Lighting Transformed


When it comes to retail operating costs, energy is one of the top three expenses. Lighting is, of course, a component of this, accounting for 50% of energy costs for non-food retailers. The typical retail store spends roughly 71 cents per square foot per year — a cost that quickly adds up at the store and chain level.

However, the lighting world has undergone a seismic shift in the past six years. LED technologies are now economically viable, and quickly replacing metal halide, fluorescent and halogen technologies in many businesses. LEDs are five to 10 times more efficient than halogen lighting, and LED fixtures can be 1.2 to 1.4 times more efficient than HID and fluorescent fixtures. This translates to big energy savings.

Target, for example, has achieved a more than 25% energy reduction in lighting by replacing fluorescent fixtures with new LED fixtures and LED retrofit kits. (Target replaced 120,000 59 watt troffers across 100 stores, resulting in 15 million kWh saved annually, or $1.5 million in electricity savings.) As more and more companies choose LEDs, the technology continues to improve and equipment prices continue to plummet.

LED options exist for virtually every lighting application, and many manufacturers are starting to discontinue non-LED equipment. As the market commits even further to LEDs, new opportunities are emerging to harness the inherent benefits to this technology, and leading retailers are sharing their strategies and solutions through the Department of Energy’s Better Buildings Initiative and its Interior Lighting Campaign.

Beyond energy savings

The benefits of LED technology go beyond energy cost reduction. LEDs, which are relatively easy to install or retrofit, can enable dynamic new color-tuning options, reduced cooling costs, and in-store smart communication with customers.

The light from early LEDs was cold and stark, but color options have advanced significantly. LEDs now provide richer color options than fluorescent sources and can draw out blues and purples more than halogen lights, allowing retailers to highlight those colors in merchandise. Beyond richer color options, LEDs allow for dynamic color shifts, known as color tuning. For example, a store could have warm white light in the morning, and cool white light in the evening, using the same fixture to modulate the color.

Retailers can leverage their LED lighting systems to tap into the Internet of Things. Visible Light Communication, also known as Li-Fi, works like Wi-Fi for computers, but instead of using radio signals, light signals that are imperceptible to humans are broadcast by the LEDs and picked up by customers’ phones, providing connections at just the right time and place. For example, Li-Fi can be used to share a coupon directly to a customer’s phone when they walk by a display.

This new lighting benefit is not yet regularly monetized by retailers, but if incorporated, it has the potential to increase revenue enough to help offset the cost of installation.

Because all electrical devices, including lighting, produce heat when they operate, more efficient lighting results in a reduced cooling load. As a rule of thumb, every three watts of lighting reduction offers a one-watt reduction in cooling loads, further increasing energy savings on top of the reduced lighting costs. In the best case scenario, retailers can downsize or even eliminate some heating and cooling equipment because of the additional load reduction.


In new construction, dedicated LED fixtures are an easy and cost-effective option. For retrofits, however, the labor costs of installing new fixtures can be cost prohibitive, so LED replacement lamps and kits are more often a better solution.

There are many available retrofit options that allow for improved optical design and the potential use of controls or communications. In some cases, LED lamps can be installed as direct replacements for incandescent lamps with virtually no additional labor costs above a typical lamp replacement.

For fluorescent lamps, tubular LEDs may be an alternative. Although TLEDs may have lower upfront costs, they may also have greater lifetime costs because certain TLEDs operate on fluorescent ballasts and in time, those ballasts will fail and require a replacement.

Retrofit kits have the advantage of allowing retailers to achieve energy savings while still managing the depreciation of the larger capital investment in the original fixture.

Michael Myer is a lighting expert at Pacific Northwest National Laboratory, a U.S. Department of Energy national laboratory working with companies as part of the Better Buildings Alliance.


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