How does upgrading to LED lighting save me money?
The math is simple. Incandescent, fluorescent, and metal halide bulbs require a lot more electricity than LED’s need to provide the same output of light—which is measured in lumens. A lot of the money you spend on old lighting goes to generate waste heat. If you replace your old lights with more efficient LED’s, your savings are typically in the 40- 75% range for the lighting portion of your electricity bill. Your own savings depend on your hours of operation and the type of lights that you had previously used.
In addition, high quality LED lights are now are typically rated for a life of 50,000 – 200,000 hours, which can mean 15-30 years, depending on your usage. So you will no longer have to pay to maintain and replace your lights on a regular basis.
Finally, electric utilities across the US are paying rebates to commercial customers who install LED lighting because they are trying to cut down on electricity usage during peak business hours. Utilities such as PSEG do not want to build more power plants, so they actually pay you to use less electricity!
Are there any tax incentives?
Yes. The Federal Government wants to cut down on energy usage too. Many business that upgrade to LED lighting may be able to depreciate the entire project in year one— up to $500,000.
Alternatively, any business may qualify for additional tax credits under EPAct Section 179D. The Section 179D tax credit ranges up to $1.80 per square foot of upgraded space.
The tax incentives, like the rebates, lower your capital commitment, improve your return on investment in the project and shorten your breakeven period.
How long will the PSEG rebates last?
The CEP (Commercial Efficiency Program) is a ten-year project. We are now in year seven. Each year the budget for the next year is approved and the rebate levels are set.
Do the rebates ever change?
Yes, they change each year when the new budget is approved. Typically they are reduced every year. During the year the rates can be reduced without notice.
If I have received a rebate in the past few years to upgrade my fluorescent lighting, do I still qualify for an LED rebate?
Yes. And you will find that your cost savings and the improvement in your lighting is much more significant than when you upgraded from old fluorescents to new fluorescents.
Do I have to change to LED lighting to meet government standards?
Right now, the regulators and PSEG are using financial incentives. We believe it is likely that in the future the regulators will switch from the carrot to the stick. Older model fluorescent lights (T12’a) can no longer be manufactured in the US and are getting harder to find. LED’s are greener than all the alternatives. Mercury in fluorescent lighting is an environmental hazard. We think it is a matter of when, not if.
What are some advantages of LED lights vs. fluorescents and metal halides?
1. Much lower energy consumption. You get useful light instead of wasted heat.
2. Depending on the fixture or lamp, you can expect them to last 50,000 – 200,000
operable hours. This could be 15 – 30 years, depending on your usage.
3. LED’s full spectrum light provides better color rendering and is perceived to be more natural-like daylight. This creates a more pleasant and attractive environment for employees and customers.
4. LED’s maintain their brightness for about 95% of their useful life before they start
to fade. Fluorescents and metal halides begin to dim shortly after installation.
With LED’s, all of your lights work, and they are all the same color and brightness.
5. Healthier light: there is no flicker or hum, which can cause dizziness or nausea in some people. LED’s also eliminate harmful UV rays emitted by fluorescent lighting.
6. LED’s virtually eliminate maintenance costs such as lamp and ballast replacement
for many years.
7. LED lights remove the hazardous material mercury from your facility. Mercury from a broken fluorescent is considered toxic; old fluorescents are expensive to dispose of, or they pollute landfills if disposed of improperly.
8. General Appearance: LED’s will not turn yellow or brown or have ugly black bands at the end.
9. LED’s are generally good for the environment: reduced energy consumption reduces the burning of fossil fuels and the release of greenhouse gasses.
Do LED’s generate heat?
Yes they do, but very little. Fluorescent lights are hot to the touch, and incandescent bulbs and metal halides will burn your fingers if you touch them.
Can I just buy LED “tubes” and plug them in to my old fluorescent fixtures?
That product is still manufactured in Asia, and you can still buy them here as a “cheap” solution. But if they are cheap, they will not work. The heat created by the old ballasts causes the LED bulb to degrade quickly and the product doesn’t last for long. There are some specialty applications, manufactured in the US, that are of high quality, but they are an expensive solution for special needs. Never buy cheap LED bulbs that plug in to old fluorescent ballasts.
Why retrofit rather than buy all new?
If your installed housing is still in good shape, retrofitting can be less expensive.
In certain circumstances, the retrofit model reduces the fixture cost, compresses the installation cost (and time), and eliminates most of the disposal cost—improving your ROI and shortening your breakeven period.
Why would anyone buy new then?
Sometimes, when the installed housing is too old, damaged, improperly installed, or not up to code, retrofitting is not an option. Also, some fixtures are just difficult to retrofit, so the labor cost to retrofit cancels out the benefit of the less expensive hardware. Finally, some new troffers are approaching the price of retrofit kits, and can be cheaper to install.
Can I save on my outdoor lighting as well?
Outdoor lighting often burns a lot of electricity per fixture, so the monthly savings can be big. The utilities, however, generally do not pay a rebate on outdoor lighting upgrades, because they are primarily interested in cutting electricity use during peak hours. As a result, we usually provide you with a separate proposal for outdoor lighting.
What is the process?
1. We meet with you, answer your questions, and perform a lighting survey.
2. We present you with our findings and proposal.
3. If you chose to move forward, PSEG will perform a pre-inspection to verify our
count and rebate estimate.
4. Upon PSEG’s written approval of the rebate, you sign a contract and we order your
5. Upon receipt of your materials, we install the job. The entire process typically
takes 30-90 days.
Do I have to pay for the lighting audit?
No. There are consultants who will charge hundreds or even thousands of dollars for an audit, but we do it for free.
What will be included in your proposal?
Our proposal will include the total cost of the project, how much PSEG will pay, the accelerated depreciation and/or 179D tax credit amounts, how much you can expect to save on your monthly electric bill, your breakeven period, your Return on Investment, and which materials we propose to use. We also include additional useful financial information.
Who does the installation?
All of our installers are licensed and insured. We only hire established electrical contracting companies that have been in business for many years.
What types of businesses can benefit?
Every business or organization that has lights and pays an electric bill to their utility stands to benefit from this opportunity. This includes office buildings, retail stores, factories, warehouses, churches, schools, medical offices, automotive shops, car dealerships—the list is endless.
What’s the next step if I am interested in finding out more about upgrading to LED’s?
Call or email us to set up a meeting where we can answer questions, then conduct a free lighting audit.