# Thinking about converting to LED? What is the cost of doing nothing?

We all know LED provides better light output and will save you money. But how much, and how can you save? And when will my investment get paid back? These are all common questions, and the answers vary depending on who you are, where you live and what rebates are available to you. But what if you decide to hold off? What does that cost you? So how can you calculate the savings? First, there are three important components that we ask our customers.
**Hours of use**. How many hours per day, per week, per month are your lights on? The higher the use, the larger the savings. For outdoor lights, at 12 hours a night, 365 days a year, that calculates to 4380 hours. If you never turn your lights off, that works out to 8760 hours per year. Your number will be somewhere between 0 and 8760 hours.**Cost of electricity**. Your utility company charges you at a certain rate, adds in all their fees, for the amount of electricity you use. To calculate your real or actual rate with all fees included, take the total amount of your bill and divide it by the kilowatt hours consumed for that period. This will give you your rate. When we talk to customers, anything above .10 kw/hr is something that starts to make us interested. If you are one of the unlucky ones at .15 hw/h or higher, you need to call us right away.**Size of rebates**. This is something that is directly related to your utility company and it varies from company to company. Some rebates are very generous. For smaller screw in bulbs, rebates are given to Energy Star rated products. For new LED fixtures and retrofit kits that are DLC listed are given rebates (there are exceptions, but this is typically the case). And when it comes to DLC, there is DLC Standard and DLC Premium. DLC Premium is new for higher performance LEd solutions and the thing to remember - BIGGER rebates with DLC Premium.
So now you have these three factors, items 1 and 2 above will be used to calculate your savings. For example, lets take a simple example. Let's say you have (100) 400W Metal Halide Parking Lot Fixtures. They are used 12 hours a night, every night, and your cost of electricity is .12 kw/h.
Your Current Lights
- Each light actually consumes 455W (55W is consumed by the ballast)
- So for each fixture, the watts consumed each day is: 455 X 12 = 5,460
- To convert that to kilowatts, divide by 1000 = 5.46
- For a year, that is 5.46 X 365 = 1992.9 kw used per fixture per year
- Multiply that by your rate 1992.9 X .12 = $239.14 per fixture per year
- If you have 100 fixtures, you are spending $23,914.00 to keep those lit
LED Lights
- We would recommend our 105W retrofit kit, so each LED light only consumes 105W (this is for everything, no extra ballast draw)
- So for each fixture, the watts consumed each day is: 105 X 12 = 1,260
- To convert that to kilowatts, divide by 1000 = 1.26
- For a year, that is 1.26 X 365 = 459.9 kw used per fixture per year
- Multiply that by your rate 459.9 X .12 = $55.18 per fixture per year
- If you have 100 fixtures, you are spending $5,188.00 once you convert over to LED.
- You will save $18,726 per year on these 100 lights.
Pay Back
So how do you calculate payback? Well it's pretty simple. Right now you are paying $23,194.00 to run your lights. Now to calculate the cost of your new LED Lights, we need to determine the total cost reduced by the rebate amounts. Now keep in mind one important thing. Our LED Retrofit kits are some of, if not, the most energy efficient lights available. That means we produce more light consuming less energy than our major competitors. This means we are
eligible for larger rebates as well. So if we were to do the same math above with one of our competitors products, the savings would not be as high because they need to consume 135W to produce less light than we do at 105W. And our rebates are larger, which means your purchase cost is less. So this does really matter to you. You need to pay attention to the efficiency (Lumen output) of LED product because it is not all the same. And making the wrong decision costs you money.So once you have your total cost minus all rebates, divide this number by your savings above ($18,726) and that will give you the number of years it will take you to pay off this investment. How long should that take? In the above scenario, depending on the rebates, you are talking well under 2 years. In some regions, we have seen these numbers as low as 6 months when the lights are used constantly. If you have high use and relatively high energy costs and some one tells you payback is 2+, 3, 4, 5 or 6 years, RUN! That is not the case anymore.
So what is the cost of doing nothing?The cost of doing nothing is the amount you are spending each day waiting to convert over to LED. So let's be honest. LEDs are getting more efficient. Think of them as computers, where if you wait another year, you will get a faster CPU, more memory, faster drives. And its been that way for a long time. We are seeing gains of about 10% better year over year. Cost are coming down as well. But right now, if you could get a pay back based on your savings under a year, and then do it again in another 5 years when efficiency has increased another 50% or so, then you get the benefits of many years of savings. The cost of doing nothing is the all that extra money you spent waiting for an incremental efficiency jump at a slightly better price. Your old antiquated lights are killing you. And I haven't even talked about your high costs to maintain these lights replacing the bulbs and ballasts. In SummarySo we can do this math for you. We can identify the maximum rebates available from your utility company, and calculate your payback and your cost of doing nothing. And if it doesn't make sense, we will tell you. We've helped enough customers to know when the deals make sense for you and when they don't.
One final thoughtWe have many customers who want to convert to LED because maintaining their existing lights (labor, replacement) is becoming a major cost on their annual budget. So it is not always about energy savings. We get that. But if it is, we can help you with YOUR math. |