Will LED Lighting “Pay for Itself”?

This simple answer to this question is YES.

However, not all LED Lighting will. There are two key requirements necessary to get to YES. First, does the LED light use less energy than its legacy replacement? Second aWil LED LIghting Pay For Itself?nd most important, does the LED product have a proven track record of reliability because when it fails, it fails to repay.

The only true test of reliability comes from reliable data gathered from real world installations. If 99% of the product installed over the past 6 years is still performing it’s function, it can be proven to be reliable. Anything less and you are now guessing, hoping at best, expecting it will last beyond it’s 5 year warranty.

If it can be proven and verified that the LED product is using less energy, then those are the saved watts or kilowatts depending on the light source. Simply, multiply the hours of operation by the kilowatts saved and you have the number of watt hours which is how our electricity provider charges us for consumed power. Then multiply this number by your electricity rate and you have the dollar amounts for savings. Its best to extrapolate this to an annual figure.

To complete the Return on Investment, simply take the installed cost of your LED light solution and divide by your annual savings. If the number exceeds 3 years, then this is not a good investment. LED Return on Investment (ROI) figures look more attractive when maintenance expenses are added into the equation. LED lamps eliminate traditional lighting maintenance cost associated with replacing lamps and ballasts.

In closing, without “proof of reliability”, that is real word installations in excess of 5 years being achieved, nothing else matters.