LED commercial lighting retrofits across the country continue to produce savings, offer truer, whiter light, and reduce long-term labor costs.

Utilities benefit as commercial customers cut lighting energy costs by 50-80 percent and more. The need for power plant expansion and new plant construction is reduced. As a result, utilities are often incentivizing retrofits with utility rebates to an impressive degree.

For example, a PEPCO rebate in a Maryland gas station canopy retrofit was a substantial $4500. This lead to an unbeatable value for the customer. In the case study, (18) 360 watt HID lamps in the canopy were replaced. The combined wattage of those 18 lights was 6480 watts.

The monthly cost to run just those dozen and a half bulbs 12 hours a day really added up. At $0.11/kWh, the monthly cost was $265.

When these HIDs were replaced with retrofitted LED Lighting, wattage was trimmed from 6480 down to 1152. This reduction was achieved through the use of (18) 64 watt High Output LEDs.

And the cost to operate those new LEDs 12 hours a day? Just $47 a month (12 hrs/day at $0.11/kWh), a savings of $218/mo.

The overall cost of materials in this LED retrofit was $9432; the cost of labor to do the conversion was $1080 (18 hrs x $60). 10 percent of this total, or $1051, was the down payment.

The owner qualified for 5-year ‘lease-to-own’ financing, which resulted in a monthly payment of $232. A five year term was selected in part because the manufacturer’s warranty covered that entire period.

In terms of cash flow, the rebate of $4500 was paid at the conclusion of the retrofit. Minus the initial down payment, the owner realized an initial net gain in cash flow of $3448.

With a 10 percent lease buy-out at the end of the five year lease, the final net gain is reduced by another $1051, to $2397.

Meanwhile, the owner’s net payment each month over the 60 months was exactly zero. His previous cost to light the 18 HIDs was $265/mo. His new cost to illuminate the 18 LEDs was $33/mo. His monthly lease payment was $232, so his total cash outlay each month was exactly the same as before: $265.

So, the gas station owner enjoys a net gain of $2397 over the five year term of the project. But, after the five years, the savings skyrocket because the lease payment goes away. So, the new monthly cost in month 61 and thereafter is $33, plus any rate hikes that may occur over time. Nonetheless, savings of over $2500 a year easily accrue.

The old HIDs were rated at 20,000 hours. The new LEDs are rated 500 percent longer: 100,000 hours. At 12 hours of operation per day, the LEDs are rated to last another 20 years beyond the initial five year lease term.

Conclusion:
In simple terms, the owner enjoys a net gain of $2397 over the first five years, and then at least that amount or more every year thereafter, for up to 20 more years. Also, the original HID lamps would have had to be changed about every five years. With the long-life LEDs, no labor costs are incurred at the five year, ten year, fifteen year, and twenty year points.

At the same time, the utility servicing this commercial customer could do so with about 80 percent less electricity for the canopy lights. Truly a win-win for the customer, the utility, and the environment.

For specific information as to how your business can benefit from a LED lighting retrofit, please contact us.