Welcome to the first in a series of lighting retrofit case studies we will be publishing in the coming months.  In this series, we highlight customers in various industries that have gone through a lighting retrofit in their facility to take advantage of more energy-efficient technology.  This lighting retrofit case study can be used as an example of what is attainable via a lighting retrofit by those interested in undergoing similar retrofit projects.  If you have a facility type that we have not covered, please feel free to leave a comment or contact us.  We have been involved in many lighting retrofit projects and may be able to call upon our previous clients for specific data needed for a case study.

Company Background

Innovative Packaging produces all types of corrugated packaging products and serves the Indiana, Michigan and Ohio markets. The company designs all products to customer specifications and can take projects from conception to a final corrugated piece delivered to the customers location. That final product may be a printed or labeled carton, point of purchase display with graphics, or any number of specialty die cuts.

The Opportunity

Innovative Packaging operates out of a 118,800 square foot facility that is used for both production and warehousing.  Prior to the lighting retrofit, the facility was predominantly lit with 400 W Metal Halide fixtures.  Light levels were very low throughout the area so the company had also installed 4' and 8' T12 Linear Fluorescent strips over work areas to improve the light levels where needed.

The Solution

Working with Electrical Marketplace, Innovative Packaging determined that replacing all of the existing light fixtures with 4-lamp T5 HO High Bay fixtures was the best alternative.  The 4-lamp T5 High Bay reduces the power consumption by over 200 W per fixture when compared with the 400 W Metal Halides.  These fixtures also would provide better quality and more evenly distributed light than the existing system.  Additionally, The T5 fixtures that would be used in the warehousing area could be configured with occupancy sensors so they will turn off and on instantly depending on use.

Before and After Images

Economics

Below you will find the economic details, return on investment and payback calculations for this lighting retrofit case study.

Retrofit Details

As you can see, Innovative packaging was able to reduce the power consumption of its lighting system and therefore the cost to light its facility by 45%.  This analysis does not take into account the additional savings it will see as a result of the installation of occupancy sensors in the warehouse area.  The warehouse area alone accounts for 85 of the 180 new 4-lamp T5 fixtures that were installed. Assuming the occupancy sensors can reduce the amount of burn hours in this area by 25%, which is within reason for warehouse space, Innovative packaging will see an additional $1,400 of savings in their lighting costs.

Return On Investment Analysis

In addition to the savings made available by decreasing energy demand, Innovative Packaging was also able to qualify for rebates from Duke Energy's Smart $aver Incentive Program. Under this program, Duke Energy provides a cash rebate to companies that incorporate energy-efficient components in their lighting systems.  This rebate amounts to $13 per T5HO 4-lamp device that replaces a T12 fixture and $50 per T5HO device that replaces an HID fixture.  The total rebate is shown in the ROI table below.

Tax Incentive

Working with Engineered Tax Services, Innovative Packaging was also able to qualify for the 179 D Deduction made available through the Energy Policy Act of 2005.  This Federal program allows companies to take up to a $1.80 per square foot tax deduction for reducing the energy consumption of their facility by at least 50% when compared with ASHRAE 2001 standards.  The maximum deduction for energy efficient lighting systems under this program is $0.60 per square foot.  The remaining $1.20 is alloted for HVAC systems and Building Envelope improvements.

Engineered Tax Services certified the Innovative Packaging facilities under the lighting portion of the EP Act program.  The retrofit qualified for the full $0.60 per square foot deduction which gave Innovative Packaging a $71,280 tax benefit for 2008.

Summary

As you can see, a lighting retrofit project can pay large dividends when done right.  Innovative packaging now has much better quality light and can enjoy substantial costs savings in operations from now on.  

“Our interest in doing the project was initiated by a desire for cost savings,” explained Gene Fleck, President of Innovative Packaging. “We then discovered the rebates given by Duke Energy and the tax credit available from the Federal Government for the energy conservation initiative.”