The Financial Benefits of LED Lighting for Commercial Businesses

The Financial Benefits of LED Lighting for Commercial Businesses

In addition to savings associated with LED technology, there are multiple financial advantages that commercial businesses can take advantage of. Following is a list of savings businesses can reap by converting to LED lights or using LED lights in their new projects.

1.Energy Savings

The efficiency of a light source is measured by comparing how many watts it uses to produce lumens. This ratio is very similar to the units used by car manufacturers (miles per gallon) as a measure of efficiency. Old lighting technologies, such as incandescent lights, fluorescent, metal halide, or high-pressure sodium, produced lower lumens per watt. With LEDs, especially newer technology LEDs, the number of lumens per watt can be as high as 180 lumens/watt. For example: If 50,000 lumens are needed to light up an area, with LED producing 150 lumens/watt, you would only use 333 watts (50,000/150). With metal halide, the typical lumens per watt was approximately 75 lumens/watt. This means that to produce 50,000 lumens, metal halide would use 666 watts, which is twice as much as what LED would use. This is fifty percent savings on energy usage.

Furthermore, with metal halide, fluorescent or incandescent technology, the only way to produce light was to use a lightbulb as the light source. Since the lightbulb emits light in all directions (360 degrees), cumbersome reflectors were used to direct the light to the targeted area. Since reflectors are not one-hundred percent effective, a considerable amount of light was lost to the environment. This means you needed to overrate the lightbulb to get the required light amount into the target area. Since LEDs are directional light sources, the need for cumbersome reflectors is eliminated. This makes LED lights more sleek and less heavy, and more appealing to the eye while reducing the manufacturing cost as well as the amount of energy used. This translates into immediate savings on your electric bill—both for indoor and outdoor lighting.

2.Indoor energy savings

When it comes to lights used inside a building, the old technology (fluorescent, incandescent, halogen, or metal halide) produced much more heat than LED technology, causing an increase in utility bills - especially in summer or hot climates. LED lights produce much less heat which results in additional cost savings.

3.Free Money

Since LEDs are much more energy efficient, many utility companies provide substantial rebates for switching to LED technology. This translates into cost savings and is almost like buying free LED lighting with the assistance of the utility company. These rebates vary from region to region and from utility to utility. Please check with your local utility company for further details.

4.Maintenance savings

Before LEDs, the old lighting technology meant that after the bulbs were installed, they would start losing their brightness quickly as time passed. For example, if used daily, a metal halide bulb would lose close to 50 percent of its initial brightness during the first two years. This meant they needed to be replaced regularly, creating labor and equipment expenses -- materials (new bulbs) and maintenance expenses. LEDs are expected to last over 10 -15 years with minimal lumen depreciation, resulting in substantial maintenance savings over time.

5.Savings related to lighting controls

Before LED technology, most commercial businesses used HID (high-intensity discharge) lights. The biggest drawback of HID technology was that HID lights could not be turned on or off instantly. They used old ballast technology, meaning it took up to a few minutes for them to heat up and come to full power. This major drawback eliminated the possibility of using any controls to turn them on/off or to dim them. With LEDs, all that changed, and a new realm of possibilities evolved. Since LEDs are instant on/off, lighting controls such as motion sensors or dimmers can be utilized, meaning that energy savings can be achieved by keeping the lights at full power at certain times and dimming them to a certain percentage when no one is around. For example, an auto dealership parking lot has hundreds of light fixtures to light up a couple of acres to prevent crime; if lights are left on all night, the utility bill would be significant, but if lights go to 50 percent brightness at 11 at night and if they also have a motion sensor on them, if intruders come into a parking lot, not only would they come up to full power, that would deter the intruders. Safety and aesthetics are not compromised. This is one of the most significant advantages of LED, so much so that cell phone or laptop apps can control entire properties. You can make changes remotely.

6.Cash flow benefit

Because LED lights are so efficient and will pay for themselves in a few years, private companies, other than utilities, have leasing programs for customers to switch to LED lighting by amortizing the project over time. You might consider exploring local companies offering financing so that you don’t have to spend money upfront. This frees up cash to utilize in other areas of your business.

7.Tax benefits

In addition to federal exemptions, there may also be local state tax exemptions associated with energy-saving investments meaning that when you invest in LED technology for your business, you may qualify to take advantage of such tax incentives – local and federal. You should check with your accountant for further details.

8.Attracting more customers

  • For new construction or for renovating older buildings, LED lights create a sparkling and attractive look for the business, differentiating you from others who did not switch to LED… Your parking lot is brighter. Your college attracts students. Your hospital parking lot is safer.
  • Color-changing lights are possible with LED. Old technology used films or reflectors, which were static and cumbersome. New LED technology called RGB allows facade lighting for buildings to change colors and make the building come alive and make them more attractive. This allows buildings to get creative and use color-changing LEDs to create more traffic.


Given all these possibilities and advantages, you still need an expert that can help you guide you through this universe of opportunities; LightMart representatives are experienced, ready, and available to help you. 

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