Demand-side economics speak in favor of LED lighting (MAGAZINE)

An evaluation of an LED retrofit project and various financing options indicates that many users should move forward and embrace the benefits of LED lighting, writes MATT MILLMAN.

The economic benefits of taking on a LED lighting retrofit could not have come at a better time. All property owners have seen their assets decrease in value over the last 24 months as rents have dropped while utility rates, materials costs and labor rates continue to rise. For the first time in over a decade, facilities managers, asset managers and property owners are looking at cost cutting as the only way to increase their revenues. LED lighting retrofits offer a property owner significant opportunities to reduce their costs in multiple areas.

LED lighting retrofits can demonstrate quantifiable savings in power consumption, air-conditioning demand, material and labor cost for replacement, and recycling cost. Add to those savings the tax benefits of the deductibility of an operating lease or the ability to depreciate a capital lease structure (which will be explained in the example below), and one can see a payback as short as 1.78 years on fixtures that have a rated life of over 9 years. That’s not to mention the benefits of “going green” including a significant carbon footprint reduction.

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This article was published in the April 2010 issue of LEDs Magazine. To read the full version of this article, please visit our magazine page, where you can download FREE electronic PDF versions of all issues of LEDs Magazine. You can also request a print copy of LEDs Magazine (available by paid subscription) and sign up for our free weekly email newsletter.

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