You may have heard that you can save on energy costs with LED lighting, but don’t know if a retrofit would be worthwhile for your business. Or, you might simply assume that the upfront cost of LEDs puts them way out of your budget.
If that sounds familiar, you’re not alone. But, as awareness of the benefits spreads, it’s likely that your Board or C-suite will ask you whether your business should be looking at LEDs. This article aims to help you answer that question.
Why are LEDs better than legacy lighting?
To understand why LEDs are better, we need to outline some of the inefficiencies with older lighting technologies, such as halogen and fluorescent lights. Halogen lamps are the type we often see in our homes, which get hot to the touch. They’re inefficient because a proportion of the electricity they use is going towards creating this unwanted heat.
Fluorescent lights are more efficient than halogens, as they produce much less heat. These are the the tube lamps we typically see in offices – they can also be found in our homes in the form of CFLs (Compact Fluorescent Lights).
Since they produce less heat, fluorescent lights have a longer lifespan. Fluorescents may be more efficient than halogens, but they have other disadvantages. For example, they emit light in all directions, which means there’s wastage with light shining where it’s not needed (onto the ceiling, for example).
LEDs, or Light Emitting Diodes, are more efficient than either halogens or fluorescent lights. Good quality, well-designed LEDs with good heat sinking capability give off much less heat, which means more of the electricity they use goes towards making light. As a result, good quality LEDs can last in excess of 50,000 hours – and produce a more efficient and more directional light. For businesses, LEDs promise not only a dramatic reduction in energy costs, but a significant reduction in maintenance requirements.
Is there a catch?
Taking all of this into account, moving to LED lighting seems like a no-brainer for most businesses. But there is a catch – and that’s primarily the upfront cost. While LED lighting will save money in the long term, many businesses still baulk at the higher cost of the initial installation.
There’s also the disruption that a retrofit could potentially cause to the business – and of course, you may not have time to research LED equipment providers; or manage procurement, design and installation.
Making the business case
These are some of the problems that Verdia was set up to solve. We work with clients to develop a strong business case for energy efficient upgrades, by considering the client’s existing energy usage, business operations and building profile. Our goal is to find the solution that’s going to deliver the highest long term value. That might include power factor correction; energy efficient upgrades including lighting and HVAC; and generating electricity on site with a solar PV system.
When we develop a business case for an energy project, it typically includes arranging finance to cover the upfront capital cost of the solution. Finance can be set up so that the monthly finance repayments are exceeded by the energy cost savings, meaning that you get an immediate cash flow benefit – and of course, the long term benefit of a high quality, energy efficient solution.
With the business case in place, Verdia has a team of experts who can lead the project from end-to-end on the client’s behalf – solving the resourcing challenge. Further, we have a due diligence program which allows our clients to choose from pre-qualified equipment providers, and installers. In a crowded market for energy efficient solutions, this takes the leg work out of making sure you get a quality solution from a reputable provider.
This is the approach we recommend to our clients. However, there may be circumstances where you simply want to get on and do an LED lighting upgrade. And, if that’s the case, you might be wondering where to start.
Where to start with a lighting upgrade
Your starting point will be dictated by your reasons for considering a lighting upgrade. If you are getting a lot of complaints about lighting in your buildings – too bright, too dark, too much glare – then you need to start with a lighting audit. This is because replacing your current lighting with LEDs will not fix inherent problems with the location and quantity of your lighting fixtures. CitySwitch (www.cityswitch.net.au) has some good advice on how to approach a lighting audit, whether you’re doing it yourself or getting someone to do it for you.
If you are broadly happy with your lighting, but need to find ways to cut costs through improved efficiency and reduced maintenance, there’s the straightforward option of replacing your existing lighting with LEDs. The following tips will help you find the right LED solution for your business.
Five steps to a successful LED project
- Remember that an LED upgrade is a long term investment. If you select a quality solution, the long term results will far outweigh the short term cost. Select your provider based on reputation, not just who has the cheapest quote. Ask for business references to make sure your preferred provider has happy customers.
- Thoroughly evaluate the business case put forward by the lighting provider. This should include:
- A summary of your existing lighting and energy usage
- Recommendations for your new LED lighting solution
- ROI calculations
- A summary of the energy savings you can expect
- A summary of the maintenance savings you can expect
- How long it will take the solution to pay for itself
- The savings you can expect over the typical lifetime of the equipment
- The government rebates you might be able to access.
- Look carefully at the warranties that will cover the equipment and installation. You want to know that if anything fails, you can get it fixed at no further cost to you. If you proceed, make sure you keep records of all the warranties.
- Find out how the provider will manage the installation without impacting on your business operations. For example, they might work on weekends or at quiet times in your operations.
- Beware of shortcuts. For example, some providers will give you the option to keep your existing light fixtures but replace the tubes with LEDs. When the LED tubes are not fitted as part of a ‘luminaire’ (a luminaire refers to the LED light as part of unit with the correct light fitting) they operate less efficiently and will not last as long as they should. This will lead to increased maintenance and replacement costs, which means the initial saving on fixtures is a false economy in the long term.
Following these simple steps should help to ensure you get an LED upgrade that will deliver long term cost savings for your business.
For more information on how to approach energy efficient upgrades, visit www.cityswitch.net.au
ABOUT THE AUTHOR
Nathan Moore, Senior Electrical Engineer, Verdia
Nathan leads the engineering team providing technical advice to Verdia’s Project Advisory, Product Development, and Asset Management teams. He has more than 15 years’ experience in the engineering and delivery of projects in a wide variety of sectors including infrastructure, mining and solar PV.
Nathan’s experience includes the design, delivery and commissioning of the 1.7MW Weipa Solar Farm at Rio Tinto’s remote bauxite operation in Weipa. This project was the first installation of large-scale PV generation at a mining operation in a remote location.
Previously, Nathan delivered the engineering, project and contractor management for the electrical component on mining projects worth over $12 million, and managed the Energy Efficiency Opportunities Program for Xstrata’s North Queensland operations.