There are countless reasons for commercial businesses, industrial facilities and municipalities to make the switch to LED lighting from more traditional alternatives. Perhaps the most persuasive of reasons is the amount of money that can be saved from upgrading to LED lighting as well as the mounting arguments around the idea that LED lighting is the future. Below are four ways to save with LED lighting.
State & Local Lighting Rebates
An LED lighting rebate is a reimbursement on your lighting investment from a state or local government based on the amount of energy your lighting upgrade saves. These rebates vary based on your state and the location of your business and can even be specific to your city or township.
State and local lighting rebates are often based on the number of kilowatt hours (kWh) your lighting upgrade saves or the number of fixtures you are having replaced. You can usually expect to receive between $20 and $50 per fixture or around $0.20 to $0.30 per kWh that is saved.
The US Department of Energy offers a great list of lighting rebates that are currently available from states and local governments.
Energy Company Rebates
In addition to rebates from local, state and federal governments, energy companies including Consumers Energy and DTE are also offering rebates on electricity bills for commercial businesses, municipalities, industrial facilities and non-profit organizations.
An upgrade to LED lighting could save you as much as $180 per fixture based on the location of the lighting fixtures you are upgrading and the type of lighting you are using currently. Exterior LED lighting upgrades, particularly for parking garages can provide the most return from energy company rebates.
These types of rebates are also frequently available through local utilities companies, so be sure to look into what is available based on the location of your business. For the most up-to-date energy company rebates, refer to the Database of State Incentives for Renewables and Efficiency.
Tax Incentives for LED Lighting
The Energy Policy Act of 2005 created a provision allowing for specific tax incentives related to commercial LED lighting upgrades. The idea is to make the initial investment in LED lighting more affordable by allowing commercial businesses to deduct the full value of their lighting upgrade for the year in which the equipment is installed.
If your business qualifies for tax incentives under the Energy Policy Act of 2005, you can expect to save between $0.60 and $1.80 / square foot.
A final way to save on LEDs is through financing or leasing your lighting. When you lease your new LEDs, you are paying only for the use of your lighting, not for the ownership. This can prevent you from being tied up in capital assets and eliminate the need for a downpayment.
When you finance your LED lighting, you also receive longer-term, fixed payments with the potential for lower payments as the lessor receives tax benefits from ownership of the LEDs.
The rebates, incentives and financing options are far from an exhaustive list of ways to save money with LED lighting, but they should give you a good idea of how the right approach to your lighting upgrade can make it highly affordable and, in time, an investment you will be glad to have made.