Everyone has heard a lot about LED lights in recent times, and how wonderful they are for the environment around us. But what exactly are LED lights, and how can they help businesses? The answer is, they are awesome, and they give you more control over how much energy you use, which allows you more control over the money that you’ve earned.

The LED light bulb difference

LED lights were first invented in 1962, but the US Energy Department began closely examining them and working to improve them in the early 2000’s. Since then, they’ve been developed to be six to seven times more energy efficient than two incandescent lights, last 25 times longer, and cut energy use up to 80%.

How can LED lighting help you?

The priority of every business, besides providing excellent service and goods, is to generate profit, and one sure-fire way to generate more profit is by making smart decisions that enhance your business and thus increase your earnings. Switching to LED is a way to both increase your earnings and your savings- a tough combo to beat.

LED lights last an incredibly long time. In fact, they last about 35-50 times longer than incandescent bulbs, and have a lifetime rating of anywhere from three years to twenty years. Not having to buy new bulbs every few months will save you a fair amount right there.

LED lighting produce 80% to 90% less heat than traditional bulbs, which will help to keep the AC bill down. While it may not seem like you’re saving a lot of money there, keep in mind that small amounts eventually add up to one big amount. It lends credence to the old saying “a penny saved is a penny earned.”

If the first two reasons weren’t good enough, LED bulbs only use about 20%-25% of the electricity that that traditional incandescent bulbs use, which reduces your bill even more.

The ROI of LED installation

Obviously, every business is different, and so is the amount of energy that they use, too. As a result, some people have a harder time trying to figure out what exactly their ROI- return on investment- would be with LED lights. Thankfully there’s a calculation that can help you come up with the number.

All you need is the cost of the investment, the savings, and the period of time you want to look at. Usually people try to calculate the ROI for one year. The formula for finding the ROI is the savings minus the cost, divided by the cost, and you turn that into a percentage. So let’s try this formula out to see how it works. Please keep in mind that this is a hypothetical example, and doesn’t actually reflect what kinds of costs or savings you might get- it’s just to show how the numbers work in practice.

$1000 (savings) minus $200 (cost), divided by $200 (cost), equals 400% (because we turn the resulting number into a percentage). So that’s a 400% return on investment. That’s a pretty amazing result.

Will all these great benefits that come with LED lights, it’s certainly worth every business owner’s time to examine what kind of impact they can have on your operation by switching to LED.