Any conversation about signage involves LED technology and how prices continue to fall. In addition, LED’s are lasting longer, are performing better and purchasing at a higher volume is translating to lower prices. Today, nearly all new signs are manufactured with LED “light engines.” However, there are still billions of lineal feet of power-hungry neon and fluorescent tubes illuminating brands across the U.S.
A national casual dining restaurant with 250 locations approached us regarding their spend of more than $600,000 last year maintaining out-of-date neon channel letters. Transformers were failing, the neon stopped burning and storms were creating electrical and face repair issues at a greater frequency.
As background, most of their restaurants have letters on three elevations with some only having letters on two sides based on local codes or site-line restrictions.
When we met with the client, we asked two primary questions:
- What was the age and condition of their existing letters? If the channel letter returns and faces were old and in poor condition, investing in these repairs was just throwing bad money at old assets when they could be converting them to the latest lighting technology.
- How much are they spending today so we could develop an asset-replacement plan with a clearly defined ROI?
Since most of their letters were at least ten years old, we were able to work with this client and their $600,000 spend and build out a solution where they could invest those monies in replacing existing neon letters with new LED letters.
Not only did they dramatically reduce their repair costs but they were also able to reduce their electricity costs by nearly 80% because their newly installed LED’s were much more energy efficient than neon.
The payback for replacing neon with LED letters was 2.2 years based on energy and maintenance savings. Many locations were also eligible for energy rebates via local utility companies. The new channel letters look better, illuminate more evenly, are rated for 60,000 hours, and require close to zero maintenance.