How to calculate and assess led financials and ROI

Added on 06 January 2022

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How to calculate and assess led financials and ROI

As technology advances, it also becomes more affordable both at the point of purchase and throughout its life span. This is especially true for LED systems. In addition to lower installation and energy costs when compared to legacy lighting, LEDs produce higher quality light and higher PPF levels while reducing ventilation and environmental cooling costs. When factoring the return on investment (ROI) of an indoor or multi-tier LED retrofit, it is important to calculate not only savings but also the potential for increased revenue from crop yields over time.

Regarding yield, an LED trial at OutCo Labs studied the correlation between PPFD and yield, documenting in particular the gains possible with Fluence LEDs. Their team tested four LED light intensities against an HPS room that received 700 ?mol/m²/s during flowering. Ultimately, the Fluence SPYDRx PLUS fixtures-which delivered 800 ?mol/m²/s while using 44% less energy than the 1000-watt double-ended HPS-increased trimmer flower weight by 13.5%. OutCo similarly increased revenue by +13.5% without significantly increasing other expenses. In fact, it was found that overall electrical expenditures actually decreased due to lower HVACD costs.

It must be noted that proper environmental control and pest management are crucial factors in ROI for high-PPFD lighting. That is, without the right growing conditions, cultivators will struggle to achieve maximum returns.

The optimal spectrum for each crop type is another key consideration for indoor growers because it influences yield, crop quality, and electrical costs. An expertly designed lighting system will offset additional nutrient costs associated with a greater yield by reducing pest management costs. Furthermore, the remaining service life of your existing HPS system and your local climate should be part of your ROI calculation.

Most importantly, cultivators should be aware that they may qualify for sizeable incentives and rebates to offset the installation costs of an LED retrofit. Many Fluence customers secure a 20-30% incentive, and some have received more than 50% rebates from their utility companies. In addition to learning more about ROI, incentives, and rebates with our comprehensive Indoor Retrofitting Guide, Fluence has a dedicated Rebate and Incentives Team that will work with you, your utility service, and their documentation to get you the largest possible incentive.

While calculating ROI may seem laborious and complex, a well-researched conclusion can pay dividends for professional cultivators and establish major competitive advantages in the market. Fluence is here to assist you through this process from start to finish. Our experts work directly with growers world-wide to assess the numerous factors that influence ROI in relation to their existing systems, environment, and crops.

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