Three Sample Scenario & Savings Reports

To provide a real-life scenario on how LED retrofits can be cost-effective, the following reports
illustrate the impact of a changeover for a business property running its operations 24/7. The
reports are prepared at three different kWh Costs to reflect the range of expected electricity cost
across the US:
$0.12/kWh – Lower Level
$0.16/kWh – Middle Level
$0.20/kWh – Higher Level (Typically New England, California, Hawaii and Alaska)
Note: The higher the cost of electricity, the faster the payback on the LED
retrofit.

Below are explanations of terms used in the reports.

Current Lighting Electricity Cost:

Defined as how much an owner or operator is spending to light a building of interest.
Calculated as the product of how many hours per year the current lights are running, the
kilowatt-hour rate the facility pays for electricity, and the wattage of the existing light
bulbs. This information is gathered from either the lighting audit or a lighting schedule.
The Lifetime cost is defined as the cost to run the current system for the lifespan of a
standard LED bulb. A 3% annual increase in electricity rates is applied to the figure to
account for gradual deregulation.
Projected Lighting Electricity Cost (LED):
Defined as how much a facility could be spending to light a building of interest, if it made
the clean energy switch to LED lights. This statistic is based on the current usage,
kilowatt-hour (kwh) rate and wattage consumption of potential LED replacements. Most
solutions range between 60%-90% in energy reduction.
Electricity Cost Savings with LEDs:
The difference between current and projected lighting electricity costs.
Bulb Replacement Costs:
This figure uses the commercial average cost per bulb as well as average bulb lifetime
of 15,000 hours. Over the 80,000 hour life of an LED bulb, you would have to replace the
average bulb approximately 5 times. Annual replacement cost is dependent on usage.
Maintenance Labor Cost:
Although commercial properties can spend up to $2 per square foot on labor to replace
light bulbs, LED Saving Solutions uses a more modest average of $.05 per square foot
in Savings Report estimates.
Reduced Air Conditioning Load:
According to a study done by the Lawrence Berkeley National Laboratory, a net HVAC
savings of $.03 is seen for every $1 saved on electricity. For large commercial buildings,
the savings is amplified at $0.16 for every $1. The figure represents the difference
between the decreased cooling load and the increased heating load.
Total Additional Operating Savings:
The sum of the bulb replacement costs, the maintenance labor costs, and the Reduced
Air Conditioning load.
Cost of LED bulbs:
This is for the material only. Pricing is dependent on volume.
Financing Options:
Loans are available for terms between 2 and 5 years. Rate is dependent on credit, but
averages 6% to 10% for most commercial clients.
Financing Cost:
Represents the monthly payment calculated as the total cost of the job amortized over
the term of the loan.
Savings with LEDs:
Calculated as the Total Savings with LEDs (includes additional operating savings) on a
monthly basis
Net Cash Flow:
The difference between the monthly loan payment and the monthly savings with LEDs.
EPAct Federal Tax Deduction:
A deduction of $.60 per square foot is allowed if the lighting power density (watts per
square foot) is decreased by 40% or more and 50% or more for warehouses. The cash
value of this deduction is displayed in this figure and a 30% tax bracket is assumed.
Property Value Increase:
Mainly for commercial office buildings, this metric reflects the increased valuation of the
building as a result of a decrease in operating cost. A cap rate of 10% is assumed.
EcoAdvantage:
CO2 Emissions reduction: On average, for every dollar saved on electricity, 13 lbs of
CO2 is abated.
Daily Cost of Waiting:
Potential savings with LEDs on a daily basis.
Monthly Cost of Waiting:
Potential savings with LEDs on a monthly basis.