Does LED Lighting Have a Good ROI?

Does LED Lighting Have a Good ROI?

By Leah • Jan 10th 2022

If you are the proprietor of an industrial building, then you will know managing costs is no easy feat. Even when your product is selling or output is steady, your overheads can add up. Lighting is only one of many budget items which you need to balance, but not all have the technological advancement to make upgrading worth the ROI. LED lighting is different.

Is LED Lighting Prohibitively Expensive?

As with any new technology, the development of industrially viable LED lighting was a progression. While the benefits compared to other lighting technologies, such as high intensity discharge bulbs (HIDs), were evident from the start, it cost money to reap these benefits.

With the progression of these new technologies, however, affordability also develops. While LED lighting may have been prohibitively expensive at one stage, it is now incredibly competitive. This is so much the case that new commercial developments are increasingly using LED as their default lighting system. Some estimates believe LED lighting will make up as much as 75% of all lighting sold by 2030.

How Does Installation Affect ROI?

If you are upgrading to a new technology, it means an old technology will have to be replaced. When this technology comes in the form of HIDs such as metal halide or high pressure sodium lamps, then they will have to be replaced eventually. The nature of HIDs means they will burn out once the arc uses up all the materials in the tube of the bulb.

However, the fixtures may be a different matter. To generate the power in an HIDs arc-tube, you have to use ballasts to control the flow when they are turned on. LED lighting only uses a fraction of the electrical energy HIDs use, so they do not need a ballast. This can be tricky if installing a new bulb.

The difference is LEDs have been made to adapt to current fixtures. Some of them are direct replacement. For DR the bulb fits right into the fixture without any rewiring. Others can be retrofitted. This means the bulb is put into the same fixture, but the ballast is bypassed and the wiring can be adapted to the new bulb with minimal hassle.

Some LED lighting requires new fixtures, but they still come with worthwhile benefits. In terms of ROI, new fixtures may take a little longer to pay for themselves, but they eventually will. How your ROI will be affected depends on your specific facility and its needs.

Once Installed, How Does LED Benefit My Business?

Once the investment has been made and you have upgraded to LED lighting, the benefits can be seen almost immediately. Firstly, LED lighting is much more durable than metal halide lamps and others. The brightness of LEDs is better and more consistent for years to come, and the bulbs have unmatched longevity. This means the bulbs will last much longer, so initial investment pays off much longer.

Not only are LEDs longer lasting, but they use up to 80% less electrical energy compared to HIDs. Your monthly bills will be down dramatically, seeing your return on investment in action. They also waste much less energy in terms of heat, which can have significant impact on other resources such as air conditioning and coolant systems.

Your ROI on an upgrade to LED lighting will depend on the specifics of your business. However, many estimates see this lighting system paying for itself in a few short years. If you plan on keeping your business for the long haul, then you can't miss out. With rebates, government incentives and tax deductions using LED, the deal could be even sweeter. To find out your ROI analysis now, contact OEO for an estimate.