By Steven J. Schleider, MAI, LEED-AP BD + C
president, Metropolitan Valuation Services
Reduce lighting costs — one of the highest operating expenses in a commercial building — and you increase net operating income.
Add to that the benefits of enhanced energy efficiency, better visual quality, glare reduction and positioning a building in the market more powerfully and competitively via sustainability, and reducing energy costs through lighting upgrades ultimately serves to increase property value.
The benefits of energy efficiency, whether retrofit or new-build, are numerous and compelling, but the question of what upgrades and what lighting to use is where it gets complex.
That decision is becoming even more challenging as LEDs (light-emitting diodes), long considered too expensive for energy upgrades and retrofits, are quickly becoming a game changing energy source for commercial buildings, gaining significant ground against both fluorescent and incandescent lighting.
We’re all familiar with LEDs because they have been a staple as indicator lights in electronics for years. Only recently have LED technologies evolved to become an important trend in commercial lighting.
One of those technological advancements is the ability to produce white light as opposed to red, green and blue which is most recognizable to consumers in small appliances, clocks, signs, traffic lights and holiday decorations.
LEDs emit light when an electrical current passes through it. That is one of many vast differences among LEDs, incandescent and fluorescent lighting in how they operate.
LEDs use at least 75% less energy than incandescent lighting and last up to 50 times longer (two to five times longer than fluorescents).
LEDs also use energy more efficiently because they emit light in specific directions, with heat drawn away via what is called a heat sink, while incandescent and compact fluorescent bulbs emit heat in all directions, releasing a tremendous amount of energy as heat. Thus, LEDs also reduce cooling and maintenance costs.
With LED’s longer life span, there are considerably fewer bulbs to change which also lowers replacement costs. LEDs do not burn out as traditional bulbs do.
Instead, they dim over time — a long time — with a life cycle determined by a decrease of 30% in “lumen depreciation.”
How does that translate in real dollars? In April, the U.S. Department of Energy released a report about LEDs vs. traditional lighting sources (Adoption of
Light-Emitting Diodes in Common Lighting Applications) with estimates of current and potential savings in nine markets.
Their findings were that if the markets made the switch to LEDs overnight, annual source energy savings could approach 3,873 tBtu, or about 3.9 quadrillion Btu (quads), saving nearly $37 billion in annual energy costs. This amount represents approximately half of the total national lighting energy consumption in 2012.
The Department of Energy is also on record that solid state lighting systems (SSL technologies of which LEDs are one) have the “potential to reduce U.S. lighting energy usage by nearly one half and contribute significantly to our nation’s climate change solutions.”
What then are the downsides of LEDs? For one, initial cost. They are more expensive than traditional lighting choices. Property owners and landlords must be willing to make a significant investment on the front end to achieve significantly lower costs in the long term.
For another, poorly designed and manufactured LED lighting can result in flickering, color change, poor light distribution, delays in response when turned on or produce heat when turned off. LEDs should carry the UL or ETL certificate to demonstrate quality control.
Additionally, as LEDs are new to commercial building usage, a poor design lighting plan can greatly impact its benefits and there are still major challenges in areas such as parking lots, garages and site lighting.
But LED lighting technology continues to evolve. With ongoing improvements in manufacturing, quality is improving. Costs are decreasing as demand skyrockets. Competition is fierce and with good reason: LEDs last much longer than traditional lighting products, therefore, on-going labor and material expense is lower.
That is good news for property owners who, if they have their finger on the pulse of the market, know that LED lighting is revolutionizing the lighting market.
In addition to all of their tangible benefits, LEDs are adaptable for retro-fit of existing fixtures and easily incorporated into contextual design ideas.
They are cool, literally and figuratively, and, as such, capable of attracting tenants lured by upscale technologies that offer smart, environmentally-friendly, energy efficient “cutting-edge” features.
The smart money is on LEDs being phased in over time and replacing both incandescent and fluorescent lighting as LEDs decline in cost in tandem with the continuing ascendance of the desire to live and work in green building
