Article in Thinking Bigger Business Magazine

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March 2011 Vol 20, Issue 3 (Copied with permission)

See the Light for Cost Savings
Reducing lighting usage can help the environment and your bottom line.

By Monica Bury

We are bombarded daily with news reports about how energy usage is going up. Some reports indicate that demand for energy will double in the next 10 years. We are competing in a world-wide race for energy resources, and there are even plans to build more power plants in our area to meet these ever-increasing needs. Energy related expenses affect your company’s bottom line, and make it difficult to hold down costs to your customers. Is there anything you can do to help reduce energy demand and save money in the process?
The answer could be as simple as turning on a light—or at least one that saves you money.

Illuminating Costs
Your business runs on energy. The costs are mostly variable, with the prices of these commodities being driven by supply and demand. Most are regulated by government agencies, and they try to keep the costs down to the end user. Still, energy costs eventually will go up.
The three primary areas that use energy in a business are production (equipment), heating and cooling (HVAC) and lighting. Lighting represents anywhere between 30 percent and 70 percent of your total energy costs. How can you reduce your lighting usage and thus add money to your bottom line?

Power Down Your Energy Needs
Having an energy audit, specifically a lighting audit, can tell you whether you are using too much energy for lighting. Inefficient lights can use more than twice as much energy as energy-efficient lighting.
Most manufacturing environments use high intensity discharge lights (HID), which typically use around 465 watts of energy per light. They also put off radiant heat that adds to your summertime cooling costs. Energy efficient lights can use at as little as 221 watts of energy per light while producing the same amount or more light. These lights also run much cooler, thus reducing additional heat output that results in more less A/C usage in the summer months.
These newer, efficient lights also have several other important benefits. The light levels they produce generate nearly 50 percent more light output than HID’s, thus improving the ambient light in an area. This improves morale, productivity and safety. These factors, along with lower maintenance costs, give energy efficient lights a big edge on existing fixtures. Incorporating instant on/off motion sensors will further increase your savings. Plus, additional savings can be found by retrofitting fixtures in office environments as well.
These lights qualify under the Kansas City Power & Light (KCPL) rebate program and, in most cases, can be expensed off your taxes in the year they are installed (EPACT). These additional cost reductions usually make your ROI for the project to between one and two years.

Below is an actual project:

Fixture Quantity X Wattage X Hours of operation /1000 = Kilowatt hours X energy rate

Existing HID Fixtures in Printing Facility
237 Fixtures X 465 Watts X 8760 Hours /1,000 = 965,395 Kilowatt Hours X $.069 electricity cost per hour = $66,612.00 per year

New High Bay Fluorescent Fixture in Printing Facility
237 Fixtures X 221 Watts X 8760 Hours /1,000 = 458,823 Kilowatt Hours X $.069 electricity cost per hour = $31,659.00 per year

Savings
Total Investment $78,093
KCPL estimated Rebate $28,672
Epact 2010 Estimated $20,731
Net Investment after Rebate/EPACT Deduction $28,690
Verifiable annual electrical savings (lighting) $34,953
Project will pay you $6,262 in first year
Project Pre-tax ROI 121.8%

Money in your pocket all subsequent years: $34,953

Old Monthly energy cost $5,551
New Monthly energy cost $2,638
Money in your pocket each month $2,913

The rebate by KCPL will be confirmed before the project begins.

As you can see, it was well worth it for this customer to replace their lights. Under the current economic conditions, or even in the best of times, it is always good to be able to lower your overhead and variable energy costs. Doing so will allow you to put more money on your bottom line.

Monica Bury is CEO of Pro Circuit, Inc., an electrical contractor performing commercial and industrial electrical and low-voltage service and construction since 1993. Pro Circuit has performed hundreds of lighting audits and installations.


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