How Long Does It Take for an Industrial or Commercial LED Lighting System to Pay for Itself?

More and more, business in Durango are entering into ambitious lighting retrofit projects that are designed to reduce both their energy bills and their carbon footprint at the same time, while also giving them unprecedented access to lighting design and lighting control. But for many commercial and industrial companies, the cost of upgrading to LED lighting is prohibitive, and short-sided board members might be hesitant to approve the expense.

The truth about commercial LED lighting is that it can pay for itself in a relatively short amount of time, making it possible for most companies to justify one of the many financing options that are usually available. In Durango and across the country, LED light bulbs are helping CEOS and managers to embrace a more long-term vision of profitability green-friendly operations.

So When Will a Commercial Lighting System Pay For Itself?

There are a number of factors that come together to determine how long it will take to see a return on investment on a new LED retrofit. These factors include:

  • How many fixtures you have
  • The wattage of each lamp
  • The amount of hours each lamp is being used (both per day and per week)
  • The price of electricity in your area
  • An estimation of your current lighting maintenance costs
  • The technical specs for the new fixtures & bulbs

Using Kilowatt Hours to Estimate Your ROI on LED

The key to determining how long it will take for LEDs to pay for themselves is kilowatt-hours (kWh), or more simply, the measurement of how much energy you are using in total. Kilowatt-hours can be determined by any number of online calculators, but it is actually quite simply to do on the paper in front of you.

If you have 100 light bulbs in currently and your facility and they are each running 100 watts, than you have a total of 10,000 watts of lighting, or 10 kWh. If you use your lights for 100 hours per week, then you are consuming a total of 1,000 kWh for the month (10 X 100).

In other words:

Total System Kilowatts X Hours of Use = kWh of Energy Consumption

Because utility rates are generally charged in kWh, simply multiplying your estimated consumption by the utility rate and have a solid, actionable number you can use to plan for your new commercial LED lighting system.

But it is important to remember that one of the biggest ways that LED lightbulbs save companies money is through their extended lifespan, meaning that far fewer bulbs will have to be purchased over time.

Saving Money, Energy, and Time with an LED Retrofit Kit

If you are able to determine your current systems monthly kWh consumption and then compare that to an estimate based on the LED system that you are interested in upgrading to, you can simply subtract one from the other to find our just how much money you will be saving each month.