Savings and Incentives for Lighting Upgrades


One of the biggest obstacles to performing upgrades of existing lighting systems is the oftentimes high initial cost. Although new energy standards that affect the availability of older lighting types still in use will force the decision for many, those who act before a particular lamp type becomes unavailable stand to gain the most benefit. Those who make the switch to more efficient lighting designs will obviously reap rewards in the form of reduced annual energy and maintenance costs, however, depending on direct savings from increased efficiency and longevity alone can prolong the length of time it takes to realize a positive return on initial investment. There are opportunities available for those seeking to upgrade but hesitant due to the costs involved, and taking advantage of these opportunities can significantly shorten the period between initial investment and a positive return.


When the US federal government put into law more stringent energy standards, lighting was one of the areas where a direct impact would be felt by consumers. Lighting technologies unable to meet new efficiency criteria would no longer be legal for sale of manufacture in the US once the legislation was fully enacted, which in turn meant that consumers would have no choice but to consider alternatives. Since it was recognized on both a federal and local government level that making the switch to more efficient lighting technologies could be a costly affair, the federal government and many state and city agencies made available incentives which help to offset these costs. This is an important aspect of meeting compliance with new regulations as not only does it make upgrading more affordable for those who qualify, but it increases the speed with which the nation as a whole reduces its dependence on fossil fuel sources and lowers its production of environment damaging  carbon and CO2.

The main problem for those considering taking advantage of these federal and local incentives is the limited time frames during which they will be available. The opportunity to take advantage of some has already expired as of January 2013, but there still remain several available which can help to greatly offset the initial cost of a lighting retrofit or upgrade. It’s also important to note that most of these incentives target the industrial/commercial sectors as these are the areas where the greatest costs and benefits can be realized and the greatest beneficial impact on energy conservation as a whole will be made.

One of the first places to investigate the potential for upgrade incentives should be with the utilities providers providing your services. These providers often offer rebates and discounts for those who install equipment which meets the requirements for improved efficiency. The utilities providers also often work with a third party which act as a liaison between the customer and the provider to help speed the process of upgrade and benefit. Whichever route you choose, the savings from such an approach can be significant enough to have a substantial impact on initial cost outlay and ROI rate. Whereas an upgrade may take up to two years to begin providing returns in the form of reduced costs, these rebates and discounts can help reduce that period by several months in some cases.

Another good approach is to consult with the Federal Department of Energy in order to determine if your facility or business can qualify for incentives. These departments can direct you to the programs available in your state as well as provide information on available federal incentives.  The Energy Policy Act of 2005 helped to enact a commercial building tax deduction program designed to help businesses reduce the effect of costs from lighting upgrades. Depending upon percentages outlined in EPAct 20005, buildings which achieve power density reductions below these percentages can qualify for tax reductions equaling 30 and up to 60 cents per square foot of building space. For large operations, these kinds of savings can be significant and greatly effect the rate of return on initial outlay.


Lest you feel that the average consumer and homeowner is being left out of these potential benefits and incentives, there also exists the potential for those in these categories to reap rewards for energy efficiency as well. Under the LEED (Leadership in Energy and Environmental Design) program, commercial and neighborhood projects can be evaluated for efficiency benefits according to set criteria. Some of the benefits available by meeting LEED criteria include an energy efficient home tax credit that targets builders, utility incentives available through local utilities service providers, the potential for lower insurance premiums, and even lending and closing credit incentives for new home buyers who choose a home that meets LEEDs qualification standards.  Residential homeowners can also benefit from Federal Tax Credits for Consumer Energy Efficiency which provide tax credits for those who upgrade to qualifying energy efficient appliances and perform efficiency upgrades to existing homes.



 In the coming decade it is a certainty that we will be seeing even larger changes in how we manage power in our world. The incandescent light bulb will be obsolete for all but the most minor lighting applications, LEDs will have the lion’s share of the lighting markets, and energy efficiency standards and alternative sources of energy will continue to evolve and grow as well. Right now we are in a transitional period that is seeing remarkable growth and change in the lighting industry, and offers to incentivize our switch to newer and more efficient forms of lighting will continue to reflect this, but only for a limited time. Once new standards are fully enacted and markets stabilize, incentive programs and rebate offers will begin to decline in number and availability, and this means fewer opportunities for larger savings and lower outlays in the future. Right now is probably one of the best times to take advantage of the savings upgrading to energy efficient forms of lighting has to offer, and even without incentives, the potential savings over the long terms still make such upgrades quite sensible and practical regardless.

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