all the cost.
c. Rebate funds can get depleted so be sure your plan can fit available funds
2. Energy savings can only be estimated because current use is not tracked by a meter but is based on the fixture and the hours they are on. (Hint: even when fluorescent tubes are out the fixture is still using the energy). Energy savings estimates should be conservative.
3. Maintenance savings should be calculated by what it will cost to maintain your current lighting going forward over the next 5 years or even more. Be sure to consider the warranty on the LED lights when making this comparison.
4. Ignore tax savings. While you can write off the cost of the lights in the first-year, savings in utility costs over time results in an improved bottom line and potentially increased taxes.
When I say some decisions make good sense, I think of the company that does an upgrade just because they can reduce energy costs. The decision makers will purchase as inexpensive a product as they are comfortable with, often just retrofitting an existing fixture with new components. Not bad but also very limited both by older technology and shorter life expectancy.
When I say some decisions make real good sense take for example an auto dealership we upgraded. First, they decided they needed new lighting because the existing lights had many failures. Their next decision was to order all new lights instead of just replacing components which gave them the ability to add custom sensors and controls. Thereby not just saving them the typical 40-50% in energy consumption but realizing another 20-30% in savings because lights automatically dim and then shut off when there is no activity. That’s right, 80% savings over the previous system. And with LFL their maintenance costs for lighting completely went away.
And when I say that the ROI should no longer be the driving force for a lighting upgrade it is because the newest generation of solid-state lighting is so advanced that the human benefits far exceed the financial gain from energy savings. We have learned that people are healthier, happier and perform better when working around the proper lighting. We have learned that with new controls light is never wasted and can be tuned to the task at hand. And finally, we are learning that wireless communication in a local area will be through lighting as light is all encompassing in commercial buildings.
When you install the newest generation of LED lighting you will be able to harvest future savings and greatly expand new and exciting technology for business. Enter the IoT (Internet of things). If you just do component retrofits or install inexpensive “discount” old technology, you will be stranding future savings.
You can expect new LED lighting to service your business for 10-20 years if you install the right luminaires. Two-year payback is quickly forgotten. But lights with no features and no future potential that fail in 3 or 4 years become an aggravation and expense that you don’t need.
Professional Lighting Upgrades are not about the fixture. They are about the ambient light and what it can do for your business.
The decision to upgrade lighting is usually made first and foremost because the existing lighting is failing and not doing the job. Take a close survey of all your lighting. Over the years has tube replacement resulted in different color light? That’s bad. Are many tubes in fixtures not working? That’s worse, you are paying for nothing. Are there dark spots and lots of shadows? Really bad, as employees can not give you 100% under these conditions and you are dealing with inefficiency and errors, no matter the task.
Then ask yourself why you have not done an upgrade. If you have a legitimate reason, you’re the first. Because there are no legitimate reasons to not upgrade to solid-state lighting.
For the best service and the newest generation of LED lighting contact the Philips Certified Professionals at Lumens For Less, Inc. We are glad to walk through the process with you and answer any questions, address any concerns.