Posted on 8/22/2014 6:49 AM by Eric Sullivan Jr.

As the public and private indoor sports, fitness, and recreation industry continues to grow in popularity, there are several ways management teams across the country are working to increase revenue. However, with cost recovery often being the goal in the public sector and ROI being the goal in the private sector – increasing revenue is only half of the equation. Many facility operators are looking for ways to lower utility expenses through the use of new building management technology, construction methods, and new product innovations. One of the most popular and successful strategies is to build or retrofit your existing facility with an LED lighting package.

By and large, utility expenses account for the second highest expense in large-scale sport and recreation facilities. When budgeting overhead expenses on an annual basis, utilities often equate to approximately $1.25 per square foot depending on the efficiency of the building and local utility rates. For example, in a 90,000 square foot sports and recreation center, utility costs would be projected at $112,500 per year.

Why LED?

To lessen this large expense, consider the use of LED lighting. LED lighting has gained popularity in the indoor sports and recreation community for a number of reasons. Some of the benefits that are attracting facility operators include: 50-80% lower electrical draw when compared to alternatives, less maintenance, longer lifespan, instant use with no "warm-up" period, dimming controls, and color-changing functionalities. Additionally, LED bulbs have less heat emission when compared to metal halide, fluorescent, or other high bay lighting choices, which helps lower HVAC expenses to cool facility temperatures. 

Another benefit of LED technology is the customization, with the ability to change the intensity of LED lights, there are several ways to accomodate variable lighting options, which can be pre-programmed specifically for the facility. For example, an operator might choose to have an ultra-bright setting for live TV recording and another more energy efficient setting for day-to-day use. 

With all of these benefits, one naturally is led to ask "what are the drawbacks?" The most obvious drawback is the initial investment required to purchase LED lights. With fixtures running as much as $1,500-$2,000 each, many facility managers are opting for "LED conversions" – products available to facilities that use the existing fixture and simply replace the internal bulb and ballast. This is often a more affordable retrofit than purchasing new LED fixtures. 

Incentives

Many new construction and retrofit projects have taken advantage of incentives offered by federal and local governments. The Energy Policy Act of 2005 created the Energy Efficient Commercial Buildings Deduction, which allows building owners to deduct the entire cost of a lighting or building upgrade in the year the equipment is placed in service, subject to a cap. This program ended on December 31, 2013, however there is a "tax extender bill" in Congress that is expected to pass and extend the program another 2 years. 

In addition to this federal program, many states also have tax incentives and capital programs to encourage the use of LED lighting in all commercial applications. Due to these benefits, industry construction reports expect that within 6 years as much as 70% of all commercial lighting will be LED. 

To achieve lighting goals, facility managers should work with a professional team of engineers to create an effective, efficient LED lighting plan. Paul Mallory, CEO of Mallory Energy, says they typically see 40-80% reductions in the lighting portion of companies' electric bills after an LED switch. With an average 2 to 3 year ROI, companies pay for their investment with energy cost savings. 

WIth all of the benefits and cost saving opportunities, LED lighting technology is a worthwhile consideration for new and existing facilities, and with multiple energy efficiency incentives at the local, state, and federal levels along with utility company rebates, it's a good time to consider upgrading buildings with high efficiency lighting systems. 

Eric Sullivan Jr. is executive vice president at The Sports Facilities Advisory and can be reached at eric@sportadvisory.com.