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Gabriela Anez-Lobon
By Gabriela Anez-Lobon on May 16, 2023

LED Lighting Financing (& 5 Alternatives to LED Finance)

Lighting is an essential element of an aesthetic environment. However, traditional lighting systems can use excessive electricity and require costly maintenance.

If you're interested in retrofitting your business with a better alternative such as LED lighting, initial capital investment can be extensive. Unfortunately, LED lighting financing isn't much better. It requires established credit, frequent budgeting issues, and ongoing payments. 

Future Energy Solutions (FES) is a commercial lighting company that offers alternatives to financing a LED retrofit project for your business. 


LED Lighting Finance: Your Options and Alternatives

LED is an effective alternative to many traditional lighting systems that use excessive electricity, lack aesthetics, and require costly maintenance.

However, you may wonder about costs for retrofitting your location with state of the art LED lighting. It's important to know the pros and cons of LED lighting retrofit financing before you choose that option and look at the alternatives. 

Some of the most prominent alternatives to LED lighting financing include LED Lighting as a Service (Laas), government funded grants, rebate programs and tax credits, in-electric rate funding, and energy savings performance contracts (ESPCs). 

FES partners with thousands of business owners to achieve the financial advantages of upgrading the lighting products in their facilities while helping customers understand how an LED lighting upgrade can benefit their companies. Primarily, we offer alternatives to LED lighting financing. 


LED Lighting Finance Pros and Cons

LED retrofit financing is available to businesses seeking to upgrade lighting fixtures inside and outside their facilities. There are many incentives; however, it's important to be aware of the potential challenges and negative aspects that must be overcome if you choose LED financing.  


  • Your energy efficient LED lighting project can be 100% funded with low-interest rate financing. This allows you to cover future payments on your loan with monthly energy savings. 

  • You can re-allocate your energy savings to pay for LED financing. Thus, you can begin your LED program with no capital expense required.

  • LED lighting financing restricts your cash flow with ongoing payments that must be budgeted for monthly or quarterly. 


  • You will likely have to make ongoing or monthly payments on your financing plan, often over a long period of time.

  • Without an ongoing relationship with the provider of your LED lights, you may be stuck with maintenance costs.

  • Removal of your existing lighting system and installation of your new LED products may not be included in the financing options available to you.


LED Lighting Financing Alternatives

There are ways to fund an LED lighting project other than through financing. It's important to be aware of these programs and the positive aspects that may benefit your business.

1. Lighting-as-a-Service (LaaS)

Lighting-as-a-Service (LaaS) is an innovative alternative to LED lighting financing that allows you to avoid ongoing payments and contributes to many other benefits of retrofitting your business with LED lighting. 

LaaS through Future Energy Solutions requires no upfront capital investment. Instead, you connect with a savings specialist who will analyze your existing energy utility bills and create an LED program where you get to save a significant amount on electricity and FES is paid a percentage of your savings. 

When you work with FES, we offer LaaS that comes with removal of your outdated lighting systems, design and construction of an LED program, and all-inclusive maintenance. It results in an instant reduction in your electric bill and supports your company's investment in the environment, customers, employees, and community. You can use your savings to boost your organization's core operational activities instead of costly utilities. 

If you are interested in learning more about how Future Energy Solutions can maximize your LED lighting package, contact one of our savings professionals today.


2. Government LED Lighting Funding Grants

The government may actually be willing to pay your business to retrofit your location with energy efficient commercial LED lighting. Green energy grants for small businesses as well as large corporations are available from state, local, and federal government agencies. Educational institutions, corporations, utility companies, and other groups also offer energy efficiency grants. 

It's often beneficial to start with state grants, as there is typically less competition than with federal options. Some grants may require you to match the agency or donor's contribution. While federal grants may be more difficult to obtain, they often offer more funds for those who are eligible. State and federal grants for energy efficient upgrades can be found at the U.S. Department of Energy


3. Energy Efficiency Rebate Programs & Tax Credits

Electric companies as well as state and federal agencies, such as the Internal Revenue Service (IRS), offer LED lights rebates and incentives for commercial and industrial lighting upgrades. Utility providers incentivize energy-saving alternatives because it is a better use of their capital than expanding power plant capacities. When consumption is decreased by a responsible company, it can lower monthly payments for the business as well as positively impact the bottom line of the utility company. You can find information about rebates from your electric company. 

The IRS and many states offer tax credits to large and small companies that upgrade to energy efficient methods of lighting. More information about tax credits, rebates, and savings at the state and federal level can be found through the U.S. Department of Energy's Database of State Incentives for Renewables & Efficiency website (DSIRE)


4. In-Electric Rate Funding: Savings From Your Utility Company

LED retrofit projects may also be funded through in-electric rate funding that does not involve upfront capital costs. The efficiency of the new LED lighting is factored into your price per kilowatt hour. Your business will see a cost-effective reduction in consumption that directly translates into immediate savings. 


5. Energy Savings Performance Contracts (ESPCs)

Energy Savings Performance Contracts (ESPCs) are an alternative to financing LED lighting projects. They allow businesses to accelerate investment in affordable energy conservation while keeping cash flow positive. Organizations form a partnership with energy service companies (ESCOs), allowing facility owners to pay for property improvements with anticipated energy savings. 


FES: A Better Alternative to LED Financing

Future Energy Solutions offers an effective alternative to LED lighting retrofit financing. Instead of requiring capital upfront or paying over time, FES shares a percent of your energy savings. Our LED lighting program is full service, from analyzing your needs through removing your existing systems and installing new LED lighting. Contact us today for more information. 

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Published by Gabriela Anez-Lobon May 16, 2023
Gabriela Anez-Lobon

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