This is the first in a series of articles on smart and effective energy upgrades that will not only pay for itself and save significantly on energy costs (if done right), but will also result in other economic and productivity benefits. These articles will discuss technical issues, but will emphasize benefits, economic and others. There has been – literally – a revolution in energy technology in the past few years. If you have not had an energy audit done in the last 4 years, there’s a lot to gain by doing a comprehensive one.

For most, a great “low hanging fruit” for energy savings is lighting. Facility managers are increasingly turning to LED lighting technology to reduce energy costs. You probably already know that LED lights use well under half of the electricity of incandescents and T-12 fluorescents for the same amount of lumens. LEDs now can be adjusted and dimmed and come in a variety of colors (CCT ratings) to optimize their effectiveness. New LED fixtures can now fit right in place of the fixture being replaced. And cost savings are not “down the road”, but start immediately upon replacement.

Besides the immediate electricity cost savings, LEDs have other major advantages resulting not only in more money, but also in greater productivity. LED lights do not burn (unlike the other types mentioned) and last much longer. Typical office LEDs are warranteed for as much as 50,000 hours of operation. Given 12 hour/day, 5 day/week operation, that’s a little over 10 years until they have to be replaced; a lot longer than standard types. That frees up your office maintenance crew to do other things and reduces their number of trips up the ladder (reducing risk and inconvenience to staff).
In addition, the light from LEDs (if the right ones are procured) is whiter without the tints that other lights may have and has less glare. LEDs do not flicker, unlike fluorescents, reducing eyestrain. LEDs improve workers’ productivity. Here’s proof. A worker working through the morning will need to take at least a short break just because of eyestrain from the glare / flicker of fluorescents. The actions of an added break – walking down the hall to get water or coffee, returning, sipping the water/coffee, resting – before resuming work must take at least 5 minutes, and more likely 10, which is 2% of a typical workday. Avoiding such a break in the afternoon, and now you have a 4% improvement in productivity right there. And if the person taking a break stops to talk to a colleague, … Workers with lower eyestrain need to take fewer breaks and are thus, by definition, more productive and effective, all because of improved lighting – a significant and real added economic benefit to installing LEDs.

Of course, there is a cost involved. While LED prices are dropping, for a large office, warehouse, or multifamily residence, the upfront cost may be six figures. However, in many places, incentives exist to pay you back some of these costs and low interest loans are available so you can install LEDs without having to pay anything upfront. You can pay back these loans from the cost savings as they are earned. Waiting for LED prices to drop further is not a good idea. Incentives do go away and the energy cost savings (70% or greater) that you will achieve will likely be greater than the probable future reduction in LED prices. If you wait even one year, that’s one more year of high electricity costs to pay. So now is the time. If you think you can only afford to convert only part of your facility to LEDs right now, then consider which areas currently have the oldest and highest energy usage lighting and have the greatest number of workers who will benefit from reduced glare and no flickering.

A word on economics. Most companies want to know the payback of the upfront cost of LED procurement and installation. It will vary based on the number and the types of lights being replaced and can range from under one year to over 4. Some companies have policies on payback (they will not approve a project if the payback is more than X years). But remember, payback is only one way of measuring economic benefits. Let’s say there is a proposal to replace lights with LEDs at an upfront cost (after incentives) of $120,000, and the payback is on the high end of the range, say 3 years, beyond company policy. In 3 years the company will have gotten its $120,000 back. But the company has at least 7 (and likely more) years to reap extra money. If anything, the energy savings later on will be greater than $40,000 per year for two reasons. One, the future unit cost of electricity (cents/kWh) will likely increase, by 3-4% per year typically. So, in 7 more years, you will have avoided at least $280,000 (and more likely between $350,000 and $400,000) in costs. Even assuming the lower figure, by implementing this project (and spending the $120,000) your company will have saved $280,000 minus $120,000 or $160,000 over a 10 year period. The rate of return would conservatively be 13.3%/year. Tell me, does your company earn a rate anything near this for its cash? The second reason is that your existing lights will need to be replaced anyway – likely several times during the 10-year period. You will need to pay that capital cost, which could easily exceed the $120,000 for the LEDs – and you won’t get the cost savings.

Finally, buy smart. There are a growing number of manufacturers of LEDs. Some produce better quality lights than others. Do not buy on price alone. An energy professional can help you assess just what your lighting needs are, exactly what lights need to be replaced, the best LEDs to do so, manage the installation, and help you get the proper incentives and financing (if needed) you are entitled to. Maximizing these and the other benefits and ensuring reliability is worth the cost of an experienced expert.

CCES has the experts to help you plan out a lighting upgrade to maximize not only your energy cost savings, but also the productivity improvements and maintenance reductions. We can help you design the right lighting to maximize productivity with the least interference. We can plan and buy smart for you, resulting in the greatest benefits to make you look good. Contact us at karell@CCESworld.com or at 914-584-6720.