Creative Finance 1: Green Up Your Act with LED Lighting

We won’t insult your intelligence by talking about the impending doom of global warming, pollution, climate change, the destruction of the natural world, or the number of species we are driving into extinction. You’re not here for an environmental lecture, and we’re certainly not qualified to deliver one, so we won’t go there. We’re not even going to mention the fact that we are running out of the fossil fuels that our society has relied on for centuries. Honestly. Not a word.

You’re a busy person and, as much as you want to help the planet, the reason you’re reading this article is to get tips on how to reduce your business’ outgoings. Luckily, this article explains how you can do both.

In partnership with CEMA Lighting, this Creative Finance chapter explores how replacing inefficient lighting on your premises with LEDs could reduce your energy usage at least than 50%, simultaneously saving your business money and reducing your carbon footprint.

Why switch to LED lighting?

LED stands for light emitting diode which is a semiconductor device that generates light when electricity passes through it (thanks to a process called electroluminescence).

That’s as scientific as we’re going to get, but thanks to one of our partners, CEMA Lighting, we can tell you about the practical, financial and environmental benefits of switching to LED lighting.

LED lighting is cheaper to power

LED lighting is significantly more energy-efficient than many traditional lighting systems as it produces more ‘useful lumens’, i.e., less of the energy consumed by the light is wasted through heat dissipation. This makes LED lighting at least 50% cheaper to power, depending on the type of lighting being replaced.

LED lighting is better for the environment

Because LED lighting uses electricity more efficiently, your business’ energy consumption and therefore your impact on the planet should reduce by at least 50%. 

LED lighting lasts longer

After 25,000 hours traditional lighting will be operating at less than 80% of its potential output. An LED lightbulb lasts, on average, for 50,000 hours and, if used efficiently, for as long as 100,000 hours.

LED lighting is low maintenance

In addition, LED lights do not include mercury like fluorescent and mercury vapor lights, so they do not require the same maintenance or management at the end of their life.

LED lighting provides a better quality of light

You can see from CEMA Lighting’s before and after photos just how much improvement can be seen when businesses switch to LED lighting. This delivers improved visibility and colour clarity, safer working conditions for staff and improved security and CCTV footage.

Introducing CEMA Lighting

With the UK government setting a target for carbon neutrality by 2050, CEMA Lighting offer sustainable, cost effective LED lighting solutions for environmentally responsible businesses. Between 2020 and 2021, CEMA saved British companies over 2,000 tonnes of CO2. That is the equivalent to heating the average home in Britain for 1,250 years and the same weight as 350 African elephants.

CEMA Lighting’s Case study of RDC

RDC is an IT disposal and recycling company in Braintree. They were using traditional luminaires that consumed lots of energy.

CEMA Lighting replaced the outdated fittings in RDC’s production area with their exclusive Super Lumen High Bay which delivers an impressive 190 Lumens per Watt efficiency. The LED lighting has an anticipated lifespan of 100,000 hours, consumes 58% less energy and offers a brighter and whiter light, ensuring that the production area was lit to over 300 lux (in line with recommended guidelines).

In the offices, RDC were using panel lights that only converted 70-90 Lumens per Watt. These were replaced with CEMA Lighting’s contemporary Halo panel which uses 75% less energy, has triple the lifespan of the system and provided a modern, sleek and professional design throughout the area.

What was the impact?

  • Annual running costs have been slashed by 59%
  • Annual CO² emissions cut by 299.75 tonnes
  • Light levels on the premises have been improved by 30%

“The benefits from the lighting upgrade have been incredible through improved look and feel to the lighting, reduction in energy usage and a dramatic impact to CO² reduction.”

Cole May, RDC

To read about the many UK businesses that have already benefitted from switching to LED lighting, visit www.cemalighting.co.uk/case-studies.  

How much does LED Lighting cost?

At this point, you’re probably thinking, That all sounds lovely, but how much is LED lighting installation going to cost?, or something to that effect.

The answer to this depends on so many factors such as the square footage of the area you want to light, the lighting being removed, the type of lighting being installed, and the complexity of the job in general, so it’s difficult to estimate a price.

Luckily, CEMA Lighting offer free no-obligation lighting audits to UK businesses. They do this by examining your current lighting system and discussing what requirements you have, as well as considering temperatures or sensitive environments which require food safe or anti-explosive specifications. CEMA Lighting will also conduct a full financial analysis to validate investment with cost efficient changes, which is then displayed in a bespoke cost of ownership outlining savings and return on investment.

Here are just a few of businesses CEMA Lighting have worked with to reduce their annual energy bills. NOTE: These percentages outline the savings focused on commercial lighting installations only.

CompanyReturn on InvestmentAnnual Energy SavingsAnnual CO² Savings
Isuzu1.80 Years79%4.63 Tonnes
JKL Mouldings1.30 Years  66%22.79 Tonnes
Actavo1.86 Years62%7.60 Tonnes
Crittal Windows0.90 Years77%105.88 Tonnes
Donaldson0.82 Years*61%147.32 Tonnes

*In this case CEMA Lighting conducted a grants and funding investigation which covered 19% overall project cost.

Funding Your LED Lighting

Switching to LED lighting in your business could reduce your carbon footprint and save you a significant amount of money on your energy costs, but how will you pay for it?

While some businesses might choose to pay for LED installation by taking cash out of the business, that is not always the most cost-effective route. In fact, an increasing number of businesses are choosing to spread the cost of their LED lighting and other renewable technology over time with a bespoke asset finance solution. Doing so could enable you to:

  • Spread the cost of installation over time
  • Keep cash in your business for other growth projects
  • Manage your budget easily thanks to the fixed repayments
  • Save money on taxes, as leasing costs are 100% deductible.

In fact, in many cases, the money saved by reducing running costs more than covers the monthly finance payment, making the whole project cost positive while simultaneously ‘greening up your act’. The table below illustrates some potential costs vs savings.

Total cost of projectMonthly repayment
(3 year agreement)
Monthly energy savingAnnual energy savingTotal saving per annum
£100,000£3,275£3,470£41,640£2,340
£50,000£1637£1,733£20,796£1,146
£10,000£327.50£347£4,164£234
NOTE: These figures are intended as an illustration, actual costs and savings will vary depending on the project scope and terms of the finance agreement.

Next time…

In chapter 2 of The Creative Finance Mission series we’ll be covering the topic of increasing your business’ income by claiming Research and Development tax reliefs.

Click here to subscribe to the series and we’ll let you know when it’s been published.

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