LED lighting comes at a premium to legacy lighting, but comes with great benefits in terms of tremendous energy savings and its ability to be paired with intelligent controls.  Like any rapidly advancing technology, it is reasonable to expect that prices will come down over time.  So should you wait?  No, because the price of the LED lighting solutions would need to come down 75% this year to make up the energy that could have been saved in that time.  Although it is always attractive to save money on purchasing equipment as prices are dropping, the savings available from LED installations dwarf the purchase price savings you may capture in the coming years.

The focus on an LED lighting’s ‘first cost’ is so prevalent because people mistakenly forget to consider the ongoing operating costs.  Every year, the energy bill for a legacy lights is 50% to 200% of the purchase price and the maintenance can tack on another 20%.  Over a 10-year period this means that the upfront cost is only 10% of purchasing and operating a legacy light.  So focusing on the up-front costs is a complete red herring.  Let’s take a look at the annual costs of the lighting alternatives in a 60,000 square foot facility with 100 lamps and $.10/kWh energy costs.

HID/HPS fixtures

Fluorescent fixtures

(w/ occupancy sensors)

Intelligent LED fixtures**

Annual Energy Bill

$40,734

$18,641

$ 2,102**

Annual Maintenance

$ 4,000

$ 4,000

$   0

Total Annual Cost

$44,734

$22,641

$ 2,102

Annual Cost per ft2

75¢

38¢

3.5¢

 

(** Note: these numbers assume integrated intelligence, which provides optimized lighting levels and sensor timeouts, maximizing energy savings over standard occupancy sensors.)

If you stick with your current HID or HPS fixtures and defer the purchase of the LED lighting products in order to gain incremental first cost reductions down the road, you are leaving $42,632/year or $3,553/month on the table.  That is a tremendous amount of lost savings – and those numbers are based on a 60,000 square foot facility.  The savings potential increases with every square foot.

So what about purchase price and how much of a drop it would take to justify the wait and lost savings?  We figure that it only makes sense to wait if there is going to be a 75% reduction in the cost of LED lights.  Meanwhile, the real dollar energy savings are available from Day 1 of installation and the savings – year after year – are likely to go higher as energy costs rise.  So, do you wait for LED chip price drops to decrease your up-front costs?  You can, but only if you like losing money.

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