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11/22/11 The Comprehensive Potential of LEDs in U.S. Commercial/Industrial Operations

Article- November 2011 By Larson

Highbay LED Light

Larson Electronics Highbay LED Light

One of the biggest expenses associated with industrial and commercial operations is energy usage. Almost every type of commercial industry requires energy to function, from simple warehousing and distribution of goods to full on manufacturing and processing plants, and as the cost of energy increases, so too do operating expenses. When we think of the electrical energy consumed by such operations, we invariably imagine huge automated assembly lines and giant electric motors powering massive machinery as it churns out a steady stream of finished product. It would seem that with all this serious machinery in operation, it's no wonder then that industrial operations are a major consumer of electrical power in the United States. However, this appearance is deceiving as the actual mechanical processes of industrial/commercial operations are not the biggest culprit behind these sectors' electrical energy use. 



Although industrial manufacturing operations in the U.S. have seen some stagnation in growth in the last decade due to outsourcing of production to other countries, U.S. industry continues to account for about 33% of total electricity use. Interestingly, this consumption is in large part due not to the actual industrial processes such as manufacture, refining, or processing, but to illuminating these operations. In the commercial/industrial sector, lighting accounts for approximately 40% of the electricity consumed during operations and a combined 69% of all the energy used for lighting in the U.S. according to the U.S. Department of Energy.



As we noted above, outsourcing of industrial operations to overseas locations is in part responsible for the usage of energy by U.S. industry remaining somewhat flat over the last ten years. While on the surface this would appear a beneficial byproduct of outsourcing due to the reduced energy requirements associated with such a shift, as has been noted quite a bit in the media recently due to the volatile economic climate, the loss in productivity and jobs as well as international trade standings far offset any beneficial savings from reduced energy consumption. Additionally, this stagnated energy consumption within the industrial sector has had little effect on overall electrical power consumption nationally, which has steadily increased due in large part to rapid expansion in residential home numbers and an increasing level of electricity reliant technology within the private sectors. Although electricity use in the commercial/industrial sector has seen little growth since the 80’s, increased use in other sectors and concerns with energy supplies have served to continue the climb in the cost of energy. As a result, commercial/industrial operations have seen reduced revenue because of reduced production as well as an increase in energy costs, all leading to difficulty with maintaining competitiveness in a worldwide market.



If we consider the potential that energy efficient lighting technology holds for reducing the overall cost of producing illumination, it’s important to note the dominant forms of lighting being used commercially. Although the incandescent lamp remains dominant in the residential sector, in commercial/industrial applications the fluorescent lamp is the main source of large scale illumination. Fluorescent lighting makes up most of the lighting in the commercial sector, while HID and fluorescent sees the most use in industrial applications. Both fluorescent and HID lighting technologies are substantially more efficient than incandescent. This would make it appear that lighting in the commercial/industrial sectors holds little potential for significant improvements in efficiency. However, the last ten years has seen a substantial improvement in LED lighting technology which holds efficiency potential that spans a much wider range than simple energy efficiency. While LEDs are only now reaching a luminous efficiency equivalent to fluorescent lighting, and still trailing behind HID systems, their extreme long life, cooler operation, durability and extreme ruggedness allow them to surpass other forms of lighting when considered in a comprehensive manner.



For example, a typical 20,000 square foot industrial building can see lighting costs in excess of $14,000 annually. With a complete retrofit to LED lighting technology, projections show that lighting costs can be reduced to approximately $4,500 annually. Additionally, over $400.00 a month can be saved on bulb replacements, $1,000 a month on maintenance, and even the reduced air conditioning requirements due to the cooler operation of LEDs can add an additional $300.00 per month in savings. As can be seen, this a major improvement over current lighting technologies that once initial outlays for installation are recouped, represents a clean increase in net profitability. One of the caveats often cited for the reluctance of companies to make the switch however, is the high initial cost of LED lighting systems. While it’s true that LED lighting costs significantly more than incandescent or fluorescent systems, in applications where efficiency was very poor, the return on investment from improved efficiency alone can very often be realized in less than two years and sometimes as soon as one. Also, with state and federal programs offering incentives and tax credits for companies that make the switch to energy efficient lighting, initial outlay can often be reduced by over 50%.




Current LED technology is already at a level allowing practical application in almost any industry. The fluorescent fixtures common to warehouses and the high bay metal halides common to industrial settings can both be effectively replaced by LED lighting. High bay LED lights and LED tube lamps designed to act as direct replacements for fluorescents offer substantial improvements in not only efficiency, but light quality as well. Particularly in industries where close work, inspection, high speed production and high levels of quality control are critical, lighting has been shown to have a significant impact on productivity and safety. With the improved light levels and color rendering of LEDs also comes improvements in these vital areas, further serving to underscore the vast potential LEDs hold. Real world examples proving the potential of LEDs are already growing in number, and this number is increasing as more companies begin to embrace LED lighting technology. Some of these examples include:

Applebees in Doylestown Pennsylvania which reduced lighting expenses by 88% with the installation LED lighting equipment.

Invesco Field Stadium in Denver received an upgrade to LED “Wall Washer” lights in February 2011, leading to a 72% reduction in energy consumption and more than $5,000 in annual cost savings.

The cities of Madison, Wisconsin and St. Paul, Minnesota retrofitted all of their traffic signals with LEDs and now enjoy a savings of $360,000 annually.


While reducing energy consumption across the board holds great potential for reducing the United States’ dependence on fossil fuels and foreign energy sources, this is not the only significant area of improvement. By instituting higher energy efficiency standards and switching to alternative forms of lighting such as LEDs, industrial/commercial operations stand to improve their position and competitiveness on the world markets through reduced operating costs and improved productivity. Such improvements wil also serve to benefit the United States economy as a whole as its manufacturing base regains strength and grabs a larger share of the global markets. Assuming that current lighting efficiency standards set to take full effect in the next two years survive the latest efforts in congress to reduce their scope or repeal them entirely, improved lighting efficiency in the commercial/industrial sector could play a larger role in the U.S.'s economic reovery than most realize.



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