SAVING MONEY WITH ENERGY EFFICIENT LIGHTING
PATRICK J. CLOUDEN
CEO CONSUMER ENERGY SOLUTIONS
The US government has abolished the old incandescent bulb and is pushing consumers to maximize energy efficiency
by promoting the use of LED lighting over fluorescent.
LED lighting has several key advantages over fluorescent. LED offers a major reduction in energy usage, better light
quality, significantly longer life, reduced maintenance expense, produces less heat, eliminates flicker, superior
lifetime performance and the bulbs are recyclable and safer as their design replaces glass with plastic. Fluorescent
contain the hazardous material mercury gas, are not recyclable, require hazardous disposal and require more
frequent bulb and ballast replacement, adding to material and labor costs.
OVERHEAD TUBE LIGHTS
There exists a confusing array of LED lighting products available for the overhead tube lighting market which can
make the financial advantages of LED unclear.
The ideal product for an LED upgrade has the following attributes:
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a rated power consumption of 18 watts for
maximum energy savings
a rated lifespan of 50,000 hours for maximum
bulb replacement savings
operates with no external ballast for
maximum maintenance savings
utilizes the existing fixture and connecters
for minimum installation cost.
Using an LED tube with these qualities creates an LED
upgrade project providing for substantial utility bill,
replacement and maintenance savings with a minimized
initial investment which more than pays for itself.
The utility savings of upgrading to LED is based on the
reduction in wattage. The most common four foot
fluorescent tube is rated at 32 watts and with the most
common ballast operates at 33 watts. The best replacement
LED tube is rated at 18 watts, providing for a 15 watt
reduction or a greater than 40% savings in energy use per
bulb.
The utility savings of an LED upgrade depends on the number of tubes replaced and the local utility rate.
The annual utility savings for a project replacing only 500 fluorescent tubes in a medium sized warehouse
or office building is shown below:
Utility Rate
$0.120 per kWh
$0.100 per kWh
$0.080 per kWh
Warehouse1
Annual Savings3
$7,884
$6,570
$5,256
Office Building2
Annual Savings
$2,475
$2,063
$1,650
1 – Warehouse scenario defines a 24 hours/day, 7 days/week operation (8,760 annual hours).
2 – Office Building scenario defines a 7 am to 6 pm, 5 days/week operation (2,750 annual hours).
3 – Annual Savings calculated as kilowatt reduction (0.014 kW) times the operational hours (8,760 or 2,750 hours) times the utility rate (as
shown in the table).
The maximum maintenance savings is realized by using a replacement LED tube requiring no ballast and is
rated at 50,000 hours, which is often more than twice the life of both the old fluorescent tubes and
ballasts. This avoids at least two complete replacements of the tubes and ballasts, plus the disposal costs
for both. Using conservative cost estimates4, this would save more than $35,415 over the life of the 500
LED tubes. Installation can typically be done with existing maintenance personnel as the ballast only needs
to be bypassed, avoiding additional electrician labor costs.
4 – Assuming $2 replacement and $1 disposal cost for fluorescent tubes; $30 replacement, $45 professional installation labor and $1 disposal cost
for ballasts (3 tubes per fixture) over 2.5 replacement cycles.
It is the total lifetime utility and maintenance savings that drives the conversion to LED. The total lifetime
savings of the 500 replaced tubes is shown below:
Utility Rate
$0.120 per kWh
$0.100 per kWh
$0.080 per kWh
Lifetime
Utility Savings5
$45,000
$37,500
$30,000
Lifetime
Maint. Savings6
$35,415
$35,415
$35,415
Total
Lifetime Savings7
$80,417
$72,917
$65,417
5 – Lifetime Utility Savings calculated as annual warehouse savings times the life of LED tubes in years (5.7).
6 – Lifetime Maintenance Savings calculated as shown #4 above.
7 – Total Lifetime Savings calculated as Lifetime Utility Savings plus Lifetime Maintenance Savings.
The best cost for a quality 18 watt LED tube rated at 50,000 hours and requiring no ballast is around
$20.00, defining an initial investment of $10,000 for the 500 tubes. This represents a total positive cash
flow of around $60,000 over the life of the LED tubes, with a payback of less than 12 months in the
warehouse setting and around 36 months in the office building setting. The combined utility and
maintenance savings more than covers the monthly payment in a lease-purchase scenario. This creates a
net positive cash flow project, where the exact amount depends upon the operational hours of the lights
and the lease-financing terms.
Additional applications of this LED upgrade in a 24 hour, 7 days per week scenario would include
distribution centers, hospitals, manufacturing facilities, hotels and certain outdoor lighting & parking
ramps. Additional applications in a 10-12 hour, 5 days per week scenario would include retail stores,
schools, show rooms and restaurants.
For more information contact Scott Salo at ssalo@cesstaff.com.