Real Savings

— By Ted Stouch —

The financial benefits of converting parking lot lighting to LED.


Anyone who has been in any part of the facility business, for even a short amount of time, has read, talked about or spoken to someone on the benefits of converting their facilities’ lighting to LED. For those of us on the service and project side of LED retrofits, we talk about the same concepts over and over. Retrofitting to LEDs will save on energy consumption, save on maintenance, and your lighting performance will go through the roof. We shout to the rooftops about how much money you will save, and then leave it at that.

Ted Stouch, Action Services Group

You have heard the speech over and over, about how much you will save. Now you want to see the numbers, so where is that pesky sales rep now that you want to review the actual financial benefits? You have so many questions. Where is the best place to start? Should you look at your interior or exterior lighting first? Are there different product options? From whom should you purchase your lighting applications and products? The list goes on and on, but the big question still remains.

How much can I save with an LED retrofit?

To simplify this process, we are going to focus on where you can potentially save the most money: your parking lot lighting.

Example: A large discount retailer needed a full turnkey parking lot solution to reduce both energy and maintenance costs while improving light levels for 532 locations.

Working with the customer, we assisted them in established their LED retrofit savings goals. This allowed for product selection based on results and maximum savings, instead of just focusing on product cost. A site photometric analysis was provided to ensure the retrofit met the customer’s lighting performance needs to provide a safe parking area. An ROI analysis was also provided to ensure that the LED products cost-effectively accomplished the customer’s goals.

250w HID wall pack fixtures were replaced with 52w LED; 400w HID parking lot fixtures were replaced with 250w LED; and 400w flood light fixtures were replaced with 125w LED fixtures. The LED retrofit reduced the customer’s lighting energy by 74% with an estimated 3-year energy savings of $1,278,214 and eliminated an annual maintenance cost of $394,793.

Below and on the next page of this article you will find the energy and maintenance savings this organization saw after completing their LED parking lot retrofit. As a secondary analysis, the customer was also provided their annual emissions reduction and a first year’s lost savings due to delaying their LED parking lot retrofit.

Estimate Your Savings

Now that you have seen a few examples of actual financial savings associated with retrofitting parking lot lighting to LED, you probably want to get a better idea of what your savings would be. Because let’s face it: it’s great for the people in those examples, but you want to see your savings.

The below information was provided by

The Office of Energy Efficiency & Renewable Energy, working in conjunction with the DOE Municipal Solid-State Street Lighting Consortium, the Clinton Climate Initiative (CCI)/C40, the Federal Energy Management Program (FEMP) and DOE Better Buildings, created a Street and Parking Facility Retrofit Financial Analysis Tool. This tool provides an avenue for analysis of the costs and benefits associated with street and parking facility lighting efficiency projects. The tool utilizes life-cycle cost (LCC) analysis, tracks cost and benefit throughout a specific period while discounting future cash flows to present value, using a user-specified discount rate. The use of such discounting captures the time value of money.

  • Capital costs, net of rebates (including discounted capital costs, if a project’s implementation is to occur over multiple years).


  • Present benefits of annual electricity costs, for both base and retrofit cases.


  • Current values of annual maintenance costs, for both base and retrofit cases.


The tool also provides (among other outputs) a common non-discounted financial metric, simple payback (the number of years required for savings to offset initial outlays), as well as the internal rate of return (IRR), which is the discount rate at which the NPV is zero.

Other outputs reported include:

  • Annual energy and energy-cost savings.
  • Annual greenhouse gas reductions.
  • Up to 15 years of detailed annual cash flow data.
  • Average annualized energy and maintenance savings per fixture.

To download your free copy of this LED Retrofit financial analysis tool, go to

Once you wrap your mind around the actual cost savings your organization will benefit from when you retrofit your parking lot lighting to LED, you are going to want to move on to next steps. The financial analysis tool page also contains a few other resources for you to review.

Consider partnering with a project management provider that can supply a national LED lighting and electrical program. Review these items when vetting a national LED lighting and electrical project provider.

  • Available Resources
  • Available Personnel
  • Reporting Capabilities
  • Data Capturing for lighting components
  • Lighting Recommendations
  • Product Neutral



— Ted Stouch is president and founder of Action Services Group, a national service provider offering a single point of contact for all your lighting, LED retrofit, electrical and signage needs. For more information, visit or email


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