How much money can new lighting save your business?

Am I average?

That’s the question that often hits me when someone quotes an ‘average’ statistic. The ‘average’ business or household seems almost mythological. Few of us fall right on that point on the line.

The same is true when it comes to often quoted energy efficiency savings statistics. For example, the US Environmental Protection Agency says that replacing one old-fashion incandescent light bulb with a compact fluorescent light will save on average $69 over the product’s lifetime.

Will your business save that much by installing new light bulbs?

Several factors come into play, some that you can control, the most obvious being how much you turn on the light.

Another important dynamic, not often discussed, is your electric rate.  Rates vary dramatically through the United States. In coming up with the $69 savings figure, the EPA assumed an electric rate of 11.3 cents/kWh. If you operate a business in North Dakota, you’re paying a lot less than that for electricity, about 6.8 cents/kWh, so your savings from a CFL will be lower. If you’re in Hawaii, you are paying a lot more, about 28 cents/kWh, so your savings will be greater.

Take a look at this frequently updated chart of electricity rates in the 50 states. Is your business in one of the pricier states? If so, an investment in new lighting may quickly pay back. After you’ve found your electricity rate, you can go to this calculator and gauge what you’ll save if you switch from old-fashioned incandescent light bulbs to CFLs. This will give you a closer idea of your savings, although even with this calculation we still are dealing to some degree with averages. The electricity rate in the chart is the average for utilities in your state. Your utility can provide your specific rate.

Businesses are increasingly contemplating saving energy – and costs – by installing efficient lighting, not only CFLS, but LEDs and lighting controls. This is partly because lighting accounts for somewhere between 20 percent and 50 percent of the electricity commercial enterprises use, so the savings can be substantial. On a larger societal level, efficient lighting for businesses is important because US commercial buildings represent 47 percent of the total growth in energy expected in the US between 2010 and 2020.

Elisa Wood is a co-author of “Energy-Efficient Lighting Explained: A guide for business people who aren’t lighting techies,” published by and The Daily Energy Report.

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