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The Lighting Retrofit Investment

With some basic math, one can see how converting their commercial lighting system to be more energy-efficient can lead to big returns.

kWh Rates, Reduction, & ROI

To find out how much your company spends on lighting each month, you will need to identify three values: How much your utility provider charges per kilowatt hour, how many hours per year the lights are on, and how many watts your lights use. The formula would look like this:

[((Lighting System Watts) * (Annual Hours)) / 12000] * (kWh Rate)

Of course, some lights will burn more than others during the day and all of that is taken into consideration when we perform the lighting survey. However, let’s put some hypothetical numbers on it to see how the savings add up…
Let’s say your company has (40) 4-Lamp T12 Fluorescent Fixtures - that’s about 5760 watts (usually 144 watts per fixture), depending on the ballast type. Now, let’s assume that all of the fixtures are on 50 hours per week. That’s 2600 annual hours. Lastly, let’s say your utility provider charges you $.10 per kWh.  When we plug the numbers into the formula, we get:

[(5760 * 2600)/12000] * .10 = $124.80

The monthly cost to run those (40) fixtures is $124.80.

Now, let’s look at a common retrofit for those (40) fixtures, run the numbers, and see what kind of savings we can generate:
Converting those fixtures to a 3-Lamp T8 and reflector fixture would reduce the watts to about 72 watts per fixture:

[(2880 * 2600)/12000] * .10 = $62.40

We have now cut the energy use in half and are saving $62.40 per month, or $748.80 per year. Now, let’s assume the material and labor costs $2000. The savings of $748.80 per year will take 2.67 years to pay off the initial investment. That’s an annual ROI of 37.5%! And the savings will continue for as long as you maintain your lighting system!

*While most businesses have a variety of fixture types, energy savings will vary fixture to fixture, but it is not uncommon to see an ROI between 25-45%! Buildings that operate 24 hours a day would enjoy an even higher return.

The Additional Benefits

Watt reduction = Bill reduction is the obvious equation, but what are the other, associated ways to gain?

Runtime Reduction

Reducing the watts in the fixture is a great start, but reducing their runtime hours can be even more cost-effective. Occupancy sensors serve this purpose well. They will turn the lights off in a room where no motion has been detected for a set period of time (10-15 min.). In many commercial environments, the installation of occupancy sensors has shown to decrease runtime hours throughout the day as much as 30%. When factoring those additional savings into the formulas above, one can see how significantly runtime reduction affects the annual savings, payback term, and ROI!


Productivity

Studies have shown that businesses with proper, evenly lit workspaces experience increased productivity, safety, health & well-being amongst their employees. While these improvements do not adjust one’s electric bill, consider the revenue that might be accrued by increasing productivity by 10%? How about reducing injuries in the factory by 50%? What is the value of a measurable improvement in workplace morale and enthusiasm? All of these factors contribute directly to a business’ bottom line and are all improved by proper, clean lighting.


Let L&S Enterprises, LLC help your business enjoy the savings and returns of an updated lighting system. Call us today to learn more about one of the best investments your company can make.

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