Return On Investment And LED Lighting

The environmental impact isn’t the only reason to make the change from regular incandescent bulbs to LED panel lighting – it’s also a money-saver in the long term as LED bulbs use energy more efficiently than their more traditional counterparts.

Of course, there’s an initial outlay in cost in making the change, replacing your old lighting with LED panels, so we’re sure one of the concerns for this when it comes to the accounting side of your business is how much money you’ll save versus the amount you’ll have to spend – otherwise known as your return on investment (ROI).

Green business blog the Ecopreneurist says that the ROI on LED bulbs replacing incandescent bulbs is one of the simplest formulas to work out when it comes to green technology for businesses, so let’s see if we can follow along with his technique.

First up, we calculate the amount of electricity your current incandescent bulbs are using by working out the number of kilowatt hours you’re using with the formula, and then multiply it by the amount of time a year your bulbs are in use.

Next, multiply again by utility rate per kilowatt hour and you should be able to estimate the amount you’re spending on illuminating your workplace a year energy-wise. Then take into account that incandescent bulbs last on average for 1,200 hours, according to the post, and add in your costing for replacing these as many times as necessary for the time your bulbs are lit a year.

Your next job is to work out the same deal but for LED panel lights, using the same sum, but with the number of panels you’d require and their specific wattage (here’s a clue, it’ll be a lot less than individual incandescent bulbs). You’ll start to see savings on money spent on energy, but also on the fact that, on average, LED lights have a lifespan much vaster than incandescent bulbs at 50,000 hours, removing the need to replace them from your budget too until much later down the line.

Last things last, work out your initial outlay in costs for the panels and offset that against the savings in energy consumption and replacing bulbs. Once you’ve broken even, maybe a few years down the line, you’ll then be actively saving money on your incandescent bulb replacements.