Return on investment on LED lighting
Return on investment on LED lighting
Money saving and the greening of the earth are both important goals for many companies. By switching on LED lighting you can achieve both goals. On one hand, there is quick return on investment of LED, while on the other hand, it has long life of 15 years (52 weeks, 10 hours a day).
Calculation of return on investment
The calculation of return on investment time is simple. Simply compare the "new" LED situation with your current situation. As an example, replacing a halogen spot by an LED spot.
- Current situation: halogens spots
| Watts | Number of bulbs | Consumption |
| 100W | 50 |
5000 Watts (5 kW) |
This allows you to calculate how much kWh energy consumes these halogen spots.
kWh = kilowatt x number of operating hours
We have: 5 x 10 kW / day multiplied by the number of days of use whether 250 days per year: (5 x 10 kWh) X 250 = 12500 kWh per year. Multiply that with your utility for a kWh. The national average rate is approximately £ 0.18 per kWh for companies (Eurostat). We have: 12500 kWh per year x 0,18 = £ 2.250 - energy costs per year for 100 halogen spots.
- New situation: LED spots
In the new situation, in which all the halogen bulbs are replaced by LED spotlights, energy consumption drops considerably. LED is 10x more efficient than halogen: 5 Watt LED replaces 50 watts of halogen in conversion. Taking the method of calculation previously detailed, we obtain:
| Watts | X | Number of LED Spots | X | Number of operating hours by day | X |
Number of operating days during the year |
| 5 | 100 | 10 | 250 | |||
| Result :
1250 kWh / year |
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Multiply this result by the average cost of kWh per hour, and we obtain: 1250 kWh per year x £ 0.18 = £ 225 - energy cost per year for LED spots.
- Conclusion :
Switching on LED will save you £ 2.025 - per year on energy costs.
LEDs have a lifespan of up to 50,000 hours. That means there are no replacement costs in the first 15 years. Halogen spots average only 2000 hours. So you replace each lamp every year. This will cost you: £ 2 per lamp x 100 halogen spot = £ 200.00 replacement cost per year. You earn your half-investment in LED because you do not have to replace the lights: 100 LED spots x £ 4 = £ 400.
Demonstration
| Replacement cost per year | Halogens spots | LED spots |
| Year 1 (initial investment) | £ 200.00 |
£ 400.00 |
| Year 2 | £ 200.00 |
£ 0 |
| Year 3 | £ 200.00 |
£ 0 |
| Year 4 | £ 200.00 |
£ 0 |
| Year 5 | £ 200.00 |
£ 0 |
| 5-year total | £ 1000.00 |
£ 400.00 |
So your total savings with LED will be increased each year. The replacement cost for halogen lamps keeps you going on yearly.
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