LED retro-fits will always save on Energy Costs when replacing fluorescents and incandescents, but why stop there. If you are going for a LED upgrade, be sure you get full value. There is no good reason to leave any money on the table.

Here are some value add-ons for your LED retro-fit project:

Tax Benefits – EP Act 179D Tax Deduction. Currently this tax benefit is in place through December 31, 2016. The benefit allows a building owner to take up to $1.80 per square foot as a tax deduction, provided the building meets certain energy efficiency targets. Charles Goulding of Energy Tax Savers, Inc. advises that “LEDs are so efficient that a LED retro-fit will usually trigger some level of incentive. With warehouses and manufacturing buildings, a LED retro-fit will almost ALWAYS trigger the Maximum Tax Benefit of $1.80 per square foot. If the tax benefit exceeds the cost of your LED retro-fit, then you should add other upgrades to your “179D Deduction Fund.” Qualifying upgrades can include HVAC, roof, windows and insulation projects. These add-ons to your “deduction fund” can either be completed projects within the past ten years or planned upgrades for near term implementation”.

Take a 100,000 sf warehouse as an example. The LED retrofit triggers the $1.80 per square foot tax benefit or in this example $180,000 in potential tax deductions.

However, the LED retro-fit that triggered the benefit cost only $50,000. So you now have a balance of $130,000 remaining in your “deduction fund”. You can go back ten years and use past projects or plan new project(s) in order to benefit from this remaining balance. Many building owners plan their building projects around a LED retro-fit “trigger” to take full advantage of these 179D tax benefits.

LED Product – With recent advancements, the “one for one” lamp replacement – an incandescent A19 lamp for a LED A19 lamp of lower wattage is old news. Brian Kennedy of TerraLUX advises “The smart move is to utilize the latest LED “engines”.  An example of this approach is retro-fitting an existing ceiling fixture with four traditional lamps. However, instead of replacing the four lamps with four LEDs, you replace it with one LED “engine” designed to perform in the existing housing. Result – more value added to your retro-fit with the additional energy saved and a longer operating life with the new LED engine.”

Incentives – Rebates for LED retro-fits can have a real impact on the economics of any LED Retro-Fit. In terms of “Leaving Money on the Table” don’t even think about a LED Retro-Fit without a full understanding of your rebate options. In general terms, if your retrofit will include the replacement of both incandescents and fluorescents, you can expect a payback in one year’s time from the combination of your rebate and the energy savings from your LED upgrade. If the retrofit includes only fluorescents, then the combination of energy savings from LED and the rebate will be in the two year range. Be advised, however, that this rebate gift package comes with a warning label. These rebates will not last indefinitely. The longer you wait, the less money there will be in the rebate pot. So the smart move is to start the process now. For Multifamily Projects in Con Ed territory, Martha Sickles of AEA recommends reaching out to a Con Ed / AEA Participating Contractor. For Commercial Projects (the Con Ed Commercial & Industrial Program), you need to work with a Con Ed Marketing Partner.

George Crawford, Principal of Green Partners LLC

gcrawford@greenpartnersny.com