Commercial LED Retrofit ROI: How Brooklyn Buildings Save Thousands

For Brooklyn building owners and property managers, lighting costs represent one of the largest controllable operating expenses. In a typical commercial building, lighting accounts for 30 to 40 percent of total electricity consumption. With Con Edison’s commercial rates among the highest in the nation, that percentage translates to substantial dollar amounts. A commercial LED retrofit offers one of the fastest and most reliable returns on investment available in building improvement today.

What Is a Commercial LED Retrofit?

A commercial LED retrofit involves replacing outdated lighting fixtures, typically fluorescent tubes, metal halide, or high-pressure sodium fixtures, with modern LED alternatives. Unlike a simple bulb swap in a residential setting, a commercial retrofit is a systematic project that addresses the entire lighting infrastructure of a building.

We have found that treating this as a system upgrade rather than a simple product swap yields the best long-term results.

The retrofit can take several forms depending on the existing fixtures:

Tube replacement involves replacing fluorescent tubes with LED tube lamps that fit into existing fixtures. This is the least expensive approach but offers moderate improvements.

Retrofit kits replace the internal components of existing fixtures with LED modules, converting them to LED operation while keeping the housing. This approach offers better performance than tube replacement while minimizing installation time and cost.

Full fixture replacement installs new LED fixtures in place of old ones. This delivers the best performance, efficiency, and aesthetics but comes at a higher initial cost.

Panel light conversion replaces drop-ceiling fluorescent troffers with flat LED panel lights, dramatically improving light quality and aesthetics in office environments.

Selecting the Right Technology

Choosing the right hardware is critical for longevity and rebate qualification. We almost exclusively recommend fixtures that meet DesignLights Consortium (DLC) SSL v6.0 standards. This certification ensures the lights meet strict efficiency and quality benchmarks.

For many of our Brooklyn office clients, we install RAB Lighting EZPAN flat panels. These edge-lit fixtures eliminate the “buggy whip” look of old fluorescents and provide a clean, modern aesthetic. If you are upgrading a high-end retail space or showroom, we might suggest the Cree ZR Series troffers for their superior color accuracy and architectural look.

The Numbers: Real ROI for Brooklyn Buildings

Let us work through a realistic scenario for a typical Brooklyn commercial building. Consider a 20,000-square-foot office building with 400 four-foot fluorescent fixtures, each consuming 64 watts (two 32-watt T8 tubes per fixture). The lights operate an average of 12 hours per day, 260 days per year.

Current annual lighting cost: 400 fixtures multiplied by 64 watts equals 25,600 watts, or 25.6 kW. At 12 hours per day and 260 days per year, that is 79,872 kWh annually. At Con Edison’s average commercial rate of $0.28 per kWh, the annual lighting electricity cost is approximately $22,364.

After LED retrofit: Replacing each fixture with a 30-watt LED panel reduces total consumption to 12,000 watts, or 12 kW. The same operating schedule yields 37,440 kWh annually, costing approximately $10,483.

Annual energy savings: $11,881

The retrofit cost for 400 LED panels, including installation, typically ranges from $28,000 to $36,000 for this size project. That puts the simple payback period at 2.4 to 3.0 years, which is excellent for a capital improvement that will last 15 to 20 years.

The Impact of Demand Charges

It is important to note that the savings calculation above only accounts for usage (kWh). Most commercial Con Edison bills also include demand charges, which are fees based on your highest 30-minute peak usage period in the month.

By cutting your lighting load from 25.6 kW to 12 kW, you are permanently lowering that peak demand ceiling. In Brooklyn, demand charges can exceed $20 per kW in summer months. This reduction can add another $3,000 to $5,000 in annual savings that are often overlooked in simple ROI calculators.

Beyond Energy: Additional Savings

The energy savings alone make a compelling case, but the total ROI of a commercial LED retrofit includes several additional savings categories.

Maintenance reduction. Fluorescent tubes typically last 20,000 to 30,000 hours, requiring replacement every two to three years in a commercial setting. LED fixtures last 50,000 to 100,000 hours, meaning a decade or more without replacements. For a 400-fixture building, this eliminates hundreds of tube replacements and the labor costs associated with them.

We see this impact directly on operating budgets. In NYC, a single truck roll for a licensed electrician to change ballasts or lamps can cost $100 to $200 just for the trip fee, plus an hourly rate of $100 to $130. Eliminating these service calls saves most Brooklyn buildings $2,000 to $4,000 annually.

Reduced HVAC costs. Fluorescent fixtures generate significantly more heat than LEDs. In a commercial space, that excess heat must be removed by the air conditioning system. Reducing the heat output of your lighting system can lower cooling costs by 10 to 15 percent during the summer months, adding another $1,500 to $3,000 in annual savings for a typical Brooklyn building.

Demand charge reduction. Commercial Con Edison customers pay demand charges based on their peak power usage. Cutting lighting power consumption by more than 50 percent directly reduces your demand peak, lowering the demand charge component of your bill. This can save an additional $1,000 to $3,000 annually depending on your rate structure.

Available Incentives and Rebates

Several programs help reduce the upfront cost of commercial LED retrofits in Brooklyn, but timing is critical.

Con Edison Commercial and Industrial Energy Efficiency Program. This program offers prescriptive rebates for lighting upgrades, typically $15 to $50 per fixture depending on the type of retrofit. For a 400-fixture project, rebates can total $6,000 to $20,000, significantly reducing the net project cost and accelerating payback.

Important Warning: Many NYS commercial lighting incentives are scheduled to sunset or phase out by December 31, 2025. We are advising all our clients to lock in their pre-approvals now to avoid missing out on thousands of dollars in “free money” from the utility.

NYSERDA Commercial Lighting Incentives. New York State offers additional incentives through NYSERDA’s Commercial New Construction and Existing Facilities programs. These can be combined with Con Edison rebates in many cases.

Local Law 97 compliance value. For buildings covered by New York City’s Local Law 97 carbon emissions limits, reducing electricity consumption through LED retrofits directly reduces your building’s carbon footprint and helps avoid potentially enormous LL97 fines that begin in 2024. The compliance value of the retrofit adds another layer of ROI that should be factored into the investment decision.

Failure to comply results in a penalty of $268 per metric ton of CO2 over the limit starting in 2026. For a large commercial property, this could mean tens of thousands in annual fines. An LED retrofit is often the most cost-effective first step to lower your emissions score.

Federal tax benefits. Section 179D of the tax code provides deductions for energy-efficient commercial building improvements, including lighting. Consult your tax professional about qualifying for this deduction.

For 2025 projects, the Section 179D deduction has been adjusted for inflation and can be as high as $5.81 per square foot if specific prevailing wage and apprenticeship requirements are met. Even the base deduction is now $0.58 per square foot, which is a significant tax benefit for larger warehouses or office complexes.

Lighting Quality Improvements

While the financial case is compelling, the improvement in lighting quality also delivers business value:

Better color rendering. Modern LEDs offer CRI (Color Rendering Index) scores of 80 to 90, compared to 60 to 70 for standard fluorescent tubes. This makes colors appear more accurate and vibrant, which is particularly important for retail spaces, design studios, and healthcare facilities in Brooklyn.

Reduced flicker. LED lights eliminate the subtle flicker that fluorescent tubes produce. Studies show that eliminating flicker reduces eye strain, headaches, and fatigue among building occupants. For office environments, this translates to improved employee productivity and comfort.

Adjustable color temperature. Many modern LED systems offer tunable white capability, allowing you to adjust the color temperature of the light throughout the day. Cooler light in the morning increases alertness, while warmer tones in the afternoon reduce eye strain.

Dimming capability. LED fixtures offer smooth, flicker-free dimming that fluorescent fixtures cannot match. Combined with occupancy sensors and daylight harvesting, dimmable LEDs can reduce lighting energy consumption by an additional 20 to 30 percent beyond the base LED efficiency gains.

Planning Your Brooklyn LED Retrofit

A successful commercial LED retrofit starts with a professional lighting audit. This assessment evaluates your current lighting system, identifies the most cost-effective retrofit approach, and calculates projected savings and payback. The audit should include a fixture inventory, energy analysis, photometric calculations to ensure the new lighting meets code and occupant needs, and an incentive qualification review.

We use precision tools to ensure your savings projections are accurate, not just guesses. Our team utilizes Fluke 941 light meters to capture baseline illumination levels and HOBO UX90 occupancy loggers to track exactly when and how your spaces are used. This data allows us to design a system that puts light exactly where you need it and nowhere else.

Our team at Brooklyn Electrical Experts has completed commercial LED retrofit projects across Brooklyn, from small retail shops to large office buildings and warehouse spaces. Every project begins with a comprehensive audit and detailed proposal so you understand the exact investment, savings, and payback before any work begins.

The Bottom Line

A commercial LED retrofit is one of the most straightforward investments a Brooklyn building owner can make. With payback periods of two to three years, annual savings exceeding $15,000 for a mid-sized building, available utility rebates that reduce upfront costs, and regulatory compliance benefits, there is a compelling case for moving forward. The longer you wait, the more money you spend on inefficient lighting every month.