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New Lighting Technology Cuts Costs, Offers Tax Credits and Rebates

Few business solutions can have as immediate an impact as the use of LED lighting that is customizable, saves money and reduces a company’s environmental footprint.

By Marcel Fairbairn

 

As franchisors look to save money, many are finding some new spins on the 140 year-old light bulb. Franchisees and small business have enough on their plates as they oversee day-to-day operations. It’s no surprise then that something as benign as a utility bill is not always their primary concern when calculating overall operating costs. But given the savings franchisors and franchisees have amassed when switching to LED lighting solutions, maybe they should take a closer look.

By 2005, it had become clear that incipient LED lighting technology had finally reached a point that it became practical for businesses to employ it on a wide scale. As is the case with any new money-saving technology, the point was reached when the money spent purchasing and installing the technology could be supplanted with money it saved in the short-term. Moreover, the advantages the technology can provide were so great that it was obvious that LED lighting was going to be more than a trend.

Energy- and money-conscious franchisors have learned about the process of retrofitting their current lighting solutions with those of the LED variety. What they’ve found was that they stand to use less electricity to light their buildings, not only saving money and helping the environment, but in doing so using lighting that creates a visual tapestry far outshiningincandescent bulbs and fluorescent lamps.

Because franchisees have to contend with keeping their business in the black, many owners might scoff at the initial investment of retrofitting their existing lighting with that of the LED variety. Indeed, many technologies trumpeted as being cost-saving down the line may in fact do so, but down the line so long it would take years to notice any benefit. LED lighting solutions are different in that a number of benefits are immediately apparent, both in the quality of the light produced and in energy savings on  monthly energy bills.

According to the U.S. Department of Energy, quality LED lighting can last for 30,000 hours and can come with warranties of five to 10 years, numbers which are far superior to those of LED’s aging ancestors. These numbers equate to savings of 40  to 85 percent over fluorescent and incandescent equivalents. Beyond savings reported on the electricity bill, business owners throughout the United States who switch to LED lighting can take advantage of tax credits and rebates as well.

In Illinois, for example, a major utility company offers a rebate up to $500,000 for the installation of energy efficient lighting. In Vermont, the Efficiency Vermont Public Benefit Fund provides rebates of up to 100 percent of the cost of LED lighting purchased by a business. The Database of State Incentives for Renewable Energy is a great source for rebate and incentive programs available on a state-to-state basis, highlighting how ubiquitous such programs really are.

A qualified LED provider can also help cut through the red tape and find specific benefits available to a franchise on a state and federal level. Such a provider can also help find lighting solutions tailored to a client’s specific needs. With a marketplace today that provides lighting for everything from football stadiums and skyscrapers to automobile showrooms and hotels, that’s a service worth taking advantage of.

The decreased amount of energy produced by LED lighting relative to older lighting solutions also pays dividends when it comes to heating and cooling a business. According to the U.S. Department of Energy, while incandescent bulbs release 90 percent of their energy as heat and compact fluorescent lights release 80 percent, LED lighting emits very little heat. This matters when it comes to regulating a building’s temperature, saving additional money in warmer months.

When Massage Envy Spa’s corporate office approached LED Source in 2011, the company sought a way to decrease its energy use while concurrently employing more pleasant lighting befitting the franchise’s emphasis on creating a relaxing environment. The partnership was a success and in 2014, complete LED lighting packages for Massage Envy Spa’s franchisees became a requirement.

Randy Baker, a Massage Envy Spa franchisee, had particular reason to be grateful: he reported a total annual savings of $3,189 after retrofitting his location with LED lighting.

“LED lighting has paid off in so many ways,” said Baker. “LED enhances the overall ambience of the spa, and is more cost-effective to boot. The cost savings aspect has helped hold me to budget and we got the beautiful lighting design as part of the package.”

FASTSIGNS International is another franchisor that was inspired by the increasingly prevalent discussions about LED lighting as a way to cut back on energy bills while also illuminating products with more appealing lighting. Mark L. Jameson, executive vice president of franchise support and development for the company, retrofitted the company’s locations with LED lighting.

“The value of retrofitting our lighting with LED was shown not just in the positive impact it had on our centers’ appearance, but just as importantly, in the return of dollars to our franchisees’ bottom-line from electric and other savings,” said Jameson.

As legislation in countries around the world is enacted to enforce the use of more energy efficient lighting, consumers will be faced with some choices about  which lighting technology to use. With LED lighting the advantages are quite apparent, making for an easy solution.

Few solutions can have as immediate of an impact on a business as the use of LED lighting. The idiom “to see things in a new light” is never more appropriate than when such lighting is retrofitted to light a previously fluorescent-lit showroom or sales floor. And, it is better-looking, more customizable, saves money both in the short- and long-term and lessens an environmental footprint. If only all business solutions could pay off in so many ways.

Marcel Fairbairn is founder and CEO of Wellington, Fla.-based franchisor LED Source. Find him at fransocial.franchise.org.

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