Improving Financial and Operational Performance Through Energy Efficient Lighting
When leading corporations and commercial real estate companies make multi-million dollar investments in energy efficient facility technologies, the economic message and the marketplace momentum are clear. Energy efficiency is a profitable business opportunity moving solidly into the economic mainstream.
In a recent study by McGraw Hill Construction Research & Analytics, 81 percent of CEOs and 70 percent of CFOs surveyed identified rising energy costs as the main driver of green building initiatives within corporate America.
Compared to other facility improvements, an energy efficient lighting upgrade is a low-risk, short payback opportunity to deliver operational cost savings and long-term positive cash flow directly to the bottom line as well as a 25–50 percent return on investment.
Go Green to Get More Green! Check out these five benefits of a lighting upgrade:
1. Reduce lighting energy costs from 50 to 80 percent by upgrading a lighting system with energy efficient lamps, ballasts and controls, such as dimming and occupancy/motion sensors. This can result in immediate and long-term savings over the 10 to 20 year life cycles of the energy-efficient equipment.
2. Rapid payback and rate of return. Depending upon hours of operation, a lighting upgrade produces immediate energy cost savings and will typically achieve payback in two years or less, yielding an exceptional return on your investment.
3. Leverage utility rebates and load reduction incentives. A broad range of utilities offer rebates for the purchase and installation of energy-efficient equipment such as lighting to encourage facility owners to reduce energy consumption. Rebates, which vary from utility to utility, can hasten payback by reducing project costs up to 40 percent.
4. Reduce maintenance and equipment costs. Energy efficient equipment has a significantly longer operating life compared to standard products, resulting in a substantial savings in maintenance, labor and replacement costs.
5. Federal Energy Policy Act (EPACT) tax incentives. EPACT provides income tax deductions for specific investments that improve the energy efficiency of either an entire building or certain building systems including lighting by reducing energy use to specified limits. EPACT tax deductions for lighting start at 30 cents per square foot for a 25 percent reduction and can be as great as 60 cents per square foot for a 40 percent reduction. There is an equal and corresponding state income tax deduction in most states.
