cost savings of led lighting

What’s the ROI on LED? (Plus: ROI Calculator)

Maury Scruggs Blog Leave a Comment

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How many people does it really take to change a light bulb?

Well someone has to buy it. Someone has to get it to the office. Someone has to get it from the storage closet. Someone has to get a ladder or lift. Someone has to climb up to change it. Someone has to put all that away…. You get the picture.

So perhaps the question isn’t how many people will it take, but how long will it take and how much will it cost?

Well, the average LED bulb lasts 20x longer than incandescent and 5x longer than CFLs. Not only do LEDs last longer, they can:

  • Reduce light consumption by up to 90%
  • Improve your employees’ productivity
  • Decrease your employees’ stress and headaches
  • Increasing building safety and security
  • Reduce energy expenses

Initially, LEDs are more expensive, this is because they are an investment. Long-term they have the potential to save you money. As with all investments though the big question is, how long will it take for you to break even or see a return?

There are a lot of variables but the ROI on your LEDs is fairly simple to estimate. You just need to know a few numbers to get you started:

  1. Hours per day your lights are on
  2. Days per week you run your lights
  3. Number of existing light fixtures
  4. Type of existing light fixtures

I could bore you with some math equations that you could do by hand, or you can head on over to our LED ROI Calculator and plug-in those four numbers.

At the bottom, it’ll spit out your ROI.

Running the numbers really puts things in perspective. Yes, the upfront cost is steeper but long-term it makes the most sense. Using any lights other than LEDs is just reckless.

Don’t take these numbers as gospel though. Remember those variables I mentioned earlier? Those could change your results pretty drastically. We didn’t take them into account before because these variables are hard to factor in without knowing more about your specific situation.

Click here to set up a meeting so we can determine if LEDs are the best fit for you.

Being aware of these variables can help you get a better understanding of what your real savings will be. Keep reading so you can determine how accurate your projections are, and make sure you adjust accordingly.

Current Bulb Lifespan

Incandescent bulbs have an average lifespan of 1200 hours. If you run your lights for 12 hours a day you’ll need to change them every 3 months. If you want to know where you currently stand you need to consider not only the hard cost of all those new bulbs but the cost of getting someone on a ladder or lift to change those bulbs over and over again.

So if you’re going to be changing those bulbs soon anyway, you might as well change them to a bulb that will last longer. If this is the case, then you don’t need to factor installation costs into your transition to LEDs.

Initial Investment Factors

Not only will you have to buy the LED bulbs but other upgrades may be required as well. If you are remodeling existing lighting then you may need a switching device or surge protector. If you have new construction then you need to factor in the labor required to get everything done.

Geographic Electricity Costs

Electricity prices vary depending on your circumstances. Your geographic location is the largest determinant. Factors like what time you use it, what month you’re in, and your provider influence costs as well. Fluctuating electricity costs can influence your annual savings, payback period, and ROI. Imagine how much each project could vary when we consider the following data provided by Electric Choice.

  • The national average in the United States is $0.10/kWh.
  • The lowest rate is in Nevada at $0.07/kWh.
  • The highest rate is in Hawaii at $0.26/kWh.

Clearly, your projections would look very different if you lived in Hawaii!

Rebates

If you qualify, your switch to LEDs could be eligible for a rebate. This would reduce your investment costs. The requirements vary from state to state and some are more difficult to get than others. Check out this map to find policies and incentives in your state.

 

As you can see, there is a lot that plays into determining your ROI on LEDs. So, even though our calculator gives you a nice estimate there are variables that a simple calculator can’t factor in. If you’re interested in discussing specifics for your project please fill out our Contact Us form to set up a meeting.

Regardless of how you cut it though, the benefits and savings far outweigh the costs. So what are you waiting for? It’s time to make the investment in LEDs.

Find out how much you could be saving on yearly energy costs.

LED Retrofit ROI Calculator

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