Making Money from Energy Efficiency

20% of Electricity usage in a typical building is lighting. The 20% is part of the Operating Expenditure (OPEX) costed into the services or product cost. The higher the OPEX, the lower the profit margin. The business goal is to make more money. One simple agenda is to reduce cost by paying less expenses. Cost reduction is a means of making more money. Thus, making money from Energy Efficiency.

Lighting is an excellent project to drive cost reduction agenda. Besides energy saving, it is long lasting; thus, less labor to maintain, to replace fluorescent tubes and ballast. In ISO14000 or ISO50001 regulated operation, there is strict guidelines to dispose the traditional fluorescent due to the hazardous mercury content inside the tube.

As suggested previously, selecting the correct lamp to deliver the correct lux, the right color temperature, CRI and lowest light decay over time will be paramount. LED component is a solid state diode; thus, the failure point is almost negligible. If not properly integrated, majority of the failures will be around quality of light; namely, color shift and light decay below 70% (consumer can measure with a lux meter).

In the context of T8 LED tube, most manufacturers only provide warranty for catastrophic failures; for examples, DOA (dead on arrival) or ‘dead LED’ over time. The hassle to replace will be costly contrary to the cost saving agenda. Initial cost of the T8 tube is important. Not all tubes are the same. You get what you pay for. The long term repercussion can be many.

The replacement strategy should comprehend the overall product reliability for consistent light delivery over time.

Do not make the mistake of only using payback period to make a decision. The goal is the total energy saving over the life of the product. Payback time does not consider the energy savings beyond the payback period. Many manufacturers try to sell a $2 tube to demonstrate a good payback time. In some cases, even a on-site Proof of Concept (POC) period may not catch the reliability problem.

The following pictures show where the savings can come from. The higher the energy efficiency, the more savings over time. The lamp cost may be higher; but the payback and the savings over time will be more.

The highest efficiency T8 LED tube or LED lighting may cost more due to its value proposition. The tube may cost more due to high cost technology and specialty material inside the tube. You can refer many tear-down references over the internet. The following link is another good reference.

Fig. 1 100 lm/W T8 LED tube vs a 40W fluorescent lamp


Fig, 2 190 lm/W T8 LED tube vs a 40W fluorescent tube


Inefficient product consumes more energy. Energy spending is part of the cost of operation; thus, lowering profit margin. Energy Efficiency is using a more efficient product to reduce wastage. LED Lighting can save up to 70% energy. By just replacing traditional fluorescent tubes with good quality T8 LED tube, one could save about 8 to 10% of overall building electricity bill or at least 50% lighting cost.