There is a large effort to achieve energy independence in the United States and a great portion of that focus is based on the energy efficiency of lighting. The incandescent bulb has been largely unchanged for over 100 years and is a very un-efficient lighting source, 90 percent of the energy is wasted by producing heat while 10 percent of the energy produces light and the remaining light sources such as metal halide, high pressure sodium or fluorescent are not much more efficient. Over the last 15 years the Federal Government has been focusing on energy efficient lighting products of LED’s because they believe that by implementing them over the next ten years will produce energy savings equal to 30 large power plants or 17 million cars.
Utility Rebates with LED Lighting
Not only does LED lighting provide superior energy savings but it can put money back in your pocket. As part of today’s drive to become more energy efficient, Utility Companies and the Federal Government are providing financial incentives for customers who upgrade their current outdated electrical and natural gas systems. Rebates for upgrading your lighting are the most often applied for, because lighting is usually the biggest part of energy expense and the lighting upgrade is easy. According to the federal government lighting represents 40% of the average commercial buildings electric bill. By taking advantage of both the utility rebates and the federal tax deductions can cover a significant portion of the install making the lighting upgrade a smart decision.
How do rebates work?
Very simply, rebates take the amount of kWh energy saved by the upgrade and those kWh savings are then multiplied by a determined rate factor based on the hours the fixtures are on. Additionally, some utilities also take into consideration the costs to install the fixtures further adding to your savings. Rebates vary from utility to utility but typically average between 20 and 30 percent of the project. Many of the utilities require LED luminaires to be Design Lights Consortium tested and approved to qualify for a rebate. DesignLights Consortium is a private collaboration of utility companies and energy efficiency organizations located throughout the United States. DesighLights mission is to test and recommend solid state products that meet these criteria; minimum light output based on luminaire type, zonal lumen density, minimum luminaire efficiency based on luminaire type, a mini CRI of at least 65, a L70 rating of at least 50,000 hours and a 5 year warranty.
LED lighting is the perfect way not only to light your facility but is the most energy efficient lighting solution which will further maximize your rebate.
GUSCO will help you with the rebate process
GUSCO is very familiar with the rebate process and we are trade ally partners with many of the utilities. We will fill out the application for you and work with you and the utility company to ensure you maximize your rebate.
How LED Lighting Saves You Money
We all heard about the wonders of LED lighting and how it can impact the bottom line. But how exactly do we figure out the savings? Our goal for our customers is to reduce the lighting energy or the total kWh used in your facility through the use of LED lighting upgrades. By upgrading to a LED lightingsolution we can reduce your light energy usage by 40 to 97 percent depending on the application.
What exactly is a kilowatt hour?
To help you get a basic understanding of your energy bill, let’s review what a kWh and a kW is.
In its strictest sense, energy is not generated or used, but converted from one form to another form. For example, energy that is trapped in coal is released when it’s burned and then that energy is converted into electrical energy which is then converted into light energy. A kWh is a measure of energy, while a kW is a measure of power. Electricity used over time is measured in kilowatt hours. A kilowatt hour is a measure of power equal to 1,000 watts, or the amount of energy you get from one kilowatt for one hour. LED Lights are in its simplest form a light emitting diode that creates a large amount of light using much less energy than a traditional light source such as a Metal Halide, High Pressure Sodium, Fluorescent or Incandescent lamps. Let’s look at a comparison of a 400 watt Metal Halide High Bay and a LED High Bay Luminaire below.
|A traditional 400w metal halide actually uses 457 watts after you figure in the ballast||Above is a Lusio LED Essentials 4 Bay Luminaire. It uses 238 watts, a 52% reduction in watts|
Review of a real life example of upgrading 400w Metal Halides with Lusio 4M’s.
If you look at the wattage reduction by upgrading to LED’s over multiple fixtures and time, the savings can be tremendous. Let’s look at a basic example by taking 20 of the 400w metal halides at 457 watts in a factory setting that operates 16 hours a day, six days a week and replace them with 17 of the Lusio Essentials Bay 4M’s
Current fixtures below
The above analysis shows the kWh savings per year to be 21,864 with a total operational savings of $44,073 over a ten year period based on an initial investment of $15,231. Imagine what the savings can be if you have 100, 400w metal halides.
In simple terms WATTS = DOLLARS and the less you use the more you will save!
How do we find out how many kWh’s you are using?
To understand the portion of your energy consumption that is attributed to lighting, first we must do a physical audit of your premise and record the wattages of your fixtures. There are 4 factors that determine the amount lighting energy being used:
- Bulb/Lamp Wattage
- Number of Bulbs/Lamps per fixture
- Fixtures per location and space
- Hours of Operation -The amount of hours the lights are on in each location
The combination of the 4 will determine the exact kWh your fixture uses on an annual basis. An audit from one of our qualified auditors will allow us to determine what percent of your electric bill is currently attributed to your lighting. 25% to 40% is typical, but as high as 80% is common for warehouses and storage facilities.
For example, for us to figure out exactly how much of your energy bill is attributed to lighting we do the following calculation.
Fixture Quantity x Fixture Wattage = Total Watts
Total Watts / 1000 = Kilowatts
Kilowatts x (Hours of Use) = Kilowatt/Hr.
Kilowatt/Hr. x (Cost of Energy) = Annual Cost
Once your audit has been completed, we input the information into software specifically designed to calculate your current kWh usage based on your current lighting and hours of operation. When we design an LED solution for your facility, we use simple mathematics to deduct the wattage from your current system and replace the wattage with our proposed solution.
In other words:
We take the existing KW
Subtract the new KW
= SAVINGS KW
Multiply this by the hours of operation and the rate of electricity and you will get a dollar figure. The chart below illustrates the typical savings attributed to a shopping mall parking lot. As you can see, the annual savings from lighting alone can put a significant portion of your money back in your pocket.
Federal Tax Deductions EPAct2005
The Federal Government has a special tax deduction designed to reduce the initial cost of implementing energy efficient lighting known as “The Energy Efficient Commercial Building Tax Deduction” from the Energy Policy Act of 2005. To qualify for this deduction energy usage the energy saving must be at least 50% and be certified as so. The tax law allows companies who have upgrade to LED lighting receive a tax deduction based on .60¢ per square foot. So if you had a 100,000 square foot facility you would qualify for a $60,000 tax deduction. The tax deduction is a cost subtracted from gross income when calculating taxable income.
Two great resources for information on Epact2005 and The Energy Efficient Commercial Building Tax Deduction are: