American Energy Independence has been on the forefront of the political stage since a gallon of gasoline rose to over $4 during the summer of 2008. A year later, the pressure is off the pump but the interest in energy efficiency is still high. A year after the spike in gas prices, in July 2009, President Obama said, “When you hear the innovation that's taking place — everything from LED LIGHTING that can save a huge amount on energy costs to new concrete materials ... that gets you excited about the future. I know light bulbs may not seem sexy, but this simple action holds enormous promise because 7 percent of all the energy consumed in America is used to light our homes and our businesses.”
Over President Obama’s fall media blitz, he visited the Late Show with David Letterman on Sept. 21st, 2009. In the interview President Obama said, “The single most important task for my administration is putting people back to work. Every Building all across the United States probably could use some retrofitting to make it much more energy efficiency. Doing that I think could probably put hundreds of thousands of people back to work.”
The research data backs up the LED lighting initiative. The McKinsey Report outlining the U.S. Mid-Range Abatement Curve, Commercial Buildings, stated that LED lighting is the absolute number one way to save money and reduce CO2 emissions.
To further put this LED lighting opportunity in context, the U.S. Department of Energy reports that in 1980 the U.S. energy consumption was just over $250 billion per year. In 2009, it is over $400 billion in annual expense. As seven percent goes toward lighting, that totals $28 billion annually. LED lighting has the ability to reduce lighting electricity costs by 80 percent, which would deliver a savings of over $22.4 billion annually. Given that this is a year over year advantage and that the bulbs last between 40,000 and 100,000 hours, the savings from the LED lighting retrofits could extend for 20 to 40 years!
The challenge, like in many new technology opportunities, is the cost of the retrofits. The payback comes for LEDs within the first two to three years, but the cost of LED bulbs is much higher than the traditional incandescent, compact fluorescent, or typical tube fluorescent found in most office buildings, hospitals, schools, stores, and public buildings.
The private sector has risen to the challenge and one company has structured the financing through multi-million dollar programs that provide business owners with free lighting audits and zero down programs that are cash flow positive in the very first month.