If you’re managing a warehouse with older metal halide or fluorescent lighting, you’re probably burning through more money than you need to. Let’s break down the real numbers behind LED upgrades in 2026.

The Starting Point: What You’re Spending Now

A typical 5,000 square metre warehouse with 100 metal halide fixtures (400W each) operates around 12 hours daily. That’s roughly 175,200 kWh per year. At current commercial electricity rates averaging $0.28 per kWh in metropolitan Australia, you’re looking at $49,056 annually just for lighting.

Add maintenance costs—ballast replacements, lamp changes, lift hire—and you’re easily pushing $55,000 to $60,000 per year.

The LED Alternative: Actual Costs

Modern LED high bay fixtures (150W) deliver comparable or better illumination. Here’s what 100 quality commercial-grade LED fixtures will cost:

• Fixtures: $450-$650 per unit = $45,000-$65,000
• Installation: $150-$250 per fixture = $15,000-$25,000
• Controls/sensors (optional but recommended): $8,000-$15,000
• Total project cost: $68,000-$105,000

Yes, that’s a significant upfront investment. But let’s talk about what happens next.

The Real ROI Timeline

Your new LED system will consume approximately 65,700 kWh annually. That’s a 62.5% reduction in energy use, saving $30,618 per year on electricity alone.

Maintenance practically disappears. LED fixtures rated for 50,000+ hours last 11+ years at 12 hours daily operation. No more quarterly lamp changes or ballast failures. Conservative estimate: $8,000-$10,000 annual savings in maintenance.

Combined annual savings: $38,000-$40,000

Payback period: 1.7 to 2.7 years depending on your specific setup and whether you claim available rebates.

Don’t Miss These Rebate Programs

The Victorian Energy Upgrades program offers certificates worth $15-$35 per fixture for qualifying LED upgrades. That’s potentially $1,500-$3,500 off your project.

NSW’s Energy Savings Scheme provides similar incentives through accredited providers. Queensland and South Australia have their own programs—check with your state’s energy department.

Some electricity retailers offer additional business rebates. AGL, Origin, and EnergyAustralia all run periodic commercial lighting programs. These aren’t always advertised, so ask directly.

Common Mistakes That Kill ROI

Buying on price alone. Those $200 LED high bays from questionable suppliers? They’ll fail within 18-24 months. Stick with established brands offering genuine 5-year warranties. Spending an extra $100 per fixture upfront saves thousands in premature replacements.

Ignoring light quality. Colour rendering index (CRI) matters in warehouses. Workers need to read labels, distinguish colours on safety signage, and operate forklifts safely. Don’t go below CRI 80. The productivity gains from better visibility often outweigh the modest cost difference.

Skipping controls. Motion sensors and daylight harvesting can push your energy savings from 62% to 75-80%. For an extra $10,000-$15,000, you’ll save an additional $5,000-$7,000 annually. Controls also extend fixture life since lights aren’t running unnecessarily.

DIY installation in high-bay applications. Working at 8-12 metres height requires proper equipment, insurance, and safety procedures. One workplace incident wipes out years of energy savings. Use licensed commercial electricians familiar with warehouse environments.

When It Makes Sense to Wait

If your warehouse operates less than 6 hours daily, payback stretches to 3-5 years. Still worthwhile, but less urgent.

Planning to relocate within two years? The fixtures are removable and retain value, but you won’t capture the full ROI.

Awaiting major renovations? Coordinate lighting upgrades with other electrical work to reduce total installation costs.

The 2026 Calculation Worksheet

Here’s your quick assessment framework:

1. Current annual lighting cost: (Total wattage ÷ 1000) × operating hours × 365 × $0.28
2. LED annual cost: (New wattage ÷ 1000) × operating hours × 365 × $0.28
3. Annual savings: Current cost - LED cost + maintenance savings
4. Project cost: Fixtures + installation + controls - rebates
5. Simple payback: Project cost ÷ annual savings

If your payback is under three years and you’re planning to occupy the space for five+ years, the numbers work. Period.

Beyond the Spreadsheet

Better lighting improves safety. Warehouse incident rates drop measurably when visibility increases. Worker productivity typically improves 5-8% under quality LED lighting compared to deteriorating metal halide systems.

Your insurance provider might offer premium reductions for improved lighting. Some do, some don’t—worth asking.

And there’s the sustainability angle. If you report carbon emissions or pursue green building certifications, a 62% lighting energy reduction makes a visible impact.

Getting Started

Request quotes from three commercial electrical contractors specializing in warehouse LED retrofits. Insist on photometric analysis—they should model your specific space and show predicted lux levels before you commit.

Ask about staged installation if cash flow is tight. Many warehouses upgrade one section at a time, funding each phase from previous savings.

The numbers don’t lie. For most Australian warehouses operating 10+ hours daily, LED upgrades pay for themselves in under three years while delivering better light, lower maintenance, and improved safety. That’s not a sales pitch—it’s just arithmetic.