An LED Lighting Retrofit project will provide a significant ROI to your company
This is the fourth blog post in the series to calculate the total Return on Investment (ROI) that a business will generate from an LED lighting retrofit project. Previously, we published the following posts in this series:
- Energy Savings from an LED Lighting Retrofit project – March 2019
- Labor Savings from an LED Lighting Retrofit project – February 2019
- What will you save from an LED Lighting Retrofit Project? – January 2019
This post will address how a lighting retrofit project will save you money on your HVAC costs. The primary assumption behind this part of the overall savings is that the retrofit project is being done in an area that is air conditioned.
So, how would a retrofit project help generate HVAC savings? Incandescent and halogen bulbs from older light fixtures do two things really well, produce light (which is what they are supposed to do) and produce a LOT of heat. Dealing with that extra heat in the summer months is what takes extra energy. The American Society of Heating, Refrigeration and Air Conditioning Engineers (ASHRAE) has established a rule of thumb that it takes 30-35 watts of cooling to offset the heat generated for each 100 watts of lights within a space. We will use 32.5 watts for our computation below.
We will continue our example from the last post in that we are replacing 90 watt PAR 38 bulbs with 14 watt LED PAR 38 bulbs that operate 3,000 hours per year.
These step-by-step instructions will help your business calculate the potential HVAC savings so you can evaluate if it makes sense to include these savings in your overall ROI computation.
Step 1: Gather Data – the following information will be needed to start the calculations:
- Total energy savings per year per light: this is one of the outputs from the March 2019 post – 228 kwh saved per year per light.
- Percent of the year that a business operates its air conditioning. According to a 35 year old study by the U.S. Department of the Navy, Naval Civil Engineering Lab, CR82.028, 1982, Madison Wisconsin air conditioners were operational 38.85% of the year. Granted, this data is old, and given the warmer temperatures over the last few decades, it’s likely that the percentage would be higher, but 38.85% will work for this calculation.
- Electricity Rate: $0.12/kwh is the average rate in Dane county.
Step 2: Energy savings from reduced HVAC:
- KWH saved per light replaced with an efficient LED: 228 kwh
- Times: % of the year that air conditioner is running: 38.85%
- Times: Cooling required per ASHRAE rule: 32.5 watts
- Equals: 28.79 kwh of HVAC savings per year per light
Step 3: Cost savings from reduced HVAC demand:
- HVAC savings from above: 28.79 kwh
- Times: Electricity Rate: $0.12/hwh
- Equals: Savings per light: $3.45/light per year
While a savings of $3.45 per light per year may not seem like much, if you have hundreds, or even thousands of light fixtures that you are replacing during an LED lighting retrofit project, the savings will add up quickly.
If you are considering an LED retrofit project and want to consult with a professional lighting installation company, contact PKK Lighting. We can help you evaluate the opportunity, manage the project, and maintain the lighting system well into the future.