7 Helpful Insights to Convince Your Boss to do a LED Lighting Retrofit
September 5, 2018
Convincing your boss to do a LED lighting retrofit can be a daunting task. The typical conversation points are the savings from energy reduction and the lessened maintenance costs. These savings can be quite substantial, but for a retrofit project, the number that is eye-popping to your boss is the upfront costs.
The reality is big expenditures for a lighting retrofit project rarely get approved rapidly. And in fact, sometimes the sheer size of the project can delay quick ROI and practical projects for years.
Like many of our knowledgeable lighting customers who have had trouble getting Cap-Ex approval for energy savings lighting retrofits, maybe one or two of the ideas in this blog can help you push through your project and start saving your company money.
Key Steps to Convincing Your Boss to do a LED Lighting Retrofit
1. Break a Project Down
Start with the highest burn-time, highest energy consumption, and highest maintenance costs. Bosses can be convinced to start small and start with the lighting that will provide the greatest savings. This is also a great way to test pilot a project, so everyone will see not only the energy savings but how the lighting will look in or around your building.
2. Show the Money Savings
Savings talks. By presenting a project on just how much the company could save from a retrofit to more energy-efficient lighting, and longer life products will often help “close the deal” and get a project approved quicker. Show the dollar amount conservatively and do it based on the product energy savings.
3. Show Total Cost of Lighting
There are four categories that make up the cost of your lighting. When you are using conventional lighting those categories and the allocated percentages are:
- Lighting Energy – 76%
- Labor – 12%
- HVAC Energy – 9%
- Materials – 3%
*These percentages may fluctuate by geographic regions and type of building
Lighting energy as you can see is the biggest consumption of energy – but also “the low hanging fruit” and efficiency in energy should be the first driving factor. When calculating the total cost of your lighting be sure to include all of the cost factors
4. Express the Quality and Lighting Performance
Do your stores need an update? Better visibility, a safer customer environment? Express that the stores will have better visibility, the customers will feel safer, and you will have better lighting performance. LED provides better CRI (color rendering index or color temperature variety), dimmability, and compatible with lighting controls.
5. Be sure to Emphasize the Maintenance Savings and Benefits
Point out how much time can be saved – internal resources that can be spent on other projects and maintenance needs. Incorporate a 10-year warranty if possible. Think about that – at a minimum, you have eliminated lighting service work for 5 years and potentially up to 10! Put a dollar amount to it if you have your annual lighting service expense.
6. Research the Rebates to Reduce Your Costs
We all know about rebates but depending on the size of the project this is something you can do yourself or employ a rebate management company. If you employ a rebate management company the will take a percentage of the rebate as their processing fee. If you are managing the rebate yourself make sure to understand the timeline and product requirements if they require pre-approval.
Another very important factor about the rebates is to be sure the product you select is approved with the utility company.
7. Consider Lighting as a Service (LaaS)
If enough capital money is not available, obtain a proposal from the vendor to finance the project through LaaS. LaaS allows you to fund the project with energy savings. It utilizes a subscription base procurement method that includes funding product, installation, and monthly, bi-monthly, or quarterly maintenance monitoring.
Lighting projects, while necessary and very important to the aesthetics, can often put a real strain on the monthly cash-flow of the business. This is where lighting-as-a-service really adds value to owners. This program allows you to install the necessary lighting immediately, while simultaneously allowing your company to conserve cash to run their business. The monthly payment is classified as an operational expense keeping your capital free for investment in your business.
In conclusion, we know that businesses are trying to conserve cash and do more with less. Additionally, we know that it’s easy to get “sticker shock” when seeing the price tag for an LED retrofit. However, it is important to look at the soft-costs and hard costs associated with older more traditional lighting. Things like maintenance, high energy costs, and lower quality lighting.
Finally, evaluate alternative pricing options like lighting-as-a-service. Programs like this can allow you to conserve precious cash, while simultaneously allowing you to increase lighting performance, lowering energy costs, and decreasing maintenance costs. If you have any questions about this or what an LED lighting retrofit might look like for your business reach out to us here at Action Services Group.
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Facility Manager – Casual Dining Restaurant and Sports Bar