Question: Will I see a significant decrease in energy costs if my business makes the switch to energy-efficient lighting?

Answer: According to the US Department of Energy, lighting costs take up 40% of the average commercial building’s electric bill. Outfitting your business’ office or commercial space with sustainable lighting may seem too complex, too expensive, or too much of a hassle to implement realistically. However, even minor changes to your business lighting can have tangible effects on your utility bill.

Researchers from McKinsey report that you can boost your business’s energy productivity 15 to 30 percent by switching to sustainable, energy-efficient lighting. The International Energy Agency has found that for every additional $1 you invest in energy efficient electrical equipment, you will save $2 in investments in electricity supply (World Energy Outlook 2006, International Energy Agency).

In essence, any improvement you make in your energy efficiency will pay for itself – and then some – over time. Switching to natural lighting and Energy Star-rated fixtures and bulbs can help you cut your energy costs, increase your energy efficiency, and improve the productivity of your lighting systems.

Windows and skylights

We get caught up in paying for the latest and greatest in business technology but forget that something as basic as sunlight is free. The more effectively you utilize natural daylight in your office or store, the less you have to pay for additional artificial lighting.

  • Installing skylights and windows immediately increases the availability of natural light within your building. You can save on your heating and cooling costs, in addition to your lighting costs, by installing models that are energy efficient and replacing old, drafty windows in the process.
  • Natural light has a positive effect on your employees’ and customers’ mood, health, and performance. Numerous studies have found that daylight increases worker productivity, and one study found that retail stores lit by natural light experienced 40% more sales (Heschong Mahone Group).

Read more about how working with your windows can help lower your energy costs!

Artificial lighting

Replacing your incandescent, halogen, and obsolete fluorescent lights with the newest energy-efficient models represents a significant financial investment depending on the size of your business space. The up-front costs of new bulbs and fixtures may seem exorbitant – but remember that the new bulbs are guaranteed to save you money.

  • According to Energy Star, “Qualified commercial light fixtures use at least 75% less energy and last 10–50 times longer than incandescent lighting,” while providing the same amount of light.
  • The McKinsey report also found that replacing halogen lamps with LEDs reduced energy demand by 50%.
  • You don’t have to replace all your fixtures at once in order to see significant cost benefits. Start by replacing the lights you use the most and work from there.
  • Pay attention to which bulbs you buy, as compact fluorescent lights (CFLs) come in a range of light colors.

Available tax credits for American businesses

The Energy Efficient Commercial Buildings Tax Deduction (CBTD) was created to encourage businesses to invest in energy-efficient lighting, heating, and building technologies. With the CBTD, you can claim a full or partial deduction for the cost of lighting improvements that save at least 50% of the building’s energy costs (according to ASHRAE Standard 90.1-2001). This deduction is taken in a single tax year instead of amortized over time.

  • Your deduction can range from $.60 to $1.80 per square foot, depending on the extent of your energy usage improvements.
  • This deduction will be available for systems installed between January 1, 2006 and December 31, 2013.

Examine your recent utility bills, your yearly budget for light fixture and light bulb replacement, and your tax returns. You can save money on all three – and increase your business’s productivity – by switching to sustainable lighting.

Megan Webb-Morgan is a web content writer for lead generation resource, Resource Nation. She writes about small business, focusing on topics such as business sales. Follow Resource Nation on Facebook and Google+, too!