It makes sense on the surface: go with the low bid on your lighting package when you’re building a new commercial building. They’re just lights, after all. Who cares? Actually, those low bid lights can cost you as much as 6x more than you think. According to the U.S. Department of Energy, commercial buildings’ lighting systems consume as much as 42% of the total electricity month over month. Making a bad decision on something that uses that much electricity can be detrimental to your ongoing operating costs.
Here’s the Rub
The low bid lighting package is usually based on fluorescent, halogen, and metal halide lighting. Those types of lighting use 50-90% more electricity than more efficient options like LEDs. Not only that, those types of lighting will require 10x more maintenance and replacement than LEDs.
How Does That Work Out for You Financially?
Let’s assume your contractor comes back to you with two lighting package bids for your large commercial building. Here’s how they stack up:
- Package A: $383,000 – It includes fluorescent, halogen, and metal halide lighting. This system will cost $10,500 per month in electricity and another $2000-$5000 per year (on average over time) for regular maintenance of ballasts, replacement of bulbs, and disposal costs. The 10-year life-cycle cost of this package will be approximately $1.693M (based on up front cost plus ongoing energy and maintenance costs).
- Package B: $548,000 – It includes LED lighting. This system will cost $3750 per month in electricity and only $100-200 per year (on average over time) for regular maintenance. In addition, your A/C system will reduce load by as much as 20% (depending upon geographic location), increasing your energy savings even more. The 10-year life-cycle cost of this packagewill be approximately $910K (based on up front cost plus ongoing energy and maintenance costs, including a reduction in A/C load).
While Package B Costs 35% More up Front, it is 60% Cheaper over Time
Not only is the overall cost lower, but the asset value of your facility has increased due to a more energy efficient building, LEED® points, Energy Star® points, and USGBC recognition. Energy efficient buildings are more comfortable and stay leased more often than inefficient buildings.
In addition to being cheaper to operate over time and increasing your asset value, your employees/tenants will be more productive. According to a Cornell University study, bad inefficient lighting can lower employee productivity by as much as 2%. Conversely, high quality LED lighting can improve productivity by as much as 5%. That is a 7% swing in employee productivity that directly affects your bottom line.
Don’t Go Low Bid on Your Lighting Package
Before you go low bid on that lighting package, ask your contractor to run a 10-year energy and maintenance cost analysis on your options. Go for the most efficient package with the lowest 10-year life-cycle cost. As someone once said, “Buy the best, cry once.”
If you need assistance in evaluating your lighting package options for your building OR you want to hire a full service lighting contractor to help you install the most cost-effective lighting package, please reach out to us. We have 7+ years experience specifying energy efficient lighting in commercial buildings all over North America.