- 10 Questions to Ask Before A Lighting Upgrade
- 3 Reasons to Recycle Spent Lamps
- 5 Facts FMs Should Know About New Lighting Regulations
- 5 ROI-Generating Winter Facility Improvements
- A Case for Fluorescent Lamp Recycling
- A New Look at Lamp Disposal
- A new Pennsylvania law, in effect as of Jan. 24, 2013, bans e-waste from landfills.
- A Snapshot of Small Facility Lamp Recycling
- Air Cycle at U.S. Green Building Council Heartland Regional Conference
- Are Lighting Retrofits Worth the Money?
- Break a Bulb? EPA Safety Tips Can Keep You and Your Workplace Safe
- Bulb Recycling, Step by Step
- California Law Requires Fluorescent Lamp Recycling
- CFL Bulb Recycling Options Abound
- Cleaning Your Fluorescent Lights
- Colorado Enacts New E-Waste Law
- Congress Delays Incandescent Light Bulb Ban
- Daylighting: Obstacle or Opportunity?
- Efficiency, Avoiding Mistakes Key To Lighting Retrofits
- EPA 2010 Enforcement and Compliance Results
- EPA Reports Record Fine Levels for 2010
- EPA Updates CFL Cleanup and PCB Exposure Guidance
- Fluorescent and HID Lamp Troubleshooting Guide
- Fluorescent Lamp and Controls Myths
- Fluorescent Lamp Recycling: The "Green" Litmus Test
- Fluorescent Lighting Design Tips
- Fluorescent Magnetic T12 Ballast: RIP
- Fluorescent Magnetic T12 Ballast: RIP
- Getting Started On Upgrades To Older Lighting Systems
- Gmail Instructions
- Good Riddance to Old Fluorescent Lamps
- Hazmat Management: A Nine-Step Program
- Illinois Expands E-Waste Recycling Law
- Improve LEED Score and Building Efficiency
- Innovative Fluorescent Bulb Recycling Plan "Brewing" at Teavana
- Introducing VaporShield®
- Is Outsourcing Right For Your Facility?
- Lamp Recycling Made Easy - Universal Waste Rule Compliance
- Lamp Recycling Now Required in Washington
- Lamp Recycling: The Easy Way to Go Green
- LampRecycling.com Articles
- Lighting 101: Key Principles
- Lighting 101: Key Principles
- Lighting Controls: Luxury or Necessity?
- Lighting Upgrade: Energy and Financial Savings
- Macy's Settles with EPA for Lamp Violations
- Making a building go green doesn't have to mean making big structural changes. Here are 5 ways to do it simply.
- Managing Hazardous Materials in E-Waste
- Marriott Hotels Recycle Lamps, Universal Waste With EasyPak
- Massachusetts Fluorescent Lamp Recycling Facts
- Meet Air Cycle at A&WMA Conference in June
- Minimizing Lamp and Ballast Recycling Costs
- New 2010 E-Waste Recycling Laws
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- New State E-Waste Regulations
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- New York Law to Require E-Waste Recycling
- Newsweek has ranked CBRE Group, Inc. the greenest real estate company in its 2011 Green Rankings. The list measures the environmental performance of the 500 largest U.S.-based publicly traded companies.
- Operating Lamps in Winter Conditions
- Planning for Lighting Controls
- Prevent 17 Common Fluorescent Lighting Mistakes
- Proper Lamp Disposal Necessary to Avoid Fines
- Reasons to Consider Recycling Spent Fluorescent Lamps
- Recycling Bulbs and Sustainability for Facility Managers
- Recycling Fluorescent Lamps: It Can Be Affordable and Easy
- Recycling Roundtable: Three FMs Weigh In
- Safety, Savings Achieved With Emergency Lighting System Upgrades
- Strategies to Plan for T12 Lamp Phase-Out
- Successful Recycling: A Three-Step Approach
- Successful Recycling: Achieving Sustainability Goals
- Sustainability: The Great Differentiator
- T12 Lamp Phase-Out: Managing the Change
- The Hidden Benefits of Lamp Recycling
- The Hidden Financial Benefits of Fluorescent Lamp Upgrading
- The Other Environmental Contaminant
- The Road to Fluorescent Lamp Recycling: A 10-Step Guide
- U.S. Launches National Strategy for Electronics Stewardship
- Using Metrics to Optimize Light Quality and Efficiency
- What Are the Best Fluorescent Bulb Disposal Options?
- What Not To Do With Fluorescent Lamps
- What to Do With All Those Old PCs
- When To Turn Off Your Fluorescent Lights
- Why Bulb Recycling Works
- Why Fluorescent Lamp Recycling Still Matters
Are Lighting Retrofits Worth the Money?
A lighting retrofit is the practice of replacing components in the system with counterparts that make it use energy more efficiently. A lighting upgrade is any strategy that reduces the system's energy use. Energy savings are realized over time that can be significant enough to not only pay for the new equipment, but produce a return on the investment.While manufacturers and professional lighting managers have computer software that calculate the economic benefits of an upgrade, it pays to understand the principles.
Understanding Energy Consumption
|Lighting System A||Lighting System B|
|Hours of Operation/Year||3,000||3,000|
|Energy Consumption/Year (Wh)||525,000 Wh||300,000 Wh|
|÷1,000 to get kWh||525 kWh||300 kWh|
|Energy Savings/Year (kWh)||225 kWh|
|Utility Cost/kWh||$ 0.10||$ 0.10|
|Energy Savings/Year ($)||$22.50|
|Number of Fixtures Retrofitted||100||100|
|Total Energy Savings/Year ($)||$2,250.00|
So we save $22.50 per year by replacing the lamps and ballasts in this fixture. For the 100 fixtures, we save $2,250 per year. Note that additional energy savings can be calculated from the air conditioning system, which now works less hard because less heat is produced by the lighting system (see Lighting and HVAC Interactions for more information).Note that we simply could have installed occupancy sensors or some other controls that would reduce the hours of operation, or both strategies. If we installed new controls in this case and reduced the operating hours from 3,000/year to 2,300/year, we would produce an additional $700.00 in energy savings, or a total of $2,950 per year.
Payback and Return on Investment
Now that we know how much money we're going to save while still enjoying comparable performance from the lighting system, it is time to do an economic analysis, which includes determining payback and return on investment (ROI). A full-fledged net present value analysis or life-cycle cost analysis is a major undertaking (best to use software), so for our purposes we will determine simple payback and ROI.
Simple payback is the amount of time in decimal years that will go by before a system upgrade option's energy savings reach the net installation cost (also called the initial cost):
Payback (Years) = Net Installation Cost ($) ÷ Annual Energy Savings ($)
5-Year Cash Flow ($) = 5 Years - Payback (Years) x Annual Energy Savings ($)
Five-year cash flow was chosen based on expectations of the life of the lamps; by factoring in the cost of lamp replacement and other maintenance costs, a 10- or 20-year cash flow can be produced.
Simple return on investment is an internal rate of return, expressed as a percentage, based on the relationship between annual energy savings and the net installation cost:
ROI (%) = [Annual Energy Savings ($) ÷ Net Installation Cost ($)] x 100
Together, they represent a simple and effective first step at determining whether the new equipment would be a good investment for its owner.
In our example, let us suppose that the initial cost of the system (lamps/ballasts only) - - including the cost of the components and labor, waste disposal - - is about $70.00/fixture or $7,000 total (other initial costs may include financing, consulting fees, tax effects and waste disposal).
Simple payback is:
$7,000 ÷ $2,250 = 3.1 Years
Five-year cash flow is:
5 Years - 3.1 x $2,250 = $4,275
($2,250 ÷ $7,000) x 100 = 32%
These results usually must then be compared to the owner's financial policies regarding capital investment to see if the ROI meets the internal "hurdle rate" and therefore enjoy the best chance of a green light by senior management. It is often desirable to examine a number of upgrade options to make the best choice. Note that some utilities offer programs that reward lower energy consumption with a dollar rebate that can make the upgrade even more attractive; also note that an energy service company may finance the upgrade.
See also: Useful formulas
Recycling Spent Lamps During a Retrofit