Saving Money with Energy Efficient Lighting

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Saving Money with Energy Efficient Lighting

The US government has abolished the old incandescent bulb and is pushing consumers to maximize energy efficiency by promoting the use of LED lighting over fluorescent.

LED lighting has several key advantages over fluorescent. LED offers a major reduction in energy usage, better light quality, significantly longer life, reduced maintenance expense, produces less heat, eliminates flicker, superior lifetime performance and the bulbs are recyclable and safer as their design replaces glass with plastic. C:\Users\kathy\Desktop\Div 7\CES\ENERGY EFFICIENCY LIGHTING\commercial-maintenence cropped.jpgFluorescent lights contain the hazardous material mercury gas, are not recyclable, require hazardous disposal and require more frequent bulb and ballast replacement, adding to material and labor costs.
Overhead Tube Lights

There exists a confusing array of LED lighting products available for the overhead tube lighting market which can make the financial advantages of LED unclear.

Office lightingThe ideal product for an LED upgrade has the following attributes:

  • A rated power consumption of 18 watts for maximum energy savings
  • A rated lifespan of 50,000 hours for maximum bulb replacement savings
  • Operates with no external ballast for maximum maintenance savings
  • Utilizes the existing fixture and connecters for minimum installation cost.
  • Using an LED tube with these qualities creates an LED upgrade project providing for substantial utility bill, replacement and maintenance savings with a minimized initial investment which more than pays for itself.

The utility savings of upgrading to LED is based on the reduction in wattage. The most common four foot fluorescent tube is rated at 32 watts and with the most common ballast operates at 33 watts. The best replacement LED tube is rated at 18 watts, providing for a 15 watt reduction or a greater than 40% savings in energy use per bulb.

The utility savings of an LED upgrade depends on the number of tubes replaced and the local utility rate. The annual utility savings for a project replacing only 500 fluorescent tubes in a medium sized warehouse or office building is shown below:

Utility RateAnnual Savings (Warehouse)Annual Savings (Office Bldg)
$0.120 per kWh$7,884$2,475
$0.100 per kWh$6,570$2,063
$0.080 per kWh$5,256$1,650

Warehouse scenario defines a 24 hours/day, 7 days/week operation (8,760 annual hours).
Office Building scenario defines a 7 am to 6 pm, 5 days/week operation (2,750 annual hours).
Annual Savings calculated as kilowatt reduction (0.014 kW) times the operational hours (8,760 or 2,750 hours) times the utility rate (as shown in the table).


The maximum maintenance savings is realized by using a replacement LED tube requiring no ballast and is rated at 50,000 hours, which is often more than twice the life of both the old fluorescent tubes and ballasts. This avoids at least two complete replacements of the tubes and ballasts, plus the disposal costs for both. Using conservative cost estimates

[Assuming $2 replacement and $1 disposal cost for fluorescent tubes; $30 replacement, $45 professional installation labor and $1 disposal cost for ballasts (3 tubes per fixture) over 2.5 replacement cycles].

It is the total lifetime utility and maintenance savings that drives the conversion to LED. The total lifetime savings of the 500 replaced tubes is shown below:

Lifetime Utility RateLifetime Utility SavingsLifetime Maintenance SavingsTotal Lifetime Savings
$0.120 per kWh$45,000$35,415$80,417
$0.100 per kWh$37,500$35,415$72,917
$0.080 per kWh$30,000$35,415$65,417

Lifetime Utility Savings calculated as annual warehouse savings times the life of LED tubes in years (5.7).
Lifetime Maintenance Savings calculated as shown #4 above.
Total Lifetime Savings calculated as Lifetime Utility Savings plus Lifetime Maintenance Savings.


The best cost for a quality 18 watt LED tube rated at 50,000 hours and requiring no ballast is around $20.00, defining an initial investment of $10,000 for the 500 tubes. This represents a total positive cash flow of around $60,000 over the life of the LED tubes, with a payback of less than 12 months in the warehouse setting and around 36 months in the office building setting. The combined utility and maintenance savings more than covers the monthly payment in a lease-purchase scenario. This creates a net positive cash flow project, where the exact amount depends upon the operational hours of the lights and the lease-financing terms.

Additional applications of this LED upgrade in a 24 hour, 7 days per week scenario would include distribution centers, hospitals, manufacturing facilities, hotels and certain outdoor lighting & parking ramps. Additional applications in a 10-12 hour, 5 days per week scenario would include retail stores, schools, show rooms and restaurants.

By | 2017-09-26T12:03:38+00:00 September 28th, 2014|Energy Efficiency for Business, LED Lighting|0 Comments

About the Author:

Patrick J. Clouden is the Chief Executive Officer of Consumer Energy Solutions, Inc., one of the nation’s top energy consulting firms. Consumer Energy Solutions was founded in 1999 and represents some of the largest energy suppliers in North America. CES has enrolled over 2.5 million residential and 300,000 commercial customers across the United States and Canada including many Fortune 500 companies.

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