In part 1 of this topic (http://wattsource.ca/should-you-go-led) we looked at the justification for upgrading to a new LED fixture instead of repairing the old metal halide HID fixture (new ballast and lamp). In that scenario it was a “no brainer”. What about replacing all of their old fixtures with new LED technology before the existing ones break? Is that a no brainer? Let’s take a look.
Certainly the customer can wait until the old fixtures go “kaput” and do the upgrade then. We have already made a good case to do this. Should they instead upgrade all of the fixtures now in one shot instead of waiting for the old fixtures to go dark before the upgrade is made?
Since Part 1 was written I found a new LED fixture at a lower cost and a lower wattage rating for the 100W equivalent LED fixture. So let’s redo the calculations for the 100W fixture and take a look at the numbers for the 250W fixture.
Cost of Existing 250W MH fixture Over 5 Years
Approximate energy cost over per year: 250Wx11 hrs/day x 365 @ $0.10 per kWH = $100.38/year
Energy Cost over 5 years: $100.38 x 5 = $501.90
Cost of lamp replacement over 1st 5 years: $35.00 *
Total Cost over 5 Years: $536.90
* cost of lamp plus 15 minutes labour (does not take into account travel time to job)
Cost of New LED Wall Pack Over 5 Years
Cost of New Fixture with installation: $294.00*
Approximate energy cost per year: 37W x 11 hrs/day x 365 @ $0.10 per kWH = $14.86
Energy Cost over 5 years: $14.86 x 5 = $74.28
Total Cost over 5 Years: $368.28
* installation cost based on fixture being accessible by standard extension ladder (does not include travel time to job)
Savings/ROI Analysis for 250W MH Replacement with LED Equivalent:
Savings per year in energy costs: 100.38 – 14.86 = $85.52
Payback period of new fixture from energy savings: $294/85.52 = 3.44 years
Savings over 5 Years: 536.90 – 368.28 = $168.62
ROI over 5 Years: 168.62/294.00 = 57.4%
So, over a five year period by installing the new LED fixture the customer will get a 57% ROI which is about 11.4% a year. If you can find a broker who will consistently get you 11% a year in this market you should hire her and plan to retire early.
Another thing to consider is installing a LED fixture that is equivalent to a 400W MH fixture (79W LED) to replace the existing fixture which will give more light in the area in question. You will only save about $36.00 over 5 years replacing the 250W MH fixture but you will now have significantly more light in the area in question with the new 79W LED fixture. If you replace a 400W MH fixture with a new LED fixture the numbers look really good (see analysis at end of article).
Now let’s see the case for the 100W MH fixture. Here is the simplified analysis:
100 W MH Replacement:
Cost 100 MH over 5 Years*: $245.75
Cost LED Equivalent (30W) over 5 Years**: $342.22
Savings over 5 Years with New Fixture: -$96.47
* includes energy use and one lamp change over 5 years
** includes energy over 5 years and new LED fixture plus installation
As you can see it will cost money to make the switch with the 100W fixture. For the 100W fixture you are probably better off to wait until the ballast or bulb fails to make the switch as discussed in the previous article. Over 10 years there will be savings with LED but most likely the existing fixtures will fail within five years and need to be replaced anyway.
Conclusion
If your company has the cash to invest in energy savings LED lighting is a great place to spend. In this example the numbers looked good for the 250W MH fixture replacement but not so good for the 100W fixtures. My recommendation to this customer would be to wait until the 100W fixtures break but spend the money now to replace the 250W MH fixtures if they have the cash.
Another to consider is luminosity. A metal halide fixture will start losing luminosity (ie. brightness) as soon as you install it. After 1.5 years you might have lost 25% of its luminosity and even more in the 3rd year. LED will maintain its original luminosity over its life time. I did a job a few years ago in a warehouse and replaced all of the ballasts because they were just not bright enough which was affecting productivity and creating potential safety hazards. The company is now looking at replacing all the fixtures with LED.
Is anything really a “no brainer”? When it comes to spending money a business really should do a careful analysis before making any investment.
Attila Fust
Wattsource Electrical
400 W MH Replacement:
Cost 400 MH over 5 Years*: $843.00
Cost LED Equivalent (79W) over 5 Years**: $500.59
Savings over 5 Years with New Fixture: $342.41
ROI over 5 Years: approx 100%
* includes energy use and one lamp change over 5 years
** includes energy over 5 years and new LED fixture plus installation