The Business Case for LED Conversion
For facility managers and procurement teams, the decision to upgrade to LED is no longer a question of technology preference — it's a financial calculation. With energy costs rising and LED prices falling, the ROI case has never been stronger.
Energy Consumption Comparison
| Light Source | Typical Wattage | Lumen Output | Efficacy (lm/W) | Lifespan |
|---|---|---|---|---|
| T8 Fluorescent | 36W | 3,200 lm | 89 lm/W | 15,000 hrs |
| Metal Halide (HID) | 400W | 32,000 lm | 80 lm/W | 12,000 hrs |
| High Pressure Sodium | 250W | 25,000 lm | 100 lm/W | 24,000 hrs |
| LED Panel (office) | 36W | 4,000 lm | 111 lm/W | 50,000 hrs |
| LED High-Bay | 150W | 22,500 lm | 150 lm/W | 50,000+ hrs |
Real-World Payback Calculation
Consider a warehouse with 200 x 400W metal halide high-bays, operating 16 hours/day, 300 days/year:
- Current annual energy cost: 200 × 0.4kW × 16h × 300 days × $0.12/kWh = $46,080/year
- After LED upgrade (150W): 200 × 0.15kW × 16h × 300 days × $0.12/kWh = $17,280/year
- Annual savings: $28,800
- Typical LED upgrade cost: $60,000–$80,000
- Simple payback period: 2.1–2.8 years
Hidden Costs of Traditional Lighting
Energy is only part of the story. Traditional light sources also carry significant maintenance costs that LED eliminates:
- Lamp replacement every 1–2 years vs. 10+ years for LED
- Ballast replacement and associated labour
- Lamp disposal costs (mercury-containing fluorescent tubes)
- Production downtime during maintenance
Conclusion
For most commercial applications, LED conversion delivers a payback period of 2–4 years and a 10-year total cost of ownership that is 40–60% lower than traditional alternatives. With government incentives and carbon reduction targets adding further pressure, the question is no longer whether to upgrade — but when.