Do LED Lights Really Save Money?

LED Lowcountry furnished LED light fixtures for a new Port City Logistics warehouse in the Savannah area. The lighting had originally been specified using conventional lighting fixtures. The owner had recent experience with an LED retrofit project in an existing warehouse facility and decided to go with LED.

“LED lighting is the wave of the future-it has been a huge benefit for us. The savings have been in the neighborhood of 65-75%-a no brainer when it comes to operating a business.” — Billy Robinson, CEO

LED Lights Project Description

We understand that business owners are always looking for ways to reduce costs and generate new revenues to make their businesses more profitable.  With this in mind. we provided a lighting assessment to identify the long term financial impact of converting from traditional lighting to energy efficient LED.

The new warehouse is a 232,000 SF facility including offices. We recommended a one for one replacement of each fixture with LED. The warehouse was to be used for a variety of purposes including rack storage. Our lighting level objective was to provide an average of 20 foot candles throughout the space. Each fixture was equipped with a motion sensor that saves about 50% more energy in an active warehouse environment. The economics were based upon 50 hours of operation per week and an electric rate of 12 cents per kWh. The recommended fixtures qualified for a $25,000 utility rebate and the owner received a $42,000 contractor credit for the original lights. We were ready to run the numbers.

The project overview provides an analysis of the total material costs, energy and maintenance savings, simple payback, net present value, and return on investment.

LED Lights Project Overview

LED Energy Usage & Costs

Over time, the largest single cost for lighting your facility is your energy costs. It is critical to understand how much energy you are using and what it is costing you. Presented below is a summary comparison of the difference between conventional lighting and the proposed.

Energy Comparison

The table below is a lighting wattage comparison by fixture and hours of operation. Office hours are 50 per week, exterior wall packs are 12 hours per day on photo cell, and emergency lights 24/7.

LED Lights Operational Overview

While energy is the largest long term cost of lighting, the cost for maintaining your lighting system can be a significant expense of your overall lighting expense. The summaries below provide a dashboard of projected and overall anticipated operational savings.

LED Lights Operational Saving Summary

LED Lights Project Financing

Based upon the numbers and the results from a previous project the owner decided to go with the LED lights. The remaining question was how to pay for the net cost of the upgrade. The owner decided to use a part of the projected electric savings to pay for the lights. We worked with one of our financing partners to facilitate a 60-month lease secured only by the installed equipment. The equipment lease covered the lights and rebate. The owner not only improved lighting to energy efficient LED but did so without going out of pocket.  The $25,000 rebate was sent from the utility directly to the owner.

Learn more about financing options for your lighting project.