Lighting upgrades provide businesses with the opportunity to earn energy savings and a return on investment. The latest LED technology conserves energy, helps cut back on utility bills, and requires less maintenance than other lighting options. This guide will walk you through how to calculate the energy savings and ROI of a lighting project, with a focus on using LED technology, and will also explore potential financial incentives that can help reduce your initial investment.

Step-by-Step Guide to Calculating Energy Savings

To start calculating energy savings for a lighting project, it’s essential to gather detailed information on both your old and new lighting products, as well as factors like usage hours and electricity rates. Here’s a five-step method to assess your lighting project’s energy savings.

Step 1: Gather Product Information

Collect the following information:

• Old product wattage: For example, let’s say your current lighting uses 90-watt PAR 38 halogen bulbs.
• New product wattage: In our example, the LED replacements use only 14 watts.
• Running time: Determine how many hours per day and days per year the lights will be on. For this example, let’s assume 12 hours per day for 250 days a year.
• Electricity rate: Check your last electricity bill for the rate per kilowatt-hour (kWh). In this example, we’ll use an average of $0.12 per kWh.

Step 2: Calculate Energy Savings per Bulb

To find the wattage reduction for each bulb:

• Old wattage – New wattage = Wattage savings per bulb
• For our example: 90 watts – 14 watts = 76 watts saved per bulb.

Step 3: Calculate Total Operating Hours

Multiply the daily running hours by the number of operating days:

• Operating hours per day x Days per year = Total hours per year
• For this example: 12 hours/day x 250 days = 3,000 hours per year.

Step 4: Calculate Energy Savings per Bulb in kWh

Using the previous values, convert the savings to kilowatt-hours:

• Wattage savings per bulb x Total hours per year ÷ 1,000 = kWh savings per bulb per year
• In our case: 76 watts x 3,000 hours ÷ 1,000 = 228 kWh saved per bulb annually.

Step 5: Calculate Yearly Savings

Finally, calculate the yearly energy savings by multiplying the kWh savings by the electricity rate:

• kWh savings per bulb x Electricity rate = Annual energy savings per bulb
• For this example: 228 kWh x $0.12 = $27.36 in annual savings for each bulb.

If you’re replacing multiple bulbs, multiply the savings per bulb by the total number of bulbs to get your project’s total energy savings. This information helps you understand your lighting project energy savings and informs you about your ROI calculations.

Understanding Financial Incentives for Lighting Upgrades

Financial incentives are available through utilities, grants, and government programs to offset the cost of lighting products and installations. They can significantly reduce the upfront costs and help secure a bigger ROI.

Types of Financial Incentives

1. Utility Rebates: Many utility companies offer rebates for energy-efficient lighting. Rebates may cover a percentage of the total project cost or offer a fixed amount per bulb. Check with your local utility to learn about specific rebate amounts and eligible products.
2. Tax Incentives: Federal and state governments may offer tax credits or deductions for businesses that undertake energy-saving initiatives. These incentives vary by location and are subject to change, so it’s best to consult a tax professional.
3. Energy-Efficiency Programs: Some regions have specific energy-efficiency programs designed to help businesses reduce their energy consumption. For example, certain states provide grants or low-interest loans for energy-saving improvements, including LED upgrades.

For example, DCSEU is offering rebates towards small businesses and multifamily dwellings on an assortment of lighting products. They are offering instant rebates and discounts on lighting fixtures, replacements and lighting controls.

Lighting Rebate Trends in 2025

The upcoming year will begin with new rebates for businesses to apply for. Prospective rebates will be expanding the products with rebate available, such as advanced lighting controls and smart technology integration. Instant rebate amounts for LED and energy-efficient lighting are expected to rise by 10-20% to keep pace with LED technology advancements. Sustainability is a focus and business trend for many industries. This is reflected in the rebates being offered. Financial incentives are offered for eco-friendly lighting upgrades, like lights that were made with recycled materials. By lowering their carbon footprint and reducing waste, businesses can position themselves as environmentally friendly.

Final Thoughts on Lighting Project ROI

Calculating energy savings and understanding available incentives are essential steps for assessing the ROI of a lighting project. By taking advantage of financial rebates, businesses can reduce upfront costs, accelerate payback periods, and enjoy ongoing savings. To get the most from your lighting upgrade, consult with an energy efficiency expert or a rebate specialist who can help navigate available incentives, calculate savings, and guide you toward a higher ROI on your lighting investment.

Incentive Rebate360 can walk you through the entire rebate process from start to finish. For more information about improving your return on investment with lighting rebates, contact us today! Speak with our rebate experts by calling us at 610-558-9773, emailing at [email protected] or schedule a call by clicking the button below.