How to Sell LED and Solar Together: The Combined ROI Case for Commercial Clients

Most electrical contractors pitch LED or solar. Not both. And when they do pitch both, they pitch them separately, at different times, as different conversations with different payback calculations. That is a missed opportunity, and your client usually ends up with a smaller solar system than they should have, or no LED upgrade at all.

The two projects interact. In a way that makes both of them better when you do them together, in the right order.

This is the business case, with real numbers, for positioning a combined LED and solar project as a single conversation.

The thing most solar quotes get wrong

A solar system is sized against the client's existing electricity consumption. Take the annual kWh, account for location and orientation, pick a system size. Standard process.

The problem is that this approach sizes the system for a load profile that is about to get smaller, if you do the LED upgrade first. You are quoting a solar system to cover a load that will not exist in its current form once the LEDs go in.

LED lighting retrofits typically reduce lighting energy consumption by 50 to 70 per cent. In most commercial buildings, lighting represents 20 to 40 per cent of total electricity use. Run the maths and you get a meaningful reduction in total site consumption before the solar system ever gets switched on.

A warehouse running 200,000 kWh per year, with 30 per cent of that on lighting, saves around 36,000 kWh per year from a standard high-bay LED upgrade. That is a load reduction you can size the solar system against, rather than building around consumption that is going to disappear.

Why self-consumption is the only solar metric that matters now

Feed-in tariffs in Australia peaked a few years ago and have been falling since. In 2026, most states sit somewhere in this range:

Every kWh your client's solar panels generate and use on-site saves them the full import rate. Every kWh that gets exported earns them the feed-in tariff. The gap between those two numbers is the argument for LED.

Commercial buildings typically consume electricity throughout business hours. A well-designed LED and solar combination, with the LED reducing daytime loads, means a higher proportion of solar generation is absorbed on-site rather than spilling into the grid at 6c/kWh. The LED is effectively improving the economics of the solar, even after it is installed.

Building the combined business case

Here is a worked example using realistic numbers for a mid-sized commercial warehouse in NSW.

The site

Warehouse and distribution facility, 3,000 square metres. Currently running 60 x 400W metal halide high bays and T8 fluorescent office and amenities lighting. Operating 10 hours per day, 5 days per week. Annual electricity consumption: 185,000 kWh at an average tariff of 35c/kWh.

LED upgrade first

Replace metal halides with 150W LED high bays, T8s with direct-wire LEDs. Estimated project cost with installation: $58,000. Less NSW ESS certificates (estimated $6,200 based on current IPART pricing): net capital $51,800.

Lighting energy before: 67,000 kWh per year. After LED: 24,000 kWh. Saving: 43,000 kWh per year, worth $15,050 at 35c/kWh. Payback on the LED project alone: 3.4 years.

Solar sized for the reduced load

Total annual consumption after LED: 142,000 kWh. The site now needs a 50 kW solar system rather than the 65 kW system that would have been quoted before the LED upgrade. Installed cost difference at current commercial solar pricing: roughly $18,000 to $22,000 less capital.

The 50 kW system generates approximately 67,000 kWh per year in Sydney. With the lower post-LED load profile, estimated self-consumption rate improves from around 60 per cent to 75 per cent. That matters a lot: the 15 per cent improvement in self-consumption on 67,000 kWh is 10,000 kWh that earns 35c instead of 7c. An extra $2,800 per year from the same panels, for free, because the load underneath them is now a better fit.

Combined project summary

The combined project, when presented correctly, has a shorter payback than solar alone and a 10-year return that is substantially better than the two projects added together. That is because the LED work improves the solar economics, and the solar carries the LED payback further in the client's mind when they see the combined number.

The incentive stack

This is where the combined pitch gets genuinely interesting for a client who is watching the budget.

LED upgrades and solar installations draw from different incentive pools. They do not compete for the same funds. A combined project collects both sets of certificates and can access both tax treatments simultaneously.

LED side

Depending on state, LED commercial retrofits access NSW ESS certificates, Victorian VEU (VEEC) credits, or SA REPS incentives. These reduce the capital cost of the LED work before the solar even comes into the picture. For larger facilities, the ESS and VEU numbers are significant. A warehouse with 60 high bays can attract $5,000 to $15,000 in certificates depending on state and scheme pricing at the time of installation.

Solar side

Commercial solar systems under 100 kW still attract Small-scale Technology Certificates (STCs), which are built into most installer quotes as an upfront discount. For a 50 kW system, this typically represents $15,000 to $25,000 off the price. Victoria also runs the Solar Homes program for eligible small businesses.

Tax treatment

For small businesses with turnover under $10 million, both the LED and the solar installation qualify for the instant asset write-off, provided the per-asset cost is under the current threshold. At 25 per cent company tax, a $107,000 combined investment returns $26,750 in Year 1 tax benefit. That reduces the effective capital outlay to $80,250 and brings the after-tax payback under 2.5 years.

For larger businesses, both assets qualify for diminishing value depreciation at 40 per cent in the first year. Different numbers, but the tax treatment still materially improves the combined case.

How to structure the combined pitch

The problem with pitching these as two separate quotes is that clients evaluate them separately. LED gets compared to doing nothing. Solar gets compared to doing nothing. Neither gets properly compared to doing both together, which is where the actual value sits.

A combined pitch changes the conversation from "should we do LED" and separately "should we do solar" to "here is a single energy upgrade project with this total cost and this combined return." The client makes one decision, not two.

Step 1: Run the LED numbers first

Before you quote solar, audit the lighting. Lumen output, wattage, hours of operation, number of fittings. Run the LED calculation. This gives you the new load profile: total site consumption after LED, daytime demand curve, and the payback on the LED component alone. The LED Savings Calculator at the top of this site handles the calculation, including real Australian state tariffs and applicable rebate schemes. Print the PDF report. It becomes part of the client leave-behind.

Step 2: Size the solar against the post-LED load

Take the post-LED annual consumption and the client's daytime load profile. Size the solar system against the load that will actually exist after the LED work is done, not the load that exists today. The system will be smaller, which means less capital, and the self-consumption rate will be higher, which means better economics. Quote it this way from the start.

Step 3: Present a single combined ROI

One project. One total cost. One payback calculation. One 10-year return. Bring in the rebates and tax treatment so the client sees the effective net cost. If the payback on the combined project comes out under three years, which it often does in SA and parts of NSW, that is the headline number. Three-year payback on a 25-year asset life is a very good argument.

Step 4: Stage the work sensibly

LED first, solar three to six months later. There are two reasons for this. One, the LED work reduces the load profile before you commission the solar, meaning the solar system is correctly sized from day one. Two, most clients find it easier to approve two stages rather than one large upfront spend. The LED project pays back quickly and the client has real data on their new consumption before the solar goes in. If the LED payback is already running, the solar commitment feels lower risk.

The questions clients ask

"Should we add batteries?"

Not the topic of this article, and honestly not the first conversation. Get LED and solar running and generating return first. Batteries add complexity and capital cost and the economics are more site-specific. After 12 months of solar data on a post-LED load profile, you have a solid basis for a storage conversation. Do not let battery discussion derail a LED and solar project that is already financially clear.

"What if we do solar first and LED later?"

Then you have sized the solar system for a larger load and the LED upgrade, when it comes, will reduce daytime consumption. More solar generation will be exported at the low FiT rate rather than self-consumed. The solar economics get slightly worse when the LED goes in, rather than better. It is not a disaster. It is just not optimal.

"We already have solar."

Still worth the LED conversation. The LED upgrade reduces daytime consumption, meaning the existing solar covers a higher proportion of the site's load. That spill to the grid that was getting 6c/kWh now stays on-site and saves 35c/kWh. The LED ROI is improved by the existing solar, even if the solar does not change at all.

State-by-state notes for the combined pitch

New South Wales

ESS certificates for LED upgrades are well-established and the process is familiar to most accredited installers. Solar STCs apply Australia-wide. NSW has some of the better grid tariffs for self-consumption arguments. The combined pitch works well here with a 2.5 to 3.5 year payback as the headline depending on facility size and tariff.

Victoria

VEU certificates for lighting are the highest-value LED incentive in the country for some product categories. Feed-in tariffs have dropped substantially. The self-consumption argument is strong, particularly for businesses on time-of-use tariffs paying peak rates during solar generation hours. Combined payback figures in VIC are often in the 2 to 3 year range for larger commercial sites.

South Australia

The highest grid electricity prices in the country. REPS for LED. STCs for solar. The maths on a combined project in SA is as good as anywhere in Australia. The payback calculation practically does itself. A warehouse in Adelaide with 400W metal halides will often see LED payback under 18 months before solar is even in the picture. Add solar and the combined energy bill reduction is dramatic.

Queensland

No state-based LED rebate scheme currently. STCs still apply for solar. Good solar resource means strong generation numbers. The combined pitch here is heavier on the solar side and still works for large consumption commercial facilities with long operating hours.

Western Australia

Synergy's 2.25c/kWh buyback rate makes solar export essentially worthless. Self-consumption is the only viable solar metric. LED first is not optional here, it is mandatory for the solar case to make sense. Any commercial solar quote in WA that does not include an LED upgrade assessment alongside it is incomplete. The combined pitch is arguably at its strongest in WA precisely because of the terrible FiT.

Using the LED Savings Calculator in your client pitch

The calculator on this site is designed for exactly this conversation. Enter the current fitting type, wattage, number of fittings, operating hours and state. It calculates annual energy saving, dollar saving at real state tariffs, and payback period including NSW ESS, VEU and SA REPS rebate estimates.

Print the PDF report. The report includes your branding if you have set up a contractor account. It shows the client the LED numbers in a clean, professional format they can take to a finance decision-maker. Then you layer the solar proposal on top of that documented baseline. Combined, you have a package that shows where the money is going and when it comes back.