How LED Lights Can Save You Money When Times Are Tough

When business is slow it is awfully hard to think about spending a lot of money on anything especially lighting. It probably seems like it is working fine and it’s a fast easy, and seems like a cheap fix to keep replacing lights as they burn out and just keep things like they are until business picks up again. The problem with this solution is that we get distracted with the picture right in front of us. We get stuck on the initial price tags and because of that we forget about the picture, like how much it costs in maintenance and labour to continually have to be changing out light bulbs that keep dying roughly every 10,000 hours, which seems like a long time but a LED light of the same equivalent last for 50,000 hours. We forget how much money we are spending on the energy to keep these lights going and how much of that is wasted on heat that is emitted from lights instead of brightness. When we take the time to look at the big picture we can see how much money is being gobbled up by the current lighting system and how much money switching to LED lights can save, through fewer downtimes, lower energy costs, and virtually no maintenance costs all with the added bonus of more quality light that can be focused to give you the light where you need it.

So how can you figure out just how much you and your business can save by switching your lighting over to LED lighting. Luckily there is a simple formula that you can do yourself to figure out an estimate of how much you could be saving and the return of your investment.

Energy Savings Breakdown:

Information you will need about your current lighting system before you start:

  • The current number of lamps you have
  • The total wattage of your current fixtures ( This is the wattage of your current lamps + The ballast factor of your current lamps (the amount of power your ballast uses to run your lamp)
  • How many hours a day your lamps are on
  • How many days a week your lamps are on
  • The current kilowatt hour rate (The amount of energy being used at a constant rate of power over a period of time. A kilowatt-hour is how by energy companies to charge consumers for the energy being delivered.)
  • An Estimated Labour Cost per hour to change the original bulbs and also include the price of changing a ballast every 3 bulb changes.
  • The cost of original bulbs (include ballast change every 3 bulb changes)

Work though the following questions and calculations to find out how much money you will be saving by switching to LED lights:


A. Total Power Savings Per Year By Upgrading to LED Lighting

A1. Original Estimated Kilowatt Hours per Week: ((Existing Fixture Quantity x Fixture Wattage x Hours Per Week) / 1000)

A2. Replacement Kilowatt Hours per Week: ((Replacement Fixture Quantity x Fixture Wattage x Hours Per Week) / 1000)

A3. Average Weeks of Use per Year: How many weeks of the year do you use your lights?

A4. A4. Total kWh Saved per Year: (A1 – A2)

A5. Your Average Power Cost per kWh:  This number depends on where you are located and ranges from city to city.

A6. Total Power Savings per Year: (A4 x A5)


B. Lifetime Power Cost Savings

B1. Replacement Bulb Life:  How many hours will the bulb last for.

B2. Average Hours of Use per Year:  (((Hours Per Week) / 24) x A3)

B3. Average Lifetime of Replacement Bulbs: (B1 x 0.000114155)

B4. Lifetime Power Cost Savings: (A7 x B3)


C. Maintenance / Inventory Savings By Upgrading to LED Lighting

C1. Estimated Number of Times New Lights will Outlast the Old Lights: ((Original Bulb Life) /(Replacement Bulb Life))

C2. Labour Cost to Change Original Bulbs (include ballast every 3 bulbs): Example: $50.00 for Labour and maintenance and then for every 3rd bulb $110.00 (the price of maintenance for the bulb and ballast) times by the # of fixtures

C3. Cost of Original Bulbs (include ballast every 3 bulbs):  Example: $70.00 per bulb for a 400W HB and then for every 3rd bulb $140.00 (the price of a bulb and ballast) times by the # of fixtures

C4. Total Lifetime Replacement Cost Savings: ((C2 + C3) x C1)

C5. Amortized Total Lifetime Replacement Cost Savings per Year: (C4 / B3)


D. Payback Period & ROI By Upgrading Lighting 

D1. Total Net Cost of Lighting Upgrade:  This number will come from your quote

D2. Total Power Savings + Replacement Cost Savings per Year: (A8 + C5)

D3. Simple Payback on Power Consumption + Replacement Costs: (D1 / D2)

D4. Simple Annual Return on Investment (ROI): (D2/D1)                      


E. Lifetime Savings Summary

E1. Lifetime Power Cost Savings: B4

E2. Lifetime Replacement Cost Savings: C4

E3. Total Lifetime Costs Savings: (B4 + C4)


Here is a simple calculator to work out how much you can save your electricity bill per year:

So now that you have done the calculation you should be able to see for yourself why it makes sense to invest in your lighting and make the switch to LED lights because in the long run they are much, much cheaper because of their low maintenance and energy costs. By making the switch now you will immediately begin to capitalize on your savings and as an added bonus have a much more uniform and high quality light. You will also be decreasing helping to decrease your carbon footprint which means you are helping to do your part in decreasing the impact we have on the environment.