Replacing lights can bring big savings

The familiar banks of flickering fluorescent tubes lighting many warehouses and manufacturing plants will soon be switched off permanently.

The Energy Policy Act of 2005 called for the gradual elimination of T-12 fluorescent bulbs and the ballast systems that power them. The ballasts are no longer manufactured, and the bulbs will be discontinued in 2012. The T-12s have been standard equipment since the 1930s. Because their most similar replacement bulb, a T-8, is 1/2-inch smaller in diameter, most old fixtures will not work.

Big SavingsFortunately, newer, better and innovative alternatives are available, and building owners are finding to their delight that savings far exceed what they had expected. T-12s are also being replaced by T-5s and high-bay induction lights, with each new generation becoming more efficient. Although T-12 parts will be available until inventories are depleted, sooner or later companies will need to make the change.

Lighting accounts for 40 percent of an average commercial building’s electricity bill, according to the U.S. Department of Energy. It estimates the average lighting project to have a payback period of 2.2 years and a return on investment of 45 percent. Once the project has paid for itself, savings will extend indefinitely into the future, positively impacting the bottom line.

One company has seen a 35-40 percent reduction in lighting fees since replacing T-12 fixtures with Optieo lights. Masada Bakery, a 30-year-old Atlanta company that sells bagels and artisan breads throughout the Southeast, has seen immediate positive cash flow – the savings were greater than the loan payment for the project – and payback is estimated to be three years.

Payback period is calculated by dividing the cost of the investment (adjusted capital investment) by the annual electricity cost savings. Return on investment is often also calculated for a period of years.

Unlike other improvements, new lighting installations don’t require energy audits. Often the lighting company will do an assessment of needs, price quote, energy savings and payback period calculations. Inputs used in the payback calculation include number of lights, hours of operation, maintenance costs, rates and projected increases, heat output, life of bulbs and energy use decrease. Cost of the project is adjusted down by rebates and incentives and up by cost of financing.

To learn about rebates and incentives in your state, check the Database of State Incentives for Renewables and Efficiency. On the dsireusa.org website, state and/or utility rebates for commercial energy efficiency can be found for most states. For example, in Alabama, a business can receive $3 to $34 for each T-12 fixture replaced and businesses can tap a revolving loan fund with a minimum loan amount of $50,000, a 2 percent interest rate and a term up to 10 years.

With the array of new, highly efficient lighting fixtures available, as well as rebates and low-cost funding sources, it may be time to replace those outdated fixtures!

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