3 Strategies to Maximize ROI on LED Retrofit Projects
“Our most successful partners are leveraging networked lighting control rebates and 0% financing to provide their customers maximum savings and fast project payback periods…”
— Nick Theoret, Amatis Technical Sales
The most successful LED retrofit projects follow the same three strategies to provide building owners with the largest utility rebate, highest energy savings, and fastest project payback period. These strategies are:
- Understanding the Networked Lighting Controls Rebate from Utility Provider
- Finding a Simple Networked Lighting Control System & Strategy
- Providing Building Owners with Energy Focused 0% Financing
1. Understanding the Networked Lighting Controls Rebate from your Utility Provider
Since early 2000’s, utility companies, such as DTE, Consumers Energy, and ComED, have offered prescriptive rebates for converting high wattage lamps to low wattage LED’s, often on a $/lamp basis. However, many of these utility companies are now offering Networked Lighting Control rebates that are much more attractive than the prescriptive rebate. Unlike the prescriptive rebate, the networked lighting control rebate is based on $/kW reduced, $/kW controlled, or $/kWh saved per year. As you can imagine, this rebate can be quite substantial, especially when applying right lighting control strategies in a large space. In fact, many of the projects that we support often have a networked lighting control rebate that exceeds the cost of our controls.
“Rebates for energy-efficient products have been around for a few years, and we think they are largely overlooked, especially when it comes to networked lighting controls…”
— Cedric Kennedy, Amatis Technical Sales.
The following table is a summary of DTE’s, Consumers Energy, and ComEd’s networked lighting control rebate:
| Utility Provider | Networked Lighting Controls Rebate |
|---|---|
| DTE Energy Southeast Michigan | - Requirements: system must employ at least three energy saving control strategies and must be DLC listed. - Tier 1: $185/kW Reduced (<15ft ceiling) and $290/kW Reduced (>15ft ceiling) - Tier 2: $0.08/sqft |
| ComEd Greater Chicago and Parts of Illinois | - Requirements: system must have a reporting system. - Option 1: LED Replacement $0.60/watt reduced + lighting control system $0.25/watt controlled + $0.15/kWh saved above target - Option 2: Lighting Control System (no new fixtures) $0.10/kWh saved above baseline |
| Consumers Energy Michigan | - Requirements: system must have reporting capabilities and must employ three energy saving control strategies. - Tier 1: $0.25/kWh Saved per Year -- Commercial, Offices, Schools, and Hospitals - Tier 2: $0.18/kWh Saved per Year -- Manufacturing, Industrial, Warehouse, Parking Structures |
Although the networked lighting control rebates are highly attractive, and often cover the cost of the controls, we find that they are often overlooked for one reason: lack of information and understanding. At Amatis, our team of dedicated professionals is here to help you navigate the networked lighting control rebate of your project to maximize savings for your customer.
Ask Our Experts2. Find a Qualifying Networked Lighting Control System and Strategy
There are many networked lighting control systems available, but not all are created equal. One of the most important qualifications for a networked lighting control system is the DesignLight Consortium (DLC) rating, which signifies that the system is rated for high energy lighting efficiency. In fact, to qualify for networked lighting control rebates, as stated above, you will need to use a system that has been approved by the DLC. You can find Amatis Controls, and others, on the DLC Qualified Product List.
A networked lighting control system isn’t worth anything unless it is paired with a strong energy saving strategy. A study conducted by the DLC identified that a networked lighting control system, on average, can provide up to 47% energy savings. The following table shows the breakdown of each strategy:
| Control Strategy | Avg Savings | Description |
|---|---|---|
| Daylight Harvesting | 28% | The capability to automatically affect the operation of lighting or other equipment based on the amount of daylight and/or ambient light present in a space, area, or exterior environment. |
| Occupancy Sensing | 24% | The capability to automatically affect the operation of lighting equipment based on the detection of the presence or absence of people in a space or exterior environment. |
| Tuning & Scheduling | 31-36% | Capibility to tune light levels based on needs of the space by application, high-end trim, task tuning, lumen maintenance, group controls, and scheduling |
| Combined Strategy | 47% |
There are many DLC listed networked lighting control systems to choose from, however, there’s only one system that provides the support to help your team deploy an energy saving strategy for your project. Visit our app training page to see just how easy it is to provide energy efficiency with the Amatis Controls system.
see how simple it can be3. Providing Building Owners with Energy Focused 0% Loans
What’s better than an energy saving upgrade? A free energy saving upgrade. Depending on your region, you may have a financing program for energy saving projects. In Michigan, we are fortunate to have the Michigan Saves program, which qualifies LED retrofit projects for 0% interest loans for up to 36 months. On most projects we’ve worked on, the monthly energy savings exceeded the monthly loan payment, and therefore, the building owner had positive cash flow immediately after the system was installed. This is the opportunity for building owners.
Below is an example project that compares an LED retrofit project with and without controls. Notice the difference in rebates, the improvement in return on investment, and a positive cash flow immediately after the site was upgraded.
LED Project: Controls vs No Controls
| Without Controls | With Controls | |
|---|---|---|
| Utility Company | Consumers Energy - Michigan | |
| Space Information | Space is on 15 hours a day, 365 days a year | |
| Old Fixtures | 67x @ 220W Fluor. High Bay | 67x @ 220W Fluor. High Bay |
| New Fixtures | 67x @108W LED High Bay | 67x @108W LED High Bay |
| Cost of New Fixtures | 9045 | 9045 |
| Cost of Controls | N/A | 7464 |
| Installation Cost | 7035 | 8040 |
| Fixture Rebate | 2251 | 2251 |
| Controls Rebate | 0 | 15223 |
| Total Project Cost | 16080 | 23544 |
| Total Rebate | 2251 | $11,772 - (max incentive, 50% project) |
| Project Cost After Rebate | 13829 | 11772 |
| Energy Cost ($/kW) | $0.13/kWh | $0.13/kWh |
| Annual Savings (kWh) | 41,085 kWh/yr | 60,893 kWh/yr |
| Annual Savings | 5341 | 7916.06 |
| Project ROI | 38% (2.6 years) | 66% (1.5 years) |
| 10 year ROI | 3.8 | 6.67 |
| Monthly Finance Payment | 384.14 | 327 |
| Monthly Energy Savings | 445.08 | 659.67 |
| Monthly Cash Flow | 60.94 | 332.67 |