Debunking the myth that waiting makes good business sense
We occasionally hear the excuse for not converting now to LED lighting now because our client thinks if they wait another 2 or 3 years, the cost of their LED fixtures will come down and they’ll save money.
We’d like to take a moment to debunk this myth and explain why there’s no time like the present to start saving money. Remember when you heard about savings for retirement, that the earlier you start the younger you are when you actually reach your goal. In the same way, timing works against you when you wait to start saving on your energy bill, not to mention missing out on the improved lighting in your space.
Cost justification:
Let say your facility runs 12 hours a day, 5 days a week and you pay a blended rate of .12/KWh
We’ll assume you have a 40,000 sf building with 100 each, metal halide high bay fixtures which draw 458 watts/fixture and we provide a turnkey lighting conversion for you to 100, Philips 16,000 lumen LED high bay fixtures which draw 124 watts/fixture, dramatically improving your light level and reducing your energy use by over 70%.
The below math shows converting to LED high bay fixtures now vs. waiting 3 years
Do the project today at current LED costs
| Labor, lifts, disposal, recycling | $9500 |
| Fixture costs, sales tax & fgt. | $23,870 |
| *EPAct tax incentive (2016 only) saving | (-$9120) |
| Net cost to covert to LED now | $24,250 (after tax benefit) |
Wait to do your project in 3 years after LED costs come down
| Labor, lifts, disposal, recycling | $9500 |
| Fixture costs, sales tax & fgt. (down 35%) | $15,516 |
| *EPAct tax incentive (2016 only) saving | no longer available |
| Lost energy savings over 3 years | $37,515 |
| Lost maintenance savings over 3 years | $4020 |
| Net project cost by waiting on LED to come down | $66,551 |
As you can see, by waiting three years for LED fixtures to come down, assuming the installation labor component didn’t go up, you are actually $42,301 further behind financially. This blows the myth that if you wait, LED fixture costs will come down and you will be further ahead installing several years in the future. Not only did you not save money, you spent 2.5X more money when you finally converted 3 years later, even with LED fixtures costs coming down.
Contact us today to help you determine your potential savings to convert to LED now. There is no time like the present! Bob@ROI-Energy.com 330-690-8308
* EPAct is part of IRS section 179d and is an accelerated tax deduction which allows you to deduct 60 cents per square foot or the cost of your lighting upgrade all against this year’s revenue. Based on a combined corporate income tax rate of 38% between state and federal, this is a HUGE benefit, which ends in December 2016. Certain IRS parameters must be met like watts per square foot and bi-level switching. ROI Energy will help you determine your eligibility and arrange to have your facility certified to be able to garner this lucrative tax incentive before it’s too late in 2016.