Calculate the ROI for LED luminaires, know where to start:
Have you heard about calculating the ROI for LED luminaires (return on investment)? In this post, you will find the concept of energy efficiency and understand why LED luminaires are an excellent acquisition option to increase the profitability of your company and stand out against the competition.
We will also explain how to calculate the ROI for LED luminaires of a company. Discover also several interesting points about these products, which allow entrepreneurs to increase productivity while reducing expenses with the payment of the electricity bill.
New technologies surpass all other usual lamp models that have been on the market for many years, including famous fluorescent and high-pressure metal vapor or sodium lamps.
Want to know more about sustainability and how it can increase the competitiveness of your organization, while helping to preserve the environment? Follow the reading!
Understand what ROI is
The acronym ROI corresponds to the term return on investment, which originated in English and means the profit obtained in business operations, relating to how much money was gained or lost after the investment of a certain amount.
Entrepreneurs evaluate the expected return, the required return, and the effective return. The latter is used to evaluate the performance of investments. The values obtained are net earnings, while the ROI is defined as a percentage.
It is worth noting that it is an analysis tool that can be applied to all types of investments and is not a recent utility, as it has been known in organizational environments since 1920. The ROI is important for the following reasons:
- Enables the mapping of profit sources;
- Allows for profit optimization;
- Identifies the best investments;
- Favors the creation of action plans;
- Provides goal-setting.
Calculating ROI in advance has a positive impact on businesses, as it facilitates more accurate decision-making. Additionally, it streamlines investment processes by attracting potential investors interested in applying their resources to achieve future returns. On the other hand, it allows for monitoring the impact of businesses in relation to their goals and objectives.
Learn how to calculate ROI for LED lighting
There are several methodologies for calculating ROI, depending on the purpose or focus that the professional wants to give to the results. The simplest and most commonly used formulas are available in books on Accounting, Economics or Finance. As an illustrative example, we will provide the simplest formula:
ROI = (profit obtained X period) – (initial investment) / (initial investment)
Perhaps you can better understand the calculation through a practical case. Let’s assume that a company has invested R$5,000 to have LED lighting in all its sectors and has managed to reduce its electricity bill from R$500 to R$250. After 48 months of the investment, the ROI would be 1.4, or 140%.
ROI = (250 X 48) – (5,000) / 5,000
ROI = 1.4
The idea of the formula is to subtract the value obtained from the initial investment and then divide by the result of the application. The higher the ROI, the greater the financial return it will generate for those involved. Metrics are useful in defining whether or not an investment should be made, and after it is made, whether it was really worthwhile.
The period that your organization will use as the basis for calculating ROI can be either the lifespan of the LED light, which exceeds 100,000 hours, or the warranty period of the product. When using the lifespan method, it is important to divide 100,000 hours by the number of hours the light is used monthly to find the period in months.
In addition to finding the ROI, it is important to calculate how long it will take to get a 100% return on the investment in the lighting project. In this case, the following formula can be used:
months to 100% ROI = (initial investment) / (monthly savings obtained with LED technology)
This will allow you to identify in how many months your organization will have a 100% return on the invested amount.
Understand the concept of energy efficiency
Energy efficiency refers to activities that aim to improve the rational use of energy sources in order to achieve even more satisfactory results. It refers to the amount of electrical energy used by equipment to perform tasks compared to the amount made available for that purpose.
It is one of the pillars of sustainable energy policies, which have been applied to organizations in Brazil since the 1980s. In summary, the government deals with various issues in various sectors of production, transportation, education, sanitation, and other areas, offering incentives to entities that can produce more while using less electrical energy.
Discover why LED luminaires are the most economical
LED luminaires have a higher investment value than the acquisition cost of conventional technologies, but they have much greater durability than fluorescent, incandescent, and vapor lamps. Those who use new technologies know that they have a long lifespan, over 100,000 hours, and if they are turned on for 8 hours a day, they last around 15 years.
However, the most incredible benefit is that they save electrical energy, providing financial return for those who invest in them. It is possible to replace a 400W sodium vapor lamp with LED luminaires with 100W and 14,000 lumens. See below for other relevant factors!
Learn what LED luminaires are and how they work
LED luminaires are innovations or devices that contain semiconductor light emitters through the passage of electrical current – electroluminescence. They are different from traditional luminaires in that they require a diode with energy to emit brightness, while others require electrical discharges in gases and pollute nature.
They are perfect for small, medium, and large companies due to the numerous advantages they provide to their users.
Check out the main applications of LED luminaires
If you intend to use this sustainable alternative, keep in mind that they are useful for all imaginable applications. They can be normally installed in indoor and outdoor areas, presenting high efficiency in larger places such as parking lots, supermarkets, malls, commercial and industrial establishments, among others.
They are recommended for lighting projects that promote a significant reduction in expenses with the payment of electrical energy.
Find out how to evaluate the cost-benefit of LED luminaires
The economy after the installation of LED luminaires is over 50% of the value that was spent on electricity bills. Therefore, they reduce energy demand, avoiding an increase in tariff prices.
Furthermore, inspection and revision costs are much lower than those invested in traditional lamps, offering perfect visibility and eliminating visual pollution. Finally, they do not contain mercury or toxic substances to protect ecosystems.
See how to start investing in LED and calculate ROI for luminaires
To start your investments in LED luminaires, in addition to calculating the ROI for luminaires, it is necessary to analyze the suppliers that are operating in this market. Look for a company that offers an ideal line of products for all types of enterprises, that is renowned and that operates in industrial automation, with eco-efficient solutions in LED lighting.
A well-structured lighting project with the installation of LED luminaires is the best way for those who want to spend less on energy and produce more, applying the concept of energy efficiency to their company. Start calculating the ROI of new technologies right now and take advantage of all our tips. They are fundamental to the growth of your business.
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