Are LED lights worth it for a small business?

The quick test

LEDs pay back fastest where lights are on for many hours each day: shops, offices, cafés, workshops and corridors. They pay back slowly in rooms used for minutes a day. The sum is always the same: cost of the upgrade ÷ yearly saving.

Worked example

These wattages and prices are assumptions for illustration. Replace them with your own.

• 20 old fittings at 70W each, replaced by LEDs at 30W each: saving 40W each.
• Total saving: 20 × 40W = 800W = 0.8 kW.
• Shop open 10 hours a day, 6 days a week, 52 weeks: 10 × 6 × 52 = 3,120 hours.
• Energy saved: 0.8 kW × 3,120 = 2,496 kWh a year.
• Money saved at 24.51p/kWh (the DESNZ Q2 2026 non-domestic average, which includes CCL): 2,496 × £0.2451 = about £612 a year.
• If the job costs £1,200 in total: £1,200 ÷ £612 = about 2 years.

Your own rate may be higher or lower; check your per-kWh price and our cost calculator.

What else changes the answer

• Controls. The Carbon Trust has said lighting controls such as sensors and timers can cut lighting use by 30% to 50% in typical retail, office and industrial settings. That article dates from 2011, so treat the range as a guide only.
• Less heat. Old bulbs give off heat. In summer that can lower cooling load; in winter your heating works a little harder.
• Maintenance. Fewer replacement bulbs and less labour for hard-to-reach fittings.
• Quality. Check colour rendering for shops and salons, dimmer compatibility and the warranty.

Watch the contract side

Saving kWh cuts your bill on any deal, but standing charges stay the same. Read how standing charges work. Rented premises may need landlord consent to change fittings, and EPC rules can affect the choice: see commercial EPCs.

Get at least two written quotes that show wattage before and after, number of fittings, and warranty length, so you can check the payback maths.

Common mistakes

Three errors crop up repeatedly. First, buying the cheapest bulbs without checking the light output, so staff or customers find the space dim and you end up adding fittings. Second, ignoring the hours: a store cupboard light that runs 15 minutes a day will never repay an upgrade, so prioritise where the lights burn longest. Third, forgetting disposal and installation labour in the cost line, which makes the payback look better than it is. Keep a simple spreadsheet with fitting type, old watts, new watts, hours and cost, and the answer for each area falls out.

Next steps

1. List fittings, wattages and hours on.
2. Run the sum above with your unit rate.
3. Prioritise the longest-running lights.
4. Read our LED lighting guide and funding options.

Biz Energy is independent and not affiliated with any supplier, broker or comparison site, and takes no commission. This is general information, not legal, tax or financial advice.