Switching to LED? A “No Brainer”? Part 1

** originally posted on Linkedin Feb 8/17

LED technology has come a long way and if you are purchasing a general purpose light for your home or business an LED light is probably the best option.  Most bulb styles are available in LED and they are quite reliable compared to incandescent and fluorescent bulbs.

If you have a business is it worth swapping all of your fixtures to LED? Certainly if you are building a new commercial space or retrofitting and existing space installing LED usually is the best option. Commercial fixtures have consisted mainly of fluorescent tube fixtures (T8, T5) in interior office spaces and work areas (eg. small garage or storage areas), high intensity discharge (HID) fixtures installed on exterior building areas and larger warehouses with high ceilings. Most of these fixtures are now available in an LED version. Even other types of fixtures including sconce lighting, track lighting and other accent type lighting now have LED versions.

Again the question, should you swap all of these fixtures to LED? That is tough to answer. Yes you will save money on energy usage with the lower wattage rating of LED fixtures but will you save money if you take into account the cost of the new fixture and the cost of installation? Maybe, maybe not. It really is situational.

Here is a simple example with one of our customers where it made good sense to make the switch to LED. The customer who is located in the Moncton Caledonia industrial park has 100W and 250W wall packs (Metal Halide, HID) located on the exterior of the building. Two of the 100W fixtures were not working and they asked me to change the lamps. Changing the lamp solved the problem in one of the fixtures but not the second as the ballast also needed to be replaced. The cost of a new ballast is approximately $75 plus $28 for the lamp so including installation the total would come to about $195. We priced a new LED wall pack (EEL IP54 *) for the customer to which came to $210 and with installation $300.

So for an extra $105.00 they got a brand new fixture rated at 60 watts compared to 100 watts of the original HID fixture. The energy savings amounts to about $16/year which means the payback is about 6.5 years just from the energy savings (difference in cost of ballast/lamp replacement or new LED – $105/$16 per year energy savings). That is not the whole story, however. You must also consider the cost of ownership. Assuming the ballast should last about 5 years, a new lamp will probably be needed for the old HID fixture in the next 3 years. They will save an additional $88.00 (approximate cost of new lamp plus 1 hour installation) over the first five years. Here is the analysis:

Option 1 – Keep old fixture and replace ballast and lamp

Cost of ballast/lamp replacement with installation: $205

Approximate energy cost over per year**: 100Wx11 hrs/day x 365 @ $0.10 per kWH = $40.15/year

Energy Cost over 5 years: $40.15 x 5 = $200.75

Cost of 2nd lamp replacement over 1st 5 years: $88.00

Total Cost over 5 Years: $493.75

Option 2 – New EEL IP54 60W LED Wall Pack

Cost of New Fixture with installation: $300.00

Approximate energy cost per year**: 60Wx11 hrs/day x 365 @ $0.10 per kWH = $24.09

Energy Cost over 5 years: $28.47 x 5 = $120.45

Total Cost over 5 Years: $420.45

Savings over 5 Years with LED – $493.75 – $420.45 = $73.30

In the end they will save about $75.00 over the first five years even though it costs a little more up front to put in the new LED fixture. The actual payback period is about 2.5 years if you consider a new lamp will be required for the old fixture within that time span (about 10000 hour lifespan of metal halide lamps depending on which source you refer to). If you look over a 10 year period where 3 new lamps will be required (and probably a new ballast) the savings look really good. The new LED fixture which should last for more than ten years (50,000 hours).

My customer did go ahead with the new fixture even without looking at this extensive analysis. Lower cost of ownership of LED and the fact that LED fixtures maintain their luminosity (light intensity) over much longer periods as compared to HID can decrease in luminosity even after 1 year were good enough reasons to make the switch.

Should you go ahead and change out all of your fixtures? In this example the customer needed to do something because their light was not working and it made good sense to switch to the new LED fixture. What if you have fixtures that are working? Should you wait to they break or just change them now? Really, it depends on your time horizon and if you have cash to put out now on this type of investment. If a fixture is currently working and might continue for a few years your payback time period will be longer. In the next blog on this topic I will explore some examples.


* EEL LED Fixture Information:


** 100Wx11 hrs/day x 365 @ $0.10 per kWH

W – wattage of lamp/fixture

11 hours day darkness (http://aa.usno.navy.mil/data/docs/Dur_OneYear.php

365 days per year (on photocell)

10 cents average kilowatt hour (kWH) rate from NB Power (this amount can vary by customer)