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LED Lighting Retrofits for Ohio Commercial Buildings

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The short answer

Lighting used about 17% of the electricity in U.S. commercial buildings in EIA's 2018 survey, and closer to a quarter in stores and warehouses. Replacing fluorescent, metal-halide or high-pressure sodium fixtures with LEDs — and adding occupancy and daylight controls — cuts kWh, lowers monthly demand, and, because lights are on during hot summer weekday afternoons, trims the capacity tag that sets next year's generation cost. Ohio's utilities no longer offer business lighting rebates, so a retrofit has to pay back on bill savings alone; at 2026 electricity prices many still do within a few years.

For the rest of the building, see HVAC efficiency and smart building controls, which cover tying lighting into schedules and peak-alert routines. For payback, NPV and IRR formulas, see energy efficiency ROI; for financing options, see funding upgrades without utility rebates.

How much of your electricity goes to lighting?

EIA's Commercial Buildings Energy Consumption Survey (CBECS) breaks electricity use into end uses by building type. The 2018 figures below are the most recent available.

Building type (CBECS 2018) Lighting share of electricity Largest other electric end uses
All commercial buildings 17% Ventilation 18%, cooling 14%
East North Central region (Ohio, Indiana, Illinois, Michigan, Wisconsin) 18% Ventilation 19%, refrigeration 11%
Warehouse and storage 24% Cooling 16%, refrigeration 11%
Retail (mercantile) 23% Ventilation 19%, cooling 12%, refrigeration 12%
Office 17% Ventilation 28%
Education 17% Cooling 20%, ventilation 15%
Lodging 15% Ventilation 25%
Restaurants (food service) 7% Refrigeration 26%, cooking 16%
Grocery (food sales) 7% Refrigeration 48%

These averages already include buildings with LEDs; a site still running fluorescent or HID fixtures for long hours can sit well above them, while restaurants and grocers usually find more in refrigeration. See the vertical guides for warehouses and retail stores.

Four ways a retrofit shows up on an Ohio bill

  1. Energy (kWh). Watts removed × operating hours. This is the largest stream for long-hour spaces such as warehouses, 24-hour retail, parking structures and exterior lighting.
  2. Monthly demand (kW). On demand-billed rate schedules, lighting is on during the intervals that set the monthly peak, so every kW of fixture load removed lowers the demand charge.
  3. Capacity tag. Your tag is set by your load during PJM's summer peak hours — hot weekday afternoons, when interior lights are on. At the 2026/27 capacity price, each kW of tag costs about $120 a year. You capture that directly on a capacity pass-through contract, or when your next fixed price is set. See capacity tags explained.
  4. Maintenance. LEDs have longer rated lives than the lamps they replace, which matters most where relamping requires a lift or bucket truck.

Less lighting heat also means less summer cooling but slightly more winter heating; a good analysis counts both.

Retrofit options

Approach What changes Pros Watch out for
LED tubes (ballast-compatible) Lamps only Lowest cost, fastest install Depends on the old ballast; ballast failures continue
LED tubes (ballast-bypass) Lamps plus rewiring Removes ballast losses and failures Requires an electrician and fixture labeling
Retrofit kits New driver and LED boards inside existing housings Near-new performance without ceiling work Kit must be listed for the fixture
New fixtures Whole luminaire Best optics, easiest to add controls Highest cost; more disposal
High-bay and exterior replacements Replace metal-halide or HPS Large wattage reductions, instant restrike Match light levels to the task, not the old wattage

Design to the light levels the space needs; where older spaces are over-lit, a layout with fewer fixtures saves more than a one-for-one swap.

Controls: the second half of the savings

LEDs reduce watts; controls reduce hours. The main options:

  • Occupancy or vacancy sensors in restrooms, storage rooms, conference rooms and warehouse aisles.
  • Daylight dimming near windows and skylights.
  • High-end trim, setting fixtures below full output when full output isn't needed.
  • Photocells and time clocks for exterior and sign lighting, which should never run in daylight.
  • Networked lighting controls, which add scheduling and reporting and can join a peak-alert routine.

Major lighting alterations can trigger energy-code control requirements, so have your contractor confirm what your local building department enforces before you finalize the design.

Worked example (illustrative)

Assumptions, not quotes: a warehouse replaces 100 metal-halide high-bays drawing about 455 W each (lamp plus ballast) with 150 W LED fixtures. Lights run 4,000 hours a year. Energy-related charges are assumed at $0.10/kWh, the demand charge at $8 per kW-month, and installed cost at $350 per fixture.

  • Load removed: 100 × (455 − 150) W = 30.5 kW
  • Energy: 30.5 kW × 4,000 h = 122,000 kWh × $0.10 = $12,200 a year
  • Demand: 30.5 kW × $8 × 12 = $2,928 a year
  • Capacity (pass-through contract): 30.5 kW × ~$120 = about $3,660 a year
  • Project cost: 100 × $350 = $35,000
  • Simple payback: $35,000 ÷ $15,128 ≈ 2.3 years on energy and demand; about 1.9 years including capacity

Adding occupancy sensors that cut run hours by an assumed 25% saves another 15 kW × 1,000 h = 15,000 kWh, or $1,500 a year at the same rate. Use your own tariff, contract and hours before deciding.

Funding without utility rebates

  • Utility rebates are gone. AEP Ohio's business programs were withdrawn in April 2024, PUCO rejected FirstEnergy's business program in May 2024, Duke Energy Ohio kept only a low-income program in May 2025, and AES Ohio's programs ended under House Bill 6 at the end of 2020. Any page promising Ohio utility lighting rebates in 2026 is out of date — see what incentives are left.
  • Section 179D ended for projects beginning construction after June 30, 2026.
  • Depreciation. P.L. 119-21 made 100% first-year bonus depreciation permanent for eligible property acquired after January 19, 2025. Whether a lighting project qualifies depends on how it's classified, so confirm with a tax adviser.
  • Financing. Equipment leases, energy-as-a-service, C-PACE for property owners in participating communities, and USDA REAP guaranteed loans for rural small businesses (new REAP grants paused since April 1, 2026).

Owners vs tenants. Whoever pays the electric bill keeps the savings — the landlord in a gross lease, the tenant in a net lease. When payer and owner differ, a lease clause sharing cost or savings is often what gets the project built.

Disposal and your supply contract

Fluorescent and HID lamps contain mercury. Ohio EPA recommends managing spent lamps under the universal waste rules: store them unbroken in labeled containers, don't crush them, and send them to a universal waste handler or recycler.

If a retrofit will cut usage sharply, tell your supplier. Large drops can fall outside a fixed-price contract's usage bandwidth.

FAQ

How much can an LED retrofit save an Ohio business?

It depends on the watts removed, operating hours and your rate schedule. Long-hour spaces with metal-halide or fluorescent fixtures often pay back in a few years on bill savings alone, and demand and capacity savings add to the kWh savings.

Do AEP Ohio, Duke, FirstEnergy or AES Ohio offer LED rebates in 2026?

No. None of Ohio's investor-owned utilities offers general business efficiency rebates in 2026.

Do LEDs lower my capacity tag?

Yes, if the lights you replaced were on during PJM's summer peak hours. Each kW removed is worth about $120 a year at 2026/27 prices, captured directly on a capacity pass-through contract or when your next fixed price is set.

Should I add lighting controls when I retrofit?

Usually. Controls cost the least to add during a retrofit, and they cut hours of use, which LEDs alone don't.

Sources

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