I IMPO® The State of Industrial Facility Lighting: Upgrading to LED A look at what industrial facilities currently use for their lighting system, and how LED upgrades have become commonplace. Page: 2 The State of Industrial Facility Lighting: Upgrading to LED A look at what industrial facilities currently use for their lighting system, and how LED upgrades have become commonplace. As part of their efforts to become greener and leaner, manufacturing plants, warehouses, distribu- tion centers, fabrication shops and other industrial operations have made their facility lighting part of the equation. Industrial consumers are doing so through upgrading or replacing their existing metal halide, fluorescent, and high pressure sodium light bulbs and fixtures with light emitting diode (LED) bulbs. Commercial grade LED have proven to last significantly longer than legacy HID lighting systems, offer superior light quality with consistent lumen maintenance at a fraction of the operating cost of legacy systems, often with an ROI of less than one year in commercial applications. According to the Department of Energy: • Today’s LED bulbs can be six-to-seven times more energy efficient than conventional incandescent lights and cut energy use by more than 80%. • Quality LED bulbs have a life of 50,000 hours or more – lasting 5x longer than traditional light bulbs. Those hours equal a life of more than 5.7 years if run 24 hours a day, seven days a week. • Unlike HID lamps – which release 90% of their energy as heat – LEDs use energy far more efficiently with little wasted heat. In March 2016, Industrial Maintenance and Plant Operation (IMPO) surveyed its audience about the state of facility lighting. Questions aimed to discover readers’ level of satisfaction with their facility lighting, what kind of lighting their facility uses, if they plan to upgrade in the near future, and if so, if they plan to retrofit existing fixtures or replace them. Overall, the results showed that a large portion of C-level industrial facilities managers plan to, or at least want to, upgrade their current lighting solution. A look at the before and after result of OEO Energy Solutions’ “plug ‘n play” LED lighting system installation at a Costco store. Page: 3 Demographics Survey respondents were comprised of manufacturing plant operators, facility managers, engineering personnel, and plant maintenance supervisors. Satisfaction Asked how satisfied they are with the current state of the lighting system in their industrial facility: • 50.4% said they are satisfied • 20.6% said they are very satisfied • 29% said they are not satisfied While the majority – 71% – are happy with their facility lighting, that still means that nearly 3 out of every 10 respondents are not. That represents a big chunk of industrial facilities due for an upgrade. How Old? Nearly 38 percent of respondents said their lighting system was installed at least 10 years ago, 18.2% said theirs was installed within the past 6-10 years, 25 % said within the past 3-6 years, and 18.9% said within the past 1-3 years. Upgrade Upcoming? Asked if they are planning to make improvements to their lighting solution within the next 1-2 years, 38.5 % of respondents said yes, 43.1% said no, while 18.5% said they are currently in the process of an upgrade. That means a majority – 57% – will have upgraded their system within the next 2 years. Retrofit, or Replace? Once the decision has been made to upgrade a facility’s lighting, the next step is to choose between retrofitting existing lighting fixtures, and replacing them altogether. For large facilities, the cost of new fixtures and their installation can become expensive fast. Asked hypothetically if they were looking to upgrade – would they prefer retrofitting or replacing, 57% of respondents chose retrofitting. Install Time Downtime means money lost in the industrial and manufacturing world. So whether via retrofit, or replacement, the time needed to install a lighting solution upgrade can be a big factor when choosing a lighting vendor. Obviously, the quicker the better. Asked how long they would expect a system installation to take at their facility, or how long their current system took to install: • 49.6% said it took more than one week • 13.7% said 5-7 days • 20.6% said 3-5 days • 16% said 1-2 days How satisfied are you with the current state of the lighting system in your manufacturing or distribution facility? Very Satisfied Satisfied Not Satisfied 20.6% 50.4% 29% If you were looking to upgrade or have already upgraded your lighting system, would you prefer to retrofit your exiting fixtures to LED or entirely replace them? (given the same performance for both) Replace fixtures Retrofit fixtures 43% 57% Page: 4 Cost The upside the upgrading a facility lighting system to LED is that the energy savings will pay off in the long run. But of course, the downside is the upfront cost of installation, and the cost of the bulbs and/or new fixtures themselves. Asked what they would expect it to cost, including labor, per light changed to retrofit a facility high bay fixture to LED: • 38.7% said $100-150 • 22.7% said $150-200 • 16% said $200-300 • 10.1% said $300-400 • 12.6% said $400+ Asked the same for an LED full fixture replacement: • 32.8% said $150-250 • 34.5% said $250-350 • 14.3% said $350-450 • 18.5% said $450-550 Asked what they think about their current facility lighting utility cost: • 59.8% said it’s about what they’d expect • 26.8% said it’s higher than expected • 13.4% said it’s lower than expected Energy Rebate Everyone knows that upgrading to LED lighting will save on energy costs. But a lesser-known bonus of upgrading is the opportunity to receive a rebate check from the utility company. Most electric utility companies offer rebates to help pay for the cost of energy-reduction projects. Rebates can be substantial and can cover as much as 75% of the cost of project, but going through the rebate qualification and application requirements can be a chore. Thankfully, some lighting vendors offer rebate processing, offering financial consultants that will find, pre-qualify, and process rebate applications. More than 72% of IMPO survey respondents said they would prefer to have their lighting vendor offer rebate processing for them. Overall, the IMPO survey showed that there is a considerable portion of industrial managers that would like to see their facility lighting system upgraded, and that the vast majority of facilities are still running behind when it comes to lighting energy efficiency. Driven primarily by popularity of “plug ‘n play”, direct-replacement LED’s for use in existing 400W and 1000W metal halide and HPS fixtures, which do not require ballast bypass, fixture change or electrician, the LED market is expected to grow significantly over the next few years. The 2016 Navigant Research Report Industrial and High-Bay Lighting: Global Market Analysis and Forecasts recognized the direct-replacement segment as the catalyst in the adoption rate of commercial LED technology due to the simplicity of installation and low upgrade investment. Over the next few years…they would prefer it. Page: 5 About This Report The information in this report was researched and produced by IMPO in conjunction with OEO Energy Solutions. Statistical data was researched and compiled by Advantage Business Media in March 2016. About OEO Energy Solutions OEO Energy Solutions (www.OEO.com) offers patented, direct-replacement “plug ‘n play” LED “bulbs” designed to replace existing 400W and 1,000W metal halide, high pressure sodium and T5 or T8 systems. OEO’s “plug ‘n play” LED technology allows for use of existing warehouse or industrial-type lighting fixtures without any need to rewire or replace those fixtures. OEO is recognized as a “Key Industry Player” in the 2016 Q1 Navigant Research Report Industrial and High-Bay Lighting: Global Market Analysis and Forecasts.