TIME TO SEE THE LIGHT - THE FINANCIAL BENEFITS OF LED FOR YOUR ORGANIZATION
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TIME TO SEE THE LIGHT THE FINANCIAL BENEFITS OF LED FOR YOUR ORGANIZATION
INTRODUCTION
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In 2019, the Trump Administration brought the subject of LED bulbs to light and change. 75% of respondents indicated they would be willing to spend $50 or
put them center stage. It was reported by both the New York Times less to reduce the impact of climate change.
https://nyti.ms/2jX9Tm2 and by NPR https://n.pr/2khGUd3 that the Trump
Administration rolled-back the requirements for light bulbs that were set to
take effect in January 2020. It reasons that with the ban on less-efficient
incandescent light bulbs being lifted, you the user, are being saved a lot of
money. Or are you? Simply put, no you're not. Too bad the background of this
decision doesn't come with the fine print, because there is a lot of it.
If you are concerned about the effects lighting has on the environment, and
how IVAD CCG can help the environment and your company, please visit Source: https://cei.org/wp-content/uploads/2021/05/20210525-CEI-Climate-Poll-PP.pdf
www.ivadccg.com/LED for an informative eBook called Corporate Social
So, the question is not “Are you willing to pay to help the environment?” The
Responsibility: The Environmental Benefits of LED.
real question is “How long are you willing to keep wasting money?” By
In May 2021, The Competitive Enterprise Institute released a survey that retrofitting to LED, your organization can save 30 – 70% per month on your
included respondents’ feelings on spending their own money to combat climate lighting bill, as well other as other costs.
COMPARISON: INCANDESCENT vs. LED
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So, we are going to take one incandescent bulb, and compare the total Incandescent LED Incandescent LED
ownership COST to that of one LED light bulb over one-month and one-year. Lumens 800 800 800 800
And for fun, we will see how that extrapolates to a larger commercial or Watts per Bulb 60 8 60 8
Qty of Bulbs 1 1 414 414
industrial facility with say 414 bulbs. Hours per Day 14 14 14 14
Facts: kWh per Day 0.84 0.11 347.76 46.37
• In layperson's terms, lumens are how bright and shiny a light is on a surface Days per month 30 30 30 30
kWh per Month 25 3 10,433 1,391
at a fixed distance. In other words, a lumen is the luminescence of a
Avg Cost per kWh $ 0.13 $ 0.13 $ 0.13 $ 0.13
surface at 1 foot-candle. Electricity per Month $ 3.15 $ 0.42 $ 1,304.10 $ 173.88
• A 60-Watt incandescent light bulb generates 800 Lumens Cost per Bulb $ 1.03 $ 2.49 $ 1.03 $ 2.49
Total Bulb Cost $ 1.03 $ 2.49 $ 426.42 $ 1,030.86
• An 8-Watt LED light bulb generates 800 Lumens
Cost Month One $ 4.18 $ 2.91 $ 1,730.52 $ 1,204.74
Assumptions: Bulb Life (Hours) 2,500 25,000 2,500 25,000
• The average cost per kWh is currently $0.125. The actual price in your Hours Use per Year 5,110 5,110 5,110 5,110
Bulbs per Year 3 1 3 1
area may vary, but we can be sure that rounding on your bill is not done in
Total Electricity Cost $ 37.80 $ 5.04 $ 15,649.20 $ 2,086.56
the "user's" favor, so we rounded-up to $0.13. Total Light Bulb Cost $ 3.09 $ 2.49 $ 1,279.26 $ 1,030.86
• The lifespan of an incandescent bulb is 2,500 hours TOTALS $ 40.89 $ 7.53 $ 16,928.46 $ 3,117.42
• The lifespan of an LED bulb is 25,000 hours
• All other factors are equalCOMPARISON: INCANDESCENT vs. LED
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Most facilities have different size bulbs for different areas and applications.
Worst Expected
Some are larger bulbs, and some are smaller. But in either case, there a savings Total Electric Bill $ 3,000 $ 3,000
of 40%-70% per month in electricity costs by switching to LED. % of Electricity Bill is Lighting 40% 40%
"Lighting Bill" $ 1,200 $ 1,200
It is important to note that incandescent bulbs and Compact Fluorescent Light
% of Electricty Bill is HVAC 20% 20%
Bulbs (CFLs) generate most of their energy in the form of heat. For example, it
"HVAC Bill" $ 600 $ 600
takes two one-hundred-Watt light bulbs to generate enough heat to warm-up
Reduction of "Lighting Bill" 40% 70%
an Easy Bake OvenTM to more than 370 degrees Fahrenheit. This same heat Reduction of HVAC Load with LED 20% 40%
puts an extra load on your HVAC system. New "Lighting Bill" $ 720 $ 360
New "HVAC Bill" $ 480 $ 360
Here is an example of what your overall impact can be by implementing LED
New Electric Bill Total $ 2,400 $ 1,920
based on assumptions, which include the “Worst-case" and "Expected"
Savings $ 600 $ 1,080
scenarios (so you do not think the deck is being stacked).
Another factor that is not accounted for is the maintenance costs of replacing
all of these light bulbs. Once again, the benefits are stacking up in the favor of
LED lights.WHO WINS?
There are actually “winners” from your organization not retrofitting to LED. It Incandescent CFL LED
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appears that the winners are the energy producers, the light bulb Lifespan (hrs) 1,500 10,000 25,000
manufacturers, and the states. Who loses? Anyone that turns on a light that is Mkt Price $ 1.03 $ 1.74 $ 2.49
not LED. So how do they win? Cost of to Manufacture $ 0.46 $ 0.78 $ 1.12
# of Bulbs sold (25,000 hours of use) 17 3 1
Energy Producers: The energy producers, who provide the electricity with a
Revenue $ 17.17 $ 4.35 $ 2.49
tidy little profit margin built-in, are secure in knowing that those who do not Cost $ 7.73 $ 1.96 $ 1.12
make the switch will continue to consume the same amount of electricity as Profit $ 9.44 $ 2.39 $ 1.37
today, and the profit margins are secure. If everyone were to switch to LEDs,
the revenues and profits would decline by an estimated 15-30%, and the only Therefore, you can see how much the light bulb manufacturers stand to lose
way they could maintain those numbers is to artificially increase their prices. with by being forced to make more efficient light bulbs. With the restrictions
lifted, you can expect to see sales on incandescent bulbs to make them appear
Light Bulb Manufacturers: Since 2017, GE, the industry's leading supplier of
to be a greater value than they really are.
incandescent light bulbs, has tried without success to sell-off its light bulb
division. With LED and CFL prices dropping, making them more affordable,
combined with them having significantly longer light-lives, the revenue and
profits have deteriorated significantly. Here is an example of 25,000 hours of
use for one light fixture. Simple math comes to the rescue again:The States: Don't you think the states see some of this action? They derive Your facility may require an extensive re-wiring to optimize the efficiency of an
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revenue from sales tax on the light bulb sales, and in some states, taxes on the LED installment. If that is the case, the estimated Return on Investment (ROI)
electricity. For simplicity-sake, let's just look at the state and local sales tax, on a capital expenditure is between 18 and 20 months. Or, you have the options
which vary by state. Using 8.454% as the May 2021 average (source: of Lighting-as-a-Service, or leasing; both of which still have an immediate and
Accounting Web), we can see: significant reduction in your monthly payments.
CONCLUSION
Incandescent CFL LED
Please do not fall for the fake news. Even if you do not care about the
# of Bulbs sold (25,000 hours of use) 17 3 1
environment, the fact is LED lights will save you money. Depending on the type
Revenue $ 17.17 $ 4.35 $ 2.49
of lights, wattage, and configuration, you are looking at 30-70% savings per
Sales Tax $ 1.47 $ 0.37 $ 0.21
month. It is that simple. Among the many other benefits LED offers, it is
significantly less expensive than what you have now.
THE OBJECTION
“LED lighting is too expensive.” The fact is, at some point, the change will be What do you have to lose? Get a complimentary site assessment from IVAD
required. Somehow, someway, the requirement for reduced kWh usage will CCG, and if you do not like the ROI, then do nothing and maintain the status
affect your business. So, you can do it now, when many states have rebates in quo. If you like what you see, we can take care of you all of the way.
place, or wait until you have no choice, and the rebates go away.www.ivadccg.com 866-584-6660 © 2021 IVAD CCG
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