Strategically Green - LEDs: Hitting the Mainstream?

Spring 2013
This 489,000-square-foot distribution center in Riverside, CA features 49 total fixtures, eight of which are LED.

The term LED is an abbreviation for light-emitting diode, a semiconductor that emits light. A single LED is very small — several would easily fit on your fingernail. A typical light fixture contains several rows of LEDs. Light fixtures that contain LEDs are available for most common commercial building lighting applications today, although LED product lines are less extensive than traditional lighting products.

LED fixtures promise a new generation of energy efficient and environmentally-responsible lighting solutions for commercial buildings. Between 2010 and 2030, cumulative energy savings from LEDs is projected to be $250 billion, according to an April 2012 U.S. Department of Energy (DOE) report entitled Solid-State Lighting Research and Development: Multi-Year Program Plan prepared for the Lighting Research and Development Building Technologies Program. But are LEDs a viable solution for commercial property owners today? Improvements in technology and decreasing costs are making LEDs an attractive solution for property owners in certain applications, but they are not a universal solution for all lighting needs.

table listing the comparative Costs of LED and HID lighting layouts

Current and Projected Market Share

LEDs account for one percent of the approximately eight billion lamps already installed in the United States, but they are making significant inroads in certain applications. According to the DOE report, LEDs represented 10 percent of the total number of outdoor light fixtures installed in 2010. Cooper Industries, a leading lighting products manufacturer, projects that the market for LEDs will grow to 30 percent of product volume in 2016, up from eight percent in 2011. The demand for LEDs in lighting applications grew by 44 percent in 2011 compared with 2010. A 2011 McKinsey report entitled Lighting the Way: Perspectives on the Global Lighting Market projects that the global LED general lighting market will see more than 11-fold growth, increasing from less than $7 billion in 2011 to $77 billion in 2020.

Advantages and Limitations

LED fixtures promise high-energy efficiency, longevity and durability. They can be switched on and off frequently and dimmed without reducing their lifespan. This allows LED fixtures to be paired with occupancy sensors, photocells and lighting control systems that adjust lighting levels throughout the day. This is not usually the case with traditional fluorescent and high-intensity discharge (HID) fixtures unless more expensive dimming ballasts are installed. HID fixtures are metal halide and high pressure sodium products common in outdoor and high-bay lighting applications. LED fixtures also do not contain toxic substances such as mercury, as is the case with fluorescent bulbs.

Factors limiting wider adoption of LED fixtures include their high cost, relative to mature technologies such as fluorescents and HID fixtures. LEDs are also not yet available in the same full range of products and styles that can be found with traditional light fixtures.

Product warranties for LED fixtures can be a differentiator. LED fixtures typically carry warranties ranging from 50,000 to 70,000 hours, a duration that far exceeds traditional lighting products. For a property operating 4,000 hours per year, this equates to between 12 and 17 years. However, in the early days of LEDs, the small scale and limited track record of emerging LED fixture manufacturers created uncertainty about whether they would be around to service such long warranty terms. This concern is diminishing as well-established global lighting manufacturers expand their lines of LED fixtures.

Where to Use LEDs

LED fixtures have seen greatest adoption where their advantages of longevity, energy savings and durability are most apparent. They are proving their benefits for roadway and parking lot lighting, signage and low temperature environments such as cold storage and data centers. LED fixtures are being used in retail environments for flood lights, refrigerated cases and displays. LEDs are also making inroads in office environments where a high degree of control and dimmability are desired. These features make it easier to take advantage of daylight harvesting from floor-to-ceiling glazed curtain walls commonly featured in modern sustainable buildings. Your building may even already have LED fixtures installed — illuminated exit signs have routinely used LEDs for the past decade.

LED light fixtures are available for new construction projects and upgrades to existing buildings in office, industrial, retail and hospitality property types. Prologis recently completed several LED site lighting upgrades at industrial properties in southern California and Florida that are expected to deliver 65 percent energy savings. One of the factors that helped sell these projects was that the LED fixtures would virtually eliminate monthly inspections and maintenance calls.

LED lighting

Prologis recently completed several LED site lighting upgrades at industrial properties in southern California and Florida that are expected to deliver an energy savings of 65 percent.
Photos courtesy of Woody Welch Photography


LED fixtures are more expensive to purchase than other established technologies such as fluorescents and HID fixtures. It is essential to compare the lifecycle costs of LEDs and alternative lighting solutions, not just the upfront price. Lifecycle costs include purchase price, operating costs such as energy and bulb replacement, and end-of-life disposal.

Installing LED fixtures during the construction of a new building is typically more cost-effective than retrofitting an existing property. The lighting system in a new building can be designed to make the best use of LEDs. For example, designing an outdoor parking lot with LEDs may reduce the number of poles required, thereby reducing material and installation costs compared to traditional HID lighting. In contrast, a one-for-one replacement performed when upgrading the lights at an existing building may dictate more LEDs than would otherwise be required, resulting in higher project costs.

LED technology is rapidly improving and costs continue to decline. To make informed decisions about installing LEDs, it is important to examine total lifecycle, not just initial, costs. Find out what utility rebates are available in the local area and ensure that the LEDs being used are eligible. LED products and prices are constantly improving, so a project that doesn’t pencil today might make sense in a year or two. With a little patience and careful planning, commercial property owners have a bright future with LEDs.