Energy-Efficient, LED-Based Signage

Sept. 25, 2006
LED-based signage can pay for itself in 2 to 3 years

By Grant Harlow

One of the hottest topics in the lighting industry has been the “invasion” of LEDs, an innovation that, in certain industries, has begun to be a serious alternative to traditional lighting sources. Although impressive, these are still the early days for LEDs.

One place where LEDs have the potential to become a dominant technology in the near future is signage, which may herald the end of neon’s pre-eminence in signage lighting. This is due mainly to the exceptional cost savings in energy usage and maintenance that LEDs deliver, along with color equal to or better than neon. LEDs are already being called upon in national and local signage applications for their operational benefits.

Curb Electricity Consumption
With an energy savings of up to 80 percent over neon, LED technology holds great promise for reducing electricity consumption. Other benefits, such as optically efficient size and precise electronic control, may yield new types of signage in the future and offer alternate ways to promote corporate identities.

Understanding the budget-saving value of this new light source and the pressure to reduce energy usage requires the application of a metric that helps accurately cost-analyze the purchase of lighting signage systems - namely, lifetime cost of ownership. This metric, which takes into consideration that the cost of electricity and maintenance labor to operate a lighting system over time can far outweigh the initial purchase price, provides a longer-term, more-realistic analysis of a signage system’s true cost over its lifetime.

Lifetime cost of ownership includes the purchase price, the contractor installation charges, and the total estimated energy usage and maintenance costs for repair and replacement over the lifespan of the system. For LED-based lighting, that period is typically 10 years. Any established lighting manufacturer is able to provide data on its products’ energy usage and future maintenance costs; from these figures, building owners can calculate lifetime ownership costs.

Payback in 2 to 3 Years
Initially, LED-based signage will cost a bit more than neon, yet it will more than make up for that initial investment by consuming up to 80-percent less energy. In addition, extremely low-maintenance requirements mean greatly reduced maintenance bills (as compared to regularly replacing broken or burned-out neon) over the projected 10-year life of the system.

Typically, LED-based signage pays for itself in 2 to 3 years. After that, the building owner is saving money on energy and maintenance each year. Be aware that the cost of LED signage in the construction phase will be recouped very quickly through lower energy bills and maintenance charges; taking a long-range view is extremely important.

There are also intrinsic environmental benefits to LEDs that may come in handy in the future (i.e. if governments begin taxing energy usage or incorporate a system of “carbon tax credits” to reduce consumption, which many business leaders agree is almost certain to occur in one form or another). With lighting consuming 20 to 25 percent of all electricity used on an annual basis, and given the difficulty of siting and building new power plants, an effective LED system offers an opportunity to contribute to the cause of reducing electricity usage.

Grant Harlow is director of product marketing at Burnaby, BC-based TIR Systems Ltd. (

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