LED technology is rapidly improving and becoming more common in business settings. Although LEDs aren’t ready for every lighting application, they’re a good choice for a growing variety of uses, including replacements for incandescent lamps, parking-lot lighting, commercial signage, task lighting, refrigerated cases, recessed downlighting, ambient lighting in offices, and many high-bay applications.

Despite the technological advances, you should still take care in selecting LEDs that will meet your illumination needs, match their manufacturers’ claims, and work with any controls that you employ. The US Department of Energy’s (DOE’s) Solid State Lighting website is a good general source for tracking the progress of LED technology.

In 2017, the DOE published the report Adoption of Light-Emitting Diodes in Common Lighting Applications, in which it asserts that there is potential for significant energy savings from both LED adoption and implementation of connected controls—systems in which LED-based lighting systems are fitted with integrated sensors and networked controllers (either wired or wireless), enabling the products within the system to communicate with each other and transmit data.

What are the options?

LEDs are compact, energy-efficient solid-state light sources that offer longer operating lifetimes than many other sources. They are also vibration-resistant, provide directional light output, turn on instantly, and perform well at cold temperatures. LEDs are easier to dim than compact fluorescent lamps (CFLs), but not all LED products are dimmable; of those that are, not all of them work on all existing dimming circuits. In the past, LEDs were limited to niche applications such as traffic signals, exit signs, and other uses. But in recent years, as the performance of white-light LEDs has improved and the costs have come down, this lighting technology has become competitive in a range of areas. Many of the applications are ones that have long been dominated by traditional light sources; the DOE’s lighting adoption report lists an assortment of LED applications and how common they have become (Figure 1).

Figure 1: 2016 adoption of LED lighting applications

According to the DOE’s report Adoption of Light-Emitting Diodes in Common Lighting Applications, many LED applications should still be considered in the early majority stage, meaning that users are beginning to adopt LEDs for the listed applications, though 45% to 95% of users have yet to convert. Some applications, such as exit signs and traffic signals, are now mainstream because almost all existing users have converted to LEDs.
Figure 1: 2016 adoption of LED lighting applications

Integral replacement lamps

Integral lamps, which feature an LED-and-driver package that you can install as a single unit in a conventional socket, are available in the full range of lamp types including A-lamps (the technical term for the commonly used light bulb) and PAR (parabolic aluminized reflector) lamps (which are used to direct light in flood or spot patterns). Compared to the halogen and CFL alternatives, LEDs last longer and are more efficient (Figure 2).

Figure 2: LEDs outlast many other light sources

LEDs offer longer lamp life than most other light sources, although induction lighting and some linear fluorescent products also provide very long life. Note that lower-cost LED A-lamps are available with an expected life of 10,000 hours or less.
Figure 2: LEDs outlast many other light sources

LEDs are also more expensive than the alternatives, but prices are falling. The challenge has been to develop products that provide the same amount of illumination as the standard incandescent products in the same size package. Heat is the enemy of LEDs: The more power you put in, the more light you get out, but the more heat you have to dissipate. As LEDs have become more efficient, the size of the incandescent equivalents they can match has improved. LED A-lamps are now available in sizes up to 100-watt (W) incandescent equivalent, PAR38 lamps up to 90-W equivalent, and MR16 lamps up to 50-W equivalent. These lamps are also available in a range of color temperatures, and many products have a good color rendering index (CRI) score, which indicates how well lamps render colors close to their natural appearance. CRI values above 80 are considered good. For more information about color, see Energy Star’s Color and Mood page.

Exterior lighting

In the past, the exterior application of LEDs has struggled to reach mainstream adoption, mainly due to issues of high cost and heat dissipation from larger fixtures. Thankfully, exterior LEDs are now used in everything from parking lots and garages to street lights, airports, and even professional football stadiums. LEDs can be a good choice for parking and streetlighting applications because they perform well in the cooler conditions that are typically found outside at night.

LEDs also provide more-even light distribution than their fluorescent and high-intensity discharge (HID) counterparts, and they produce less light pollution, which improves aesthetics and saves energy. The DOE’s Better Buildings Solution Center estimates that employing LEDs can cut energy use by 40% or more depending on the application. Better Buildings published an LED Site (Parking Lot) Lighting Specification (PDF), if you’d like to learn more.

Glare can be an issue with LEDs in exterior applications, particularly with large fixtures—manage it by changing lamp positions, or using reflector lenses or shades.

LED troffers and tubes

For ambient lighting, LED troffers—more so than tubular LED lamps—have become an effective alternative to linear fluorescent fixtures. Troffers are located in most commercial office spaces as long, recessed lighting fixtures. LED options for replacing fluorescent troffers include tubular LEDs (also called linear replacement lamps), retrofit kits (which use the existing housing and may include new lenses), and new fixtures. A 2016 Snapshot on Troffers (PDF) from the DOE’s CALiPER program demonstrated that LED troffers have higher efficacy than fluorescent troffers, and their color and power quality are comparable. Because tubular products work better in some types of fixtures than others, it’s important to test their application to ensure that they provide the needed light distribution. For more information on LED troffers, see the CALiPER Application Summary Report 21: Linear (T8) LED Lamps (PDF).

The DOE’s Exploratory Study: Recessed Troffer Lighting (PDF) also looked at retrofit kits for troffers, which typically keep the fluorescent fixture’s housing, replace the ballast with an LED driver, and either use the existing fixture’s lens or louver or replace it with a new diffuser. Although there were quality-control issues, the researchers concluded that the retrofit kit approach avoids some of the safety concerns that arise with the tubular LED replacement lamps, such as risk of electrical shock.

Dimmable fixtures

LEDs are easier to control than either fluorescent or HID technology and, unlike fluorescents, frequent switching does not shorten their lamp life. LEDs also respond instantly, whereas HID lamps have a long delay time on start-up and restrike—that’s why HID lamps can’t be turned on and off with occupancy sensors (they can be dimmed, but not to less than 50% of full power). LED light sources employ a driver similar to ballasts found in fluorescent and HID systems, and drivers, like ballasts, can be dimmable.

Despite common expectations, it’s not easy to get LED lamps to dim both reliably and uniformly on the millions of existing circuits that are in place in homes and small businesses throughout North America. When purchasing dimmable LEDs, make sure they are compatible with the dimming circuits they are installed on. Unlike other light sources, which can burn out more quickly when dimmed, dimming can lengthen the life of LEDs because they will run cooler.

Color tunable

You can color-tune LED lighting with controls to mimic the dimming behavior of incandescent lamps. When incandescent lamps are dimmed, the filament temperature decreases, causing the light to change from white to yellow or red-orange—a desired effect for senior living centers, multifamily housing, and restaurants or hospitality environments. Studies in senior living centers have shown that the residents’ sleep cycles benefited significantly from the addition of color-tuned lights. For more information on color tuning, see the DOE’s LED Color-Tunable Products page.

LED controls

Energy-efficient light sources are only one part of the process of reducing the energy used by a lighting system. A well-designed lighting control system will provide the right amount of light where and when it’s needed, and it will cut lighting energy use by 5% to 60%, depending on the baseline conditions and the control strategies used. Lawrence Berkeley National Laboratory published A Meta-Analysis of Energy Savings from Lighting Controls in Commercial Buildings in which researchers reviewed 240 cases described in 88 papers and case studies and summarized the average savings achieved from the major control types (Figure 3).

Figure 3: Energy savings from lighting controls

There are a variety of strategies available to cut lighting energy use. Lawrence Berkeley National Laboratory found that tuning lights suited to specific tasks yield the most savings at 36%.
Table 3: Figure 3: Energy savings from lighting controls

The challenge for end users is justifying the added cost of controls: Even though controls can save more, the initial load from LEDs (compared to other lighting) is less, which means that users are saving a larger fraction of a smaller quantity.

Strip lighting

Manufacturers also produce thin, flexible LED products known as strip lights, which are available either in fixed colors or as color tunable. Strip lights as long as 16 feet are available, and they’re perfect for accent lighting. Waterproof strip lights are available for outdoor use and work well with curved surfaces (Figure 4).

Figure 4: Strip lights fit in unconventionally shaped spaces

Flexible LED strip lights are perfect for accentuating borders or curved surfaces. They work well in tray ceilings or as landscape accents, among other places.
Figure 4: Strip lights fit in unconventionally shaped spaces

High-bay lighting

Although HID and fluorescent lighting still dominate in high-bay applications, LEDs are making inroads and the technology is still improving. When compared with HIDs and fluorescents, LEDs offer similar or greater lighting levels, longer life, similar color quality, more controllability, and the potential for better light-distribution patterns. For example, placing LEDs at the top of storage racks can waste less light and provide more-even light distribution.

The most promising early high-bay applications for LEDs were in cold storage because LEDs’ performance improves in colder conditions. Since then, LED products have become more efficient, and high-bay installations have expanded into general warehousing applications.

For applications other than cold storage, the main concern is heat: LED performance and life are sensitive to high temperatures, and unconditioned spaces can get pretty hot. For applications in which high temperatures are expected, it’s important to check the specs on the equipment. Products are available that are rated for operation at ambient temperatures up to 150° Fahrenheit (66° Celsius), but at a cost premium.

Another property of LEDs that makes them well suited for high-bay areas is that they emit little infrared or ultraviolet radiation, so materials like food or fabrics may have a longer shelf life. Additionally, LEDs contain no mercury, which is a plus in a food-handling environment and could reduce end-of-life disposal costs.

Task lighting

Replacing fluorescent or incandescent lights for task lamps or undercabinet fixtures in offices can save significant amounts of energy. The directional nature of LEDs allows task lamps to be oriented to illuminate only the working area without wasting energy through the use of a reflector or by lighting unused areas. These savings can be further enhanced by removing some or all bulbs from unnecessary overhead lighting (a process called delamping) and using occupancy sensors, which dim or turn off lamps at unoccupied desks. An integrated office lighting approach has the potential to reduce lighting costs by 75% (Figure 5). Even a modestly sized company can save thousands of dollars by using this lighting strategy, which can yield a simple payback period of just a few years in existing buildings.

Figure 5: Energy savings from integrated lighting in a 120-square-foot office space

Using efficient LED task lamps to illuminate only the work area in use allows office managers to reduce the amount of overhead lighting needed. This integrated lighting approach leads to significant reductions in energy costs and a smaller overall carbon footprint.
Figure 5: Energy savings from integrated lighting in a 120-square-foot office space

Recessed downlighting

In this application, one of the chief benefits of LEDs is the directionality of the light output. Reflector-style incandescent lamps are shaped and coated to emit light in a defined cone, but A-style incandescent lamps and CFLs emit light in all directions, leading to significant light loss unless the fixture is designed with internal reflectors. Downlights that use CFLs typically offer a fixture efficiency of only about 50% to 60%. CFL reflector lamps lead to better fixture efficiency, but the lamps themselves are less efficient than bare spiral lamps.

Enter the LED, which boasts directional light output to enable the production of efficient fixtures that emit almost all the light produced. In addition, dimmable LEDs change more smoothly and deeply than CFLs. LEDs are available as integrated packages for recessed cans or as replacement lamps that fit into existing units.

Figure 6 shows a comparison of various types of recessed downlights. Most LED products outperform their CFL cousins, and most surpass the 42 lumens per watt (lm/w) efficacy required for Energy Star fixtures. But the wide range in performance of available LED products means that users must choose with care.

Figure 6: Recessed LED downlight options

The best LED recessed downlights outperform compact fluorescent lamp alternatives, but the wide range of LED performance means that users must choose with care.
Figure 6: Recessed LED downlight options

Accent lighting

Accent lighting is a growing area for LEDs because they can vary in color, create sparkle, and aim the light precisely on an object or area. LEDs have been used in high-end retail stores for their “high-tech” aesthetic, interesting effects, and design flexibility; in cosmetics shops because they do not radiate heat; and in jewelry cases because their point source of light lends a sparkling appearance and their small size enables them to be used unobtrusively.

LEDs have also been successfully used for accent lighting in high-end hotels and to illuminate artwork in museums. The DOE wrote about one such installation at the Smithsonian American Art Museum in Washington, DC, in its report Demonstration of LED Retrofit Lamps (PDF), and about a similar one at the J. Paul Getty Museum in Malibu, California in Demonstration Assessment of Light-Emitting Diode (LED) Retrofit Lamps (PDF).

Exterior signs and architectural lighting

Using LEDs for marquee lighting and exterior commercial signage can result in better visibility, lower maintenance costs, and considerable energy savings. Many businesses have also begun to use LEDs for architectural lighting applications. Traditional architectural lighting may include neon border lights that run around the top of a building or colored floodlights that illuminate building exteriors, facades, or signs. The Hard Rock Casino and Hotel in Las Vegas is one of many high-profile businesses that now use LEDs to provide this sort of exterior nighttime lighting.

You can replace even a traditional neon “open” sign with a comparable LED unit for very little additional cost, while saving 75% or more on energy expenses. And because an LED sign will last two to five times longer than a comparable neon sign, it can be a decade or more before replacement becomes necessary.

Retail lighting

Retail facility managers can link LEDs to occupancy sensors so that cases are only illuminated when shoppers are present. Using occupancy sensors is a great opportunity for stores that remain open 24 hours a day, such as grocery stores. Occupancy sensors aren’t typically used for cases that are illuminated by fluorescent lighting because frequent switching reduces the life of fluorescent lamps, but it does not have the same impact on LEDs. In fact, this approach actually lengthens the life of LEDs—the more time the LEDs are off, the longer they will last.

LEDs can also reduce case compressor loads, particularly in refrigerated cases. Because the displays use lower-wattage lamps, there’s less heat to dissipate. Additionally, the heat sink for an LED can be positioned to allow at least some of the heat to dissipate outside the case, whereas with fluorescent lighting, most of the waste heat must be offset with additional cooling inside the case. And when LEDs are used with occupancy sensors, they’ll spend less time in “on” mode and therefore contribute less to the cooling load.


Reflectors are specially shaped retrofittable metal sheets designed to improve the efficiency and light distribution of conventional white-painted, ceiling-mounted fluorescent downlight fixtures (figure 7). With higher reflectivity and more directional control than the white paint on many existing fixtures, reflectors can significantly decrease the internal losses of fixtures and improve light distribution.

Figure 7: Reflector design

Well-designed reflectors improve fixture efficiency and can widen or narrow light distribution. This fixture also shows a small-cell paracube louver, which reduces glare but absorbs a lot of light.
Figure 7: Reflector design

Well-designed reflectors improve fixture efficiency enough to allow some delamping. Although manufacturers frequently claim that the use of reflectors will allow 50% delamping with little or no reduction in the fixture’s light output, that goal is difficult to achieve―it’s more about the quality of the fixture than the effectiveness of the reflector. In any application, you should consider delamping carefully, bearing in mind that it may also be possible to delamp without a reflector.

Because there’s a large population of existing 2 x 4 fixtures with four 4-foot lamps, it’s common to remove two of these lamps. This can be realistic if one or more of the following conditions are met:

  • The space is measurably overlit; otherwise a reduction in light level won’t be noticeable
  • The existing fixture efficiency is extremely poor and can’t be corrected by cleaning or lens replacement
  • A proposed reflector will provide better light distribution, allowing more uniform illumination at a lower light level
  • Replacement of the lamp and ballast combination increases the average light output per lamp
  • A better lens, diffuser, or louver is also installed

How to make the best choice

One challenge in using LED lighting is identifying good products. Because the technology is still new, it’s easy for manufacturers to exaggerate performance, making it hard for consumers to separate the wheat from the chaff. Several resources are available to help:

  • Energy Star offers lists of qualified Light Bulbs and Light Fixtures for consumers; the lists cover bulbs and fixtures for both LEDs and CFLs.
  • The Qualified Products List (QPL) from the DesignLights Consortium (DLC) encompasses thousands of products from hundreds of manufacturers in more than 30 product categories, covering indoor and outdoor applications—applications that are not already covered by the Energy Star lists. As covered in the DLC’s Technical Requirements Table, products on the QPL must meet certain minimum requirements for life, efficacy, and other factors.

What’s on the horizon?

As LED products continue to improve in performance and decrease in cost, they’ll become cost-effective for an expanding array of applications. There are also products entering the market that take advantage of the digital nature of LEDs, turning them into more than just light sources. For example, a number of products incorporate radio frequency chips for two-way communications with a variety of devices, including smartphones and tablets. Users can remotely control the on/off status of their lights, dim them, and with some products, change their color temperature.

Controls for tuning dimming and color temperature continue to increase in sensitivity for finer applications. A growing body of evidence shows that the color of light can have an effect on health, mood, and productivity.

And organic LEDs (OLEDs)—in which the light-emitting layer of the lamp is made of an electrolumniescent compount—are another technology making strides in electronic viewing screen applications, and are competing with LED screens for energy efficiency.

Who are the manufacturers?

Following are some of the leading makers of LED fixtures:

Neither this list nor any mention of a specific vendor or product constitutes an endorsement or recommendation by the authors, nor does any content in the Business Energy Advisor constitute an endorsement or recommendation, explicit or otherwise, of the technology-related programs mentioned herein.

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