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INTEGRA Bespoke Lighting
02-06-2008, 02:25 PM
A freebie to you all: My protocol for calculating a cost benefit analysis for LED vs. Incandescent lamps in a LV Outdoor Lighting System.

Assumptions:
1 - Incandescent source is a 20W load that has a field life of 3000 hours.
2 - LED source is a 6W load that has a field life of 35,000 hours.
3 - I will leave the cost sections blank for you to fill in with your prices for your market.
4 - Be sure to include the 'real cost' of electricity in your market. This includes the electricity, delivery charges, debt retirement charges, surcharges, taxes, etc. (Take your household bill and divide the total number of KWh used into the total amount of the bill)

Per Fixture Cost of Operation:

Halogen Lamp
A: (20W X 35,000 hours) / 1000 = Total KWh consumed X $ per KWh = Cost of Electricity used by Halogen lamp for the purposes of this analysis.

B: 35,000 hrs / 3000 hrs = 11.6 Lamp Changes X $(cost of lamp to client) = Total Lamp Change Cost to client.

C: Man hours labour per lamp change X 11.6 Lamp Changes X Labour Rate = Total Labour Cost to to client.

Add up A+B+C = Total Cost of operation to the client for Halogen Lamp for 35,000 hours of operation.

LED Lamp
A: (6W x 35,000 hours) / 1000 = Total KWh consumed X $ per KWh = Cost of Electricity used by LED lamp for the purposes of this analysis.

B: Initial Cost of LED Lamp.

Add up A+B = Total Cost of operation to the client for LED Lamp for 35,000 hours of operation.

Cost Benefit Calculation.
Subtract the Cost of operation of the LED Lamp from the Cost of operation of the Halogen Lamp. The remainder is the savings the client will realize per fixture if they choose to go with the LED lamp over the lifetime of the product.

In my market the client stands to save over $200 per fixture when they choose the LED lamp.

If the lamps actually last the 50,000 hours that the manufacturer is claiming ( I am de-rating them to be 'safe') then the client will see a savings of $340 per fixture in my market.

This calculation can be easily adapted to your market and other LED technology by changing the variables and costs.

Have a great day.

INTEGRA Bespoke Lighting
02-06-2008, 02:27 PM
Note: This the above case is only taking into account the lamp technology. Unlike Mike Murphy, I am not de-rating or downsizing my transformers, cable, connectors, or wiring techniques for reasons stated previously.

Regards.

Mike M
02-06-2008, 03:08 PM
Note: This the above case is only taking into account the lamp technology. Unlike Mike Murphy, I am not de-rating or downsizing my transformers, cable, connectors, or wiring techniques for reasons stated previously.

Regards.

I'm just saying that's an expensive insurance policy. Not only will you use four times the needed resources, you will also have to dig more trenches. You may as well dig a hole and bury a halogen fixture at each stake, too.

James, you know what would be interesting? I searched online but didn't find it: what are the Japanese using for garden lights? That would be awesome to see, since they are so tight with their limited natural resources and have a knack with electronics.

jhuanger629
02-06-2008, 03:39 PM
A freebie to you all: My protocol for calculating a cost benefit analysis for LED vs. Incandescent lamps in a LV Outdoor Lighting System.


Wow, great post. thank you for the great formula

irrig8r
02-06-2008, 03:40 PM
http://www.researchandmarkets.com/reports/488049/the_2007_2012_outlook_for_outdoor_lighting

Mike M
02-06-2008, 04:19 PM
Greg, believe it or not, I already saw that article. I think it's in Japanese. May as well be!:laugh:

Eden Lights
02-06-2008, 05:16 PM
Thanks for the Formula James, I just plugged in my numbers that I had done in the past and here is what I came up with. Like everything else everyone has a angle and things will be different for everyone.

This is based on 30 fixtures:

Energy @.7 per KW
Halogen $1470
LED $441

Lamps
Halogen $3000
LED $0

Labor will be equal for me, because changing the lamp is just a small amount of the time in our maintenance procedures that leds really don't affect.

Equipment (Based on Kichler List prices)
Halogen $1800
LEDS $4050

Total Cost
Halogen $6270
LEDS $4491

Difference of $1779 or $60 per fixture

Mike M
02-06-2008, 05:32 PM
To be clear, you guys should breakdown an analysis based on comparing the installation price between LED and halogen systems, first. Since that will be the first bill they will pay.

Then, compare long term value in service and longevity of light source, and energy consumption.

Then, compare the entire investment over a set number of years.

That is how I did it, except mine includes differences in transformer and wire, and installation configuration. :)

Keep in mind the additional value of a dimmable, more controlable system.

INTEGRA Bespoke Lighting
02-06-2008, 05:34 PM
Eddie. A couple of things....



My numbers are based on comparing LED MR16 Lamps Vs Halogen Lamps... So I dont have fixture cost differences to deal with, the fixtures are the same no matter what lamp I use. All the sealed LED fixtures from Kichler etc come at a huge premium. I believe they are trying to cash in to be honest.

I really doubt your true cost of electricity is $.07 per KWh. Add in the surcharges, delivery charges, and taxes to get your REAL cost. Here it is .14 per KWh actual.

You really should be adding in your labour costs on lamp changes/maintenance. To suggest that there are none is not accurate. You are paying for it, so add it in. This includes your time on site divided into the number of fixtures maintained, paid breaks, the whole bit. Not accounting for actual costs is a easy mistake to make in any business. Do an audit sometime and you will be amazed. (I budget 10 mins for ground mounted and 20 mins for tree mounted, of which a majority of my fixtures are)

Base your lamp prices on what you charge the client not on your cost.

Do the calculation on a per fixture basis first and then extrapolate to the system, not on a system wide basis.

Regards.

JoeyD
02-06-2008, 05:51 PM
I think california is up to like .20 per KWH. I try not to stare to long at my Electric Bill becuase it seems to grow more and more.

Eden Lights
02-06-2008, 05:53 PM
Thanks for that LED lamp info, because that would make me more comfortable to trial.

I just added in all that other stuff on my bill from last month and it comes to
.7649, so it's a Little higher. Not enough to re-figure.

We do charge for our maintenance contracts, what I am saying is I don't think I would reduce my charges due to not changing the lamps, everything else the same. In our maintenance procedures we don't group re-lamp as a general rule.

Lamp prices are figured at retail or above really.

I am still on the fence, I am not for or against LEDS at this point. I had some customers that asked for them and one paid for the design and wanted figures based on a return on investment in number of years. That's the number he wanted to know.

Eden Lights
02-06-2008, 06:03 PM
James, can't we send you some gifts in the mail? Where does all that money go that you pay for your materials. I have always wondered that about Canada equipment costs? I met a couple of designers at the Landscape Lighting Institute a few years back and we stay in touch and their equipment costs are unbelievable.

INTEGRA Bespoke Lighting
02-06-2008, 06:36 PM
There is no doubt that my materials in Canada cost substantially more then they do in the USA. Traditionally we have had an exchange rate to deal with, not so much lately and I have seen materials costs dropping to compensate for the dollar being at or near par.

Keep in mind that to get materials here from the USA we have to pay for the shipping, they go through customs where a Duty is applied on the value of the goods (federal excise tax), we have to pay a fee (brokerage charge) to have the carrier clear the product through customs, then there is our GST applied to the value of the products, as well as GST on the fees and duties!! All in all it adds between 20 and 30 percent to the cost of the goods. (Keep in mind that the distributor 'absorbs' all these costs... but they then apply their markup on the cost of goods delivered to their door!! So they are actually profiting from all of the handling and taxes too!... Now you see why I despise that extra layer of the supply chain known as "Agents" so much. It is not uncommon here to have a supply chain that looks like this: Manufacturer - Canadian Agent - Local Distributor - Contractor - Client.)

So much for Free Trade! (NAFTA is a bit of a joke for end users, only Manufacturers seem to benefit as they can more easily and cheaply ship components across the borders for assembly etc.)

Don't even get me started on what labour costs are here! You guys in the South would probably roll over and die if I told you what I have to pay per hour for top quality labour.

Mike M
02-06-2008, 08:15 PM
You guys in the South would probably roll over and die if I told you what I have to pay per hour for top quality labour.

It used to be free in the south until the "War of Northern Aggression" as they called it.

Pro-Scapes
02-06-2008, 08:58 PM
wow last time we did it I think it was 9 cents a kwh... i will check it again on this bill perhaps it jumped. Amazing thing is during the month we had no power from Katrina I still got a bill for 147 bucks which I happily paid because Im sure it cost way more than that to get the power back up.

You think your 20 cents a kwh is high. Try living off gas generators for 4 weeks!

Lite4
02-06-2008, 09:07 PM
Mike, In Japan they use candlelight in their gardens.

James, Just checked, I am at .0546 per Kwh.