Tag Archives: Rate of return

Nothing Out Of Pocket For LED Lighting

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LouMan MoneyI know it sounds a little “pitchy” but in fact, this is 100% a true story. Our company has recently started a finance program appropriately titled “LouMan Money®” in order to fund Lighting Solutions for our commercial clients. LouMan Money® provides not only the financing for lighting products, but will also include all design, install and even disposal or recycling costs for the products being removed.

So what does this all mean to you? I am glad you asked!

Lets say we use our fancy analysis tool, the Lampinator®, to figure out what you’ve got  for existing lighting and what LED products we’ll put in to replace it. For the sake of this example, lets say that we determine we are saving you $10,000 / year with an initial cost of $20,000 in product, installation, etc. So, that’s pretty easy math, right? $20,000 will take exactly two years to reach “payback”. Then, we can dig a little deeper and calculate ROI (Return On Investment) based on the expected life of the state-of-the-art LED products. Lets use 10 years for the sake of this example. So how does the math look so far?

  • Investment: $20,000
  • Annual Savings: $10,000
  • Payback Period:  2 years
  • Life of new LEDs 10 years

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LED Lighting LED SourceSo based on the above, your eventual ROI (not including rate increases, inflation, etc) will be (savings) 10,000 X (life in years) 10 – (Investment) 20,000 = $80,000. Yes, it’s true. In 10 years, you will have earned a profit of 80,000 on your initial investment of 20,000. Sure, some will say “but what if those products don’t last the full 10 years”… well, even though the rating on the lamps may be as long as 20+ years, lets say they ONLY last the 5 year warranty… you’re still looking at a $30,000 profit on the 20,000 investment.

The argument then can only be “well, we’ve been through a rough 5 or 6 years with this crazy economy. For our business to put $20,000 into lighting products, when our lights are working perfectly makes little sense to us”. I understand. Trust me, in my own businesses, it’s hard to justify investments in anything other than staff and inventory.

The answer is this. “Invest someone else’s money!” This is where we come in. LouMan Money® allows our clients to pay for the entire project, from start to finish, with other people’s money. We match the payment closely to the savings, then give you all sorts of options on what you want to do. Lets say for example:

  • Project Total: $20,000
  • Monthly Savings:  $833
  • Down Payment:  $0
  • LouMan Money 24 mos: $891
  • LouMan Money 36 mos: $612
  • LouMan Money 12 mos: $1,726

So, using this example, if you pay for the lights over 36 months, you’re seeing Positive Cashflow from month 1 of $221 from the very first month. You’ve paid nothing out of pocket, there are no personal guarantees (in most cases) and only the LED lighting serves as collateral. Yet, you are realizing savings month one!

You also have options to pay for the lights in a shorter, or sometimes even a longer period. The flexibility is there.

LouMan Money® offers so many more benefits including easy application process, the availability of master lines (allowing you to approve multiple locations at once, but ship only as needed), and much more. Heck, we can even easily finance governments and municipalities! The goal is only to provide as many businesses as possible with better lighting solutions, improving the world and your bottom line while we do it.

For more information on LouMan Money® or LED lighting products, visit www.LEDsource.com or call (866) 900-4LED (4533).

High-Rise Condos and LEDs – Part 2

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In a previous blog, I discussed the use of LED lighting in the high-rise condo market, mainly focusing on the interior portions of the high-rise and the property manager’s responsibility to their tenants.  I will be focusing on another section of the typical high-rise condo, parking garages and site lighting.

Parking garage and site lighting are some of the highest energy consumption light fixtures on the property.

The majority of the parking garage fixtures are typically on 24/7 by code requirements.  Usually these fixtures are at least 250 Watt Metal Halide and are on 6-8 ft. centers.  In the instance of a 5-story parking garage, there could be upwards of 300 lighting fixtures.  It is pretty easy to see, just how fast the energy costs can become substantial!

The numerous LED replacement fixtures on the market for this application fall in the 70-80 Watt range. In most applications, a one-for-one replacement can be done and an immediate energy savings are achieved.  Once the installation is done, there will be NO maintenance required –  NO lamp replacement and NO ballast replacement.  When all of these elements add up, energy savings and no maintenance, the Return On Investment is typically 2-3 years.  After the ROI is achieved, the installation becomes a positive cash flow generator due to the energy and maintenance costs savings. Last but certainly not least, the quality of lighting is much higher with LED lighting.

Another popular LED retrofit among property managers is site lighting.  Site lighting is defined just as it sounds – any type of lighting fixture that illuminates the site.  These fixtures could be wall packs, floodlights, parking lot fixtures, etc.   The site lighting is essential to safety of the tenants and the overall perception of the property. Most of these current fixtures are in the 200 to 400 Watt range.

An LED retrofit  for these fixtures are typically in the 40 to 90 Watt range.  As you can see, the energy savings, again, add up pretty quickly.  Since retrofitting with LED lamps means NO lamp replacements and NO ballast replacements, the ROI typically less than 2 years.

The biggest impact fixtures in this category have are parking lot fixtures on site.  These existing fixtures are typically High Pressure Sodium fixtures that will output a “yellowish” light, a very warm output. This is typically around a 2700-Kelvin temperature.

With an LED Retrofit, the output can not only be a specific color temperature, but it can also be focused on a particular area, without the “hot spots” associated with High Pressure Sodium fixtures.  These fixtures also have the ability to dim to a specified level when needed, such as after heavy traffic times.  Once again, another energy savings feature, which translates into money savings.

In a high-rise condo the property management firm is responsible for operating the building on a budget, and saving money is at the top of their list of priorities.  Money saved from the use of LEDs can go a long way in helping other areas of expenditures.

For more information on LED lighting, contact the LED lighting experts at LED Source®.

High-Rise Condos and LEDs

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LED lighting technology is advancing rapidly, which can make it hard for the general consumer to keep up. It is the responsibility of the property management firm to keep your property maintained and operating within a budget.  It is also their responsibility to keep the property up-to-date with the latest and greatest in energy-saving technology.

There are many choices when choosing LED technology. Usually the first step a Property Manager will take is to work in phases and retrofit their existing light fixtures with an LED lamp.

There is an LED lamp for virtually every traditional lamp out there. Two of the most popular and cost-effective lamps that are typically the first to be replaced, which are the A19 incandescent lamp and the MR16 halogen lamp.

The A19 lamp is the most widely used lamp overall and they are usually between 60 and 100 Watts and can last up to 1300 hours.  These lamps are used in everything from tabletop lamps and chandeliers, to bathroom vanities.  As you can imagine, the energy consumption can add up when using a 100 Watt light source with most applications using 3-6 bulbs at a time.

The LED alternative to the A19 lamp consumes between 8-12 watts and last for 50,000 hours.  The math is simple. Reducing the wattage used by 75-80%, the Property Manager is saving energy and therefore saving money. Because the lamp can last for 50,000 hours rather than 1300 hours, there comes a point during the life of the lamp that it will end up paying for itself.  This is referred to as Return on Investment or ROI.


The MR16 LED retrofit has rapidly become popular due to advancements in heat dissipation and the brightness of the white LED.

MR16 halogen lamps typically consume 20-50 watts per lamp and only last 3000 – 4500 hours. They also usually run on a 12-volt transformer system for each lamp.

These lamps are used to accent artwork, recessed in the ceiling or are sometimes used in landscape lighting.

The LED alternative to the MR16 halogen only consumes 4-10 watts and is rated to last up to 50,000 hours.  Once again, the math is simple. Saving energy equals saving money.  The ROI on these lamps typically happens quicker than on most, due to the fact that they usually operate 24/7 in most applications.

As stated before, there are numerous other lamp styles on the market that can be retrofitted with money-saving LED technology.

In a high-rise condo the property management firm is responsible for operating the building on a budget, and saving money is at the top of their list of priorities.  Money saved from the use of LEDs can go a long way to meeting the budget goals.

Stay tuned for future blogs where I will be discussing the replacement of fixtures and the rapid Return On Investment.

For more information please contact the LED lighting experts at LED Source. 866.900.4533.

LED Lighting Return On Investment

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As many of you know, the big draw to LED lighting is the fact that they pay for themselves. By reducing energy consumption and lowering maintenance cost, an LED retrofit will save enough money that the job will be paid back in full. It’s always great when a customer can really see the benefits of making the change to LED lighting.

I got an email from a gentleman who was the chief engineer at a large hotel in South Florida. He was interested in landscape lighting for the front entrance and pool area. I called him up and scheduled a meeting, drove down to his hotel and started the survey. We walked around the hotel and discussed his options with landscape lights. I had a few samples I was able to show him. It was looking to be a big job.

As I walked through the lobby and hallways of the hotel, I noticed it was using only halogen MR16 Lamps. Up to this point, nothing had been mentioned about retrofitting the MR16s to LED. I told him about the saving he could achieve by switching to LED lighting and he had mentioned to me that he had never even thought LEDs were an option.  I was able to find out that he was using 350 35-watt halogen MR16s that were burning 24 hours a day. But at the end of the day, he made it very clear that the landscape lighting was the main focus. I finished the meeting and told him that I would get him the estimate.

With the MR16s still on my mind, I went back to the office and began working on the ROI for just the MR16s. This hotel’s ROI on only the MR16s was incredible. By switching to LEDs, they would pay for themselves in 4 only months. So I decided to do two separate estimates. The first one was with just the landscape lighting as requested by the engineer, and the second was the landscape and MR16s. By retrofitting both the landscape lighting and the MR16s, the ROI was about 9 months. I presented the estimates to him in this fashion. Needless to say the engineer was floored. It changed his whole outlook on the project. All of a sudden the job went from $9,000 to $20,000 and they get a far better Return On Investment.

Being able to show a customer the money-saving potential of LEDs along with the ROI is what makes the sale. With the massive energy reduction, virtually no heat output, and long life span, LEDs are the best return on investment.

For more information on LED lighting, contact the LED lighting experts at LED Source 866.900.4533.

How Hoteliers Are Using LED Lighting And Why?

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More than any other large properties, hotels and resorts can take advantage of the great benefits offered by LED lighting because these facilities have a fixed operating cost for heating/cooling and lighting in all their common areas. While the facility may not always be operating at full occupancy, all the lighting in their lobbies, hallways and other common areas are operating 24 hours a day, seven days a week.  This makes these areas the best place to start either a retrofit or new installation project, as the Return on Investment (ROI) offers the quickest payback.

An LED lamp or fixture will last 50,000 hours – that’s more than five years operating 24 hours a day, seven days a week before it requires changing. On the other hand, an incandescent lamp may only run from to 2,000 hours, which is less than two  months operating 24 /7. This means the incandescent lamps would need to be changed at least 24  times in the same five years as the LEDs. It’s not difficult to see why the LED alternatives offer a very good ROI.

As nearly all hotels have felt the effects of the economic slowdown, it’s become common practice for them to look into ways they can reduce their operating costs.  By looking at these costs they need to become more efficient with their use of power and lighting, but many turn to the least costly fix in the short-term, which is shedding staff. In doing so, they’ve ended up with less maintenance staff to cover the everyday tasks, which include lamp changing. As the areas we are looking at are normally high ceilings or have high customer traffic, it makes the task of lamp replacement difficult. The task requires special lifts or towers, or may not be achievable until early morning hours when traffic is at a minimum. But staff or mainly contractors are on a higher hourly rate, which adds to the cost of lamp replacement but makes the ROI for LED even better.

What about fluorescent? Although they are more efficient than incandescent, they still are 50 percent less efficient than LED and the lamp life is five times less than LED. The other negative is they contain harmful mercury so must be disposed of properly and collected by a licensed company that – you guessed it – charge for their services. Though fluorescent lamps are more affordable and do last a decent amount of time, they have high color temperature, low Color Rendering Index (CRI), are only dimmable with expensive dimming ballasts, have limited lamp types and no spot light or MR16s – which are widely used and have LED alternates.

LED lighting is now a very attractive solution: Most products are dimmable using the systems already in place. They have a good range of color temperatures and high CRIs – which relates to how well colors are seen under the light used. To be able to see the real colors in fabrics and floor coverings, not to mention food and skin tones, a higher CRI is more desirable.

Lastly, with many government incentives available now is the best time to look at changing your lighting to a better quality, longer lasting and more energy-efficient system. And you may even qualify for a rebate, which makes the ROI all the better!

About the Author:

Gavin Cooper, Vice President and Partner at LED Source, is known as the “MacGyver of LED lighting” throughout the industry. A true Expert in LED Lighting, Gavin is responsible for the LED product lines and continues to find new groundbreaking technologies that keep LED Source® ahead of the wave. Through his varied background in lighting manufacturing in Europe, Gavin has helped to pioneer changes in LED lighting here in North America.

Lighting the way with LEDs

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From the magazine AAHOA Lodging Business

February 2011 – Volume 10, Issue 2

The environmental benefits are numerous and as costs continue to decline, hoteliers may come to understand how LED lighting can benefit their bottom line. ALB explore the market…

Before upgrading or replacing certain equipment, hoteliers always have to carefully weigh the positive and negative risks associated with such decisions.

When it comes to an already large expense like hotel lighting, owners have to weigh the front-end investment costs versus the back-end return on investment.

LED (light emitting diode) lighting has become an attractive alternative to the compact fluorescent lighting and incandescent bulbs that have been the industry standard for years.

The LED is the most energy-efficient lighting solution currently available on the market. LED lights do not contain mercury or other toxins, are 300 percent more energy-efficient than compact fluorescent lighting and around 1,000 times more efficient than incandescent bulbs.

Gavin Cooper, vice president and partner with LED Source, argues the environmental impact from LED lighting is the biggest argument for switching.

“Less energy means less carbon emissions from power plants, plus the reduced load to the grid allows expansion without the need to build new power plants,” he said. “There is no mercury content in LEDs like fluorescent lights, which means it doesn’t find its way into our rivers and streams. Also, at the end of the LED’s life, the lamp is recyclable.”

The U.S. Department of Energy estimates rapid adoption of LED lighting in the United States over the next 20 years would reduce electricity demands from lighting by one-third, eliminate 258 million metric tons of carbon emissions, eliminate the construction of 40 power plants and create financial savings that could exceed $200 billion.

While many hotel brands concur with Cooper’s assessment of the environmental benefits of LED, the prohibitive costs of purchasing and installing the lighting has prevented hotels from completely turning to the technology.

“LED lighting is being used in public area decorative lighting more and more but is still not being used for task or way finding lighting due to the expense of these types of fixtures.” Dennis McCarty, vice president of technical services for InterContinental Hotels Group (IHG) Americas, said. “As the cost comes down, J believe we will find their use start to take hold in these areas.”

As part of its $1 billion global rebranding program, Holiday Inn in 2009 began to incorporate the GE Tetra LED lighting system into exterior signage on over 3,200 hotels. Holiday Inn estimates the brand will save 53 million on maintenance costs and $1.4 million on energy savings every year.

“The up-front cost is more than signage with neon, but the long-term benefits far outweigh the initial investment,” McCarty said. “Over the life of the signs, hotels will save on energy consumption and maintenance as the LED lighting has a very long life, minimizing the need for service every couple of years.”

Cooper said the goal for LED manufacturers is to produce products that “look and behave like the ones they are designed to replace.”

“Take a PAR 38 light bulb, for example, used in a lot of hotel lobbies as a spot or general illumination lamp,” Cooper said. “Most are 75 or 90 walls and last on average 2,000 hours. The LED replacement is just as bright, produces very little heat and consumes around 18 to 20 watts.”

Cooper also noted that after 50,000 hours, an LED light is only down to 70 percent of its original light output. “‘That life is extended if the lamps are dimmed at any point during the hours of operation.”

For hotels that are curious about switching, LED Source can send experts to the property to examine the entire lighting system and produce a specification for the new lamps or fixtures calculate the return on investment (ROI) and research any rebates that may be available from government, state or utility companies, which Cooper said would offset the initial cost and reduce the ROI.

Cooper estimated an ROI could occur anywhere from between six months and two years but noted the issue is really how much hoteliers want to save month-to-month or year-to-year.

“Hotels would be wise to upgrade anything that is used for more than six hours per day,” Cooper said. “This is where the best ROI will be seen. The only circumstances where it may not make financial sense is if they have low energy fluorescent lamps in the guest rooms.”

Cooper cautions that no matter what hoteliers decide, they should always seek expert advice. “There are lots of products out there and like most things, cheap is never better. But you can also over pay for a product or use the wrong product for the application.”

Hotel brands have adopted LED lighting at varying rates but consumers may notice them more and more in the near future.

About 50 percent of Carlson’s Country Inns & Suites that opened in 2009 and 2010 used LED lighting for their exterior signage, according to Jim Grimshaw, senior director of brand program development and standards for Carlson & Park Inn Americas.

Richard Bennett, vice president of design and supply for Best Western, said there has been “an uptick” in the appearance of LED at Best Western properties and guests really enjoy them.

“Anecdotally, we are finding that guests are tempted to steal the bulbs like they did in the early days of compact fluorescent (light bulbs] due to the high cost,” Bennett said. “Pricing needs to come down more before they become common in hotel rooms.”

“While the current costs per unit are higher with LED lighting, the return on energy costs clearly benefits the hotel,” Paul Davis, senior vice president of strategic sourcing for Wyndham Worldwide, said. “The challenge is to convince owners to invest now for a future benefit. As with any new technology, we’ll begin to see higher adoption rates of LED lighting by hotel owners as the initial costs start to come down.”

Getting An LED Lighting Makeover

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Considering that traditional, incandescent light bulbs will be completely phased out and no longer available to consumers within the next three years, it’s time to start thinking about how you will illuminate your homes and workplaces. Since LED (light emitting diode) lighting is the most eco-friendly lighting solution currently available, it only makes sense to go in this direction. But what’s the first step in launching a lighting makeover?

Updating or “retrofitting” – as it’s called in the industry – your lighting will continue to become common practice over the next several years.  With so many more LED products now available, property owners have tons of options when choosing their lighting, including color, brightness, design and application.

The most important step is hiring the right LED experts to help with the retrofit process. It pays to go to professionals with a proven track record in LED lighting, a vast selection of excellent quality products from various vendors that live up to their label, and a history of successfully completed projects.

The retrofit process itself can range from a simple count of existing lamps to a very detailed energy survey, which includes collecting information from your existing lighting, such as quantity, wattage, hours of operation, energy costs, color, application, ceiling heights and spacing. The best way to justify the cost and savings and to truly see how the transition to LED will impact your business is to do a detailed energy audit of existing conditions and compare them to the energy savings and maintenance costs found on the post-LED retrofit report. This is also known as your return on investment or ROI.  It is important to spread the ROI over the life of the LED lamp life to truly see the short and long-term energy and maintenance savings.

Watch a LED lighting retrofit in action – Audi Coral Springs:

For more information or to set up your own energy survey, contact us at LED Source: 866.900.4LED [4533]. http://www.ledsource.com

LEDs In Your Retail Facility

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In 2010, 61 percent of US retailers surveyed by Retail Systems Research observed that green initiatives “make good business sense,” up from 49 percent the previous year. Those making an effort to reduce their carbon footprint are also being strongly supported by consumers.  But where should you start?

One way retailers are ‘going green’ is by updating their lighting with LED (light emitting diode) lighting. LEDs are mercury free, completely recyclable, 300 percent more energy-efficient than compact fluorescent lighting and about 1,000 percent more efficient than incandescent bulbs while using up to 90 percent less energy to run. Another perk for retailers is that LED lighting can save a significant amount of money on monthly electrical bills.

Imagine that you have a retail space with 25 in-ceiling 100-watt incandescent lamps, 50 45-watt MR16 spotlights and 40 T8 fluorescent 2-light fixtures at 80 watts total.  Your place is bright and spotlighting all of your greatest stuff.  The goal is to make it look even better with lighting that saves you money – and with the ongoing advancement in LEDs anything is possible. And you’re not just saving on your electrical bill, but also on your merchandise. LEDs do not produce UV light so they’re gentler on your products, extending their shelf life.  Now, let’s say you decide to replace your current lighting with 25 Cree LR6s (10.5 watts per unit), 50 Toshiba MR16s (4.5 watts) and 80 eFFINION T8 direct replacement units (40 watts each). In doing so, you’ve lowered your lighting usage by more than 70 percent. Since lighting can take up between one-third and one-half of your of your electrical usage, you can see how this adds up to big savings.  Also, since LED lighting fixtures do not produce heat, it can save you money on your HVAC costs too!

By installing LEDs, you will also save on maintenance costs. You won’t need to replace the lamps for over 50,000 hours! That means if you leave your lights on 12 hours a day, you’ll need a replacement in about 11.5 years. Another advantage is that you’ll no longer have to store replacement bulbs, saving you space you can monetize into additional inventory. The ROI on LED lighting technologies varies based on your particular environment, but we’ve seen paybacks as fast as 14 months.  Every month after that is all savings, and that means cash in your pocket!

For more information or to set up your own energy evaluation, contact the LED lighting EXPERTS at LED Source: 866.900.4LED [4533].