Car Dealership Lighting Retrofit Benefits

Car Dealerships might often be overlooked when you think of retrofit opportunities, but they actually have one of the highest lighting costs per sq. ft.

Car Dealerships often play “lighting wars” as they are generally grouped together along a strip and want to stand out from their neighbors. This usually results in Dealers over-lighting their lots to attract the customers to their lot rather than the guy next door.

Until recently there weren’t too many options for exterior lighting for car dealers, they pretty much had two types of light sources available: Metal Halide (white light: at gas stations, football games, etc.) or High Pressure Sodium (yellowish orange light: most high way lighting).

Among the two, the main choice for Dealers has been Metal Halide because of the clean, crisp-white color it gives off and the typical wattage is always either 400 or 1000 watts.

Nowadays, the new standard has become Induction Lighting. Most municipalities have already realized the benefits and have retrofitted their pole and street lights.

What is Induction Lighting?

Induction light fixtures produce the same amount of usable lumens (light) as Metal Halides or HPS and only use about 50% of the electricity, that means that as soon as the poles are retrofitted the dealer will see an immediate drop of about 50% in their electric bill the next month. They also have a lamp life of 100,000 hrs. or approx. 20 years (If they are on 12 hours A day 365 days a year). Compared to MH or HPS lamps, which have an average life of 15,000-24,000 hours, Induction light fixtures will have significantly less bulb and ballast changes resulting in substantial maintenance savings. See Induction Lighting comparison chart for more info.

Any Help From Uncle Sam?

There are also State incentives and Federal Tax Credits available to help offset the retrofit. New Jersey has been offering $100-$200 for every fixture (400w-1000w) changed out or retrofitted; meaning, if you change 50 pole lights you will qualify for $5,000-$10,000 in State Incentives.
There are also Federal tax credits available through the Energy Efficient Commercial Buildings Tax Deduction (CBTD) and Bonus Depreciation. The CBTD or EPAct (Energy Policy Act) allows a business who has installed or retrofitted his interior space with energy efficient lighting, while still meeting acceptable light levels, to earn an Accelerated Tax credit of up .60 cents a square ft. For a 100,000 sq. ft. facility the Credit would be $60,000.

For an exterior retrofit (e.g. Pole lighting), the dealer can use the bonus depreciation Deduction which allows the owner or leaseholder to deduct 100% of the equipment purchased in the year it was put in service rather than the typical 39 year straight depreciation.

The Government has recognized the obvious benefits of retrofitting and will not be offering these state and federal benefits much longer. This Bonus Depreciation was put in place until 12/31/2011; after 2011 the deduction amount will only be %50. The time to act is now and the cost of waiting is a large price to pay, especially if you retrofit after 2011.

Car Dealership Economics

Forty-eight percent of the nation’s energy—including 70 percent of its electricity—is consumed by buildings, says the U.S. Green Building Council. Dealerships — with their 24/7 security systems and extensive lighting — tend to devour energy. Approximately $1.9 Billion will be spent on Energy. EPA estimates that if all dealerships reduced their energy consumption by just 10 percent, they would save about $193 million in energy costs and cut more than one million tons of greenhouse gases each year.

(Source:National Automobile Dealers Association)

In 2008, dealers spent approximately $7.3 billion advertising manufacturers’ products, or more than $20 million per day. These expenditures are in addition to what the manufacturer spends to advertise its product, thus augmenting the automakers’ marketing efforts. Dealers also spend $329 million annually to train sales personnel to remain knowledgeable about manufacturers’ products. In addition, it is estimated that dealers spend $873 million annually on regulatory issues such as Truth in Lending and Graham Leach Bliley Act/privacy compliance.  The cost of waiting for outweighs the amount that will be lost if we don’t act now, Usually with the savings alone you can expect a 12-18 month ROI, plus an overall improvement in your lighting quality.

Call us today or fill out our request form to go over the specific benefits and find out how much you can save.

For tax related info check out 179d.org

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