- Calculating LED Retrofit ROI for Commercial Buildings
- Additional Savings Factors
- Quick Payback Formula
Calculating LED Retrofit ROI for Commercial Buildings
The three variables that determine LED retrofit payback are: (1) current lighting wattage and hours of operation, (2) local electricity rate, (3) LED fixture cost including installation. Below is a real-world comparison for a typical 20,000 sq ft commercial warehouse.
| Parameter | Existing (400W HID) | Kingseng LED (150W) | Savings |
|---|---|---|---|
| Fixtures | 30 | 30 | — |
| Watts per fixture | 450W (incl. ballast) | 150W | 300W |
| Total kW | 13.5 kW | 4.5 kW | 9.0 kW |
| Annual hours | 4,380 (12 hrs/day) | 4,380 | — |
| Annual kWh | 59,130 kWh | 19,710 kWh | 39,420 kWh |
| Annual cost ($0.12/kWh) | $7,096 | $2,365 | $4,730 |
| Maintenance (relamping) | $600/yr | $0 (5-yr warranty) | $600 |
| Total Annual Savings | $5,330 | ||
| LED Fixture Cost (est.) | 30 × $X = Est. Investment | ROI: 1.5-2.5 years |
Additional Savings Factors
Utility Rebates: DLC Premium-listed Kingseng fixtures qualify for utility rebates of $20-80 per fixture in most North American markets. At $50/fixture, 30 fixtures receive a $1,500 rebate, reducing payback by 3-4 months.
Cooling Load Reduction: HID/halogen fixtures generate significant waste heat. In air-conditioned commercial spaces, every 1W of lighting heat reduction saves approximately 0.3W in HVAC energy. For the warehouse example above, the 9kW lighting reduction saves an additional ~2.7kW of cooling, worth approximately $1,400/year in a conditioned space. For more on this topic, read our guide: Energy Efficient LED Lighting: Commercial Cost Savings Analysis.
Demand Charge Reduction: Many commercial utility tariffs include demand charges based on peak kW draw. Reducing connected lighting load by 9kW can save $500-2,000/year in demand charges depending on local utility rates. Kingseng can help estimate this for your project location. For more on this topic, read our guide: LED Energy Savings Calculator: How Much Can You Save?.
Quick Payback Formula
Payback (years) = (LED Cost – Rebates) ÷ (Annual Energy Savings + Maintenance Savings + HVAC Savings + Demand Savings) For more on this topic, read our guide: LED Energy Savings Calculator: How Much You Really Save Per Fixture.
Contact Kingseng with your project details for a customized ROI calculation including your local utility rates, rebate programs, and operating hours.
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