In this post we’ll explore one of the ways you can reduce your outgoing cashflow by getting a little smarter with how you use electricity. Electricity gets more expensive every year.

In talking with franchisees at a recent conference, we started chatting about electricity expense.

A couple of franchisees have had success replacing expensive gas-filled lighting in-store with LED.

LED is a form of lighting that is solid state, meaning there is no gas in the light, and no chemicals. They are completely recyclable and more efficient. Fluorescent lights run at much lower efficiency than LED lights which typically run at 95% efficiency – that’s 95% of the energy is given off as light, and 5% as heat.

A multi-unit franchisee I’ve been working with from Autobarn has replaced his high pressure sodium halogen lights with LED, and reduced his electricity bill by half. That’s a saving of several thousand dollars a year, from an investment of $10,000.

Our franchisee has had experience with 170w and 140w LED lighting. A 170w LED light can replace a 500w halogen light in a big-box retail store, and dramatically increase energy efficiency. 140w lamps may be a better choice in applications where the light needs to be spread more evenly – more lamps will be required but the lighting is less harsh.

Another advantage LEDs is that they last 20 years or more, and they come with a 3-year warranty which means less replacement, and ultimately less expense.

After a power surge, gas lights can take 15 to 20 minutes to come back to full brightness again – LEDs can be switched on and off at will – no more waiting in semi-darkness after a power surge or outage!

In a store that has 20 lights, replacing halogen lamps with LED will cost about $10,000.
Recoup some of that by selling the old halogen lamps for $50-100ea on Gumtree/Craigslist.

LEDs are 2x more efficient than halogen lamps, reach full brightness instantly and last 20 years. A $10k investment in LED lights can save you $4000/year.