
With many socalled
energy revolutions, the downside is usually pretty
steep...or we would all be using them. It's hard to
find charging stations for electric vehicles. Solar
energy is relatively more expensive than coalfired
electricity with payback for systems typically measured in
years. These are not entirely deal breakers but they do
make the transition slower. Let's face it...cost is a
major concern in a good economy not to mention the socalled
recovery we're trucking along on in. What about LED
lighting? If we're purely motivated by dollars and
cents, how does this switch to LED lights save us money?
Oh, let us count the ways!
First, let's look at the
the main inputs to this calculation for a pure apples and
apples comparison. We'll leave all the extra
savings...the gravy for later because it doesn't really go
with apples. There are two main costs to evaluate.
The cost of the hardware (primarily the bulbs and to some
extent the fixtures) and then the cost to power this
hardware which is electricity. Just looking at these
two core costs, we're essentially trading a more expensive
hardware up front for much less expensive cost to power that
hardware over time. So what are we looking at in real
terms. On average, a incandescent light (assume 60
watt, PAR38) will cost about $3.99 each. An equivalent
(in lumens or light output) LED light will cost $44.50 each.
As you can see, the cost of the bulb is 10 times more.
Now let's look at the big savings. The wattage for the
equivalent LED bulb is 7 watts. That's right 60 watts
is now 7 watts and that's pretty conservative (you could
probably go lower) but we'll be conservative. Now, in
a given State where the cost per watt/hour is ten cents,
let's assume 10 hours a day for 365 days. The cost to
run the incandescent is roughly $22. The cost to
run the LED light is roughly $2.50. So we're
looking at a difference of almost $20 to power one bulb.
This isn't subjective...there's a certain wattage that
must be paid for going into each bulb. Some State will
actually be more expensive per KWH (Kilowatt Hour) but we'll
stick with ten cents/KWH. So...the straight hardware
and energy cost for the 1st year difference is $40 more for
hardware and $20 less for energy. So what's the big
deal?
That's just year 1.
Just a little hidden secret...LED's last much longer than
incandescents so the replacement costs drop significantly
while the energy savings continues. In fact, the
incandescent lamps will have to be replaced every 241 days
(or 1.51 replacement value) with the above usage. That
means the cost of our bulb is really over $6 (3.99 x 1.51)
and that's each year! What about the LED lights?
We're quite comfortable estimating 5 years of life based on
the above criteria so now we're looking at hardware costs of
$30 for incandescent versus the $44.50 for LED during the
first 5 year window. That's a difference of $14.50
versus the energy savings of $100 (5 years times $20) for a
total savings of approximately $85. Strictly looking
at cost per watt on a hardware and energy basis, we're
saving $85 on a $45 investment. Now imagine 10 lights.
That's $850 on a $450 investment. What about 100
lights or 1000 lights. You're looking at almost 20%
return per year. If only the market could generate
that kind of gain! Of course, if your energy costs are
higher, the numbers above just magnify. Is that it?
No. Definitely not.
We haven't even
discussed the State and Federal rebates and tax incentives
available with a transition to LED's. In certain
areas, the rebates can be substantial..up to 50% of a bulb's
cost. There's also the saved labor from having to
replace the failing incandescent bulbs (remember the every
241 days failure rate above). The switch over can
generally be a capital improvement in terms of write off and
accounting. Incandescents generate a tremendous amount
of heat (which is partially why they're so ineffective in
terms of watts to lumens conversion). That heat
further drives air conditioning costs depending on your
climate not to mention the ballast failures that result from
the heat. We don't includes these in the
calculation but they do translate into real cost savings
when using LED lights. Our goal is provide a true
snapshot of the savings available and we're 100% sure of the
cost of watt to lumens calculation detailed above. It
is what it is. The best approach is to
request a LED light quote for your particular situation to
have us make the same calculation above but with more detail
and obviously more relevant to you. 