Author: Robert Schindler, P.E., Process Plus Electrical Engineer &
Best Practice Lead
December 9, 2013

The renovation/retrofit case is a bit more complicated because there are more considerations: Is my existing lighting doing the job? Can I get replacement parts, and for how long? How difficult is it to replace lamps? Is my energy costing me more than it should? Once these questions are answered, there are follow-up considerations: What will the cost be to replace the lighting? Do I need to make additional changes beyond a straight replacement? What is my payback period? And, possibly the most important consideration…What are my priorities? You may be making decisions based on a commitment to reducing energy consumption or based of decisions that make economic sense, or somewhere in between.

I have found that the economic case is the hardest one to make because there are more factors: the ‘first cost’ or the cost of the luminaire when first installed; the value of energy savings over time; and the cost of maintaining the lighting over time. Often times it can be demonstrated that the maintenance cost over time is much less for LED than for other light sources. This is due mainly to the cost of replacement lamps, as well as the labor to complete the replacement; which is higher for conventional lighting. For replacement lighting, first costs can often be mitigated or even flipped by rebate programs offered by local utilities and other agencies. For example, Duke Energy, in Cincinnati, offers a rebate program that will pay $80 cash to customers who replace an HID exterior luminaire with an LED luminaire. For larger scale projects, Duke Energy will work with the customer to customize a rebate program. In these two instances, the payback period could be quite reasonable.

Energy cost savings is the economic consideration that is least likely to be a net gain for LED lighting, except with larger installations. This factor is largely dependent on how much one pays for electricity, both in usage and in demand. A facility paying $0.06 per kWh has a lot farther to go to realize a significant payback than a facility paying $0.20 per kWh. On the demand side, large facilities may be able to make a dent in their demand charges; smaller facilities may not see a change. Of course, these are all approximations. Every facility is different and each should be studied individually to ensure that any possible savings are taken into account correctly and applied to the overall payback analysis.

In summary, and from experience, I suggest that for new construction or major renovations, LED luminaires should be the first consideration unless specific conditions of the project require a different light source. For smaller renovations or retrofits, the economic aspects of the project may require closer scrutiny to ensure that the customer is pleased with the selected lighting and can live with it for the next thirty years. If in doubt, feel free to call us…we can help work through any questions you may have.