LED Lighting Retrofit Savings and Payback
The four numbers on every lighting proposal.
Example
You enter
- Fixtures retrofitted 100
- Existing watts/fixture 128
- New watts/fixture 44
- Annual operating hours 4000
- Energy rate ($/kWh; energy-only if you also enter a demand charge) 0.12
- Demand charge ($/kW-month, optional) 12
- Installed cost ($, optional) 8000
You get
- Connected load saved 8.4 kW
- Energy saved 33600 kWh/yr
- Energy savings $4032/yr
- Demand savings $1210/yr
- Total annual savings $5242/yr
- Simple payback 1.52625
Checked against published worked examples from: LumaQuote.
Details, formula, and sources
ScopeThe energy saved from the wattage reduction (fixtures x (W_old - W_new) x hours x rate), the demand-charge reduction if the load runs at the utility peak, the total annual saving, and the simple payback against install cost. The demand term, which a lighting proposal that ignores the demand side omits, often shortens the payback substantially (about a quarter in the example). The burn hours are the actual operating hours; a controls retrofit is a separate credit and an air-conditioned space gains a cooling credit not included here. A simple payback, not a life-cycle analysis.
Formula or tablekw_saved = fixtures x (watts_existing - watts_new) / 1000; kwh_saved = kw_saved x annual_hours; energy_usd = kwh_saved x rate_kwh; demand_usd = kw_saved x demand_per_kw_mo x 12; annual_usd = energy_usd + demand_usd; payback_years = install_cost > 0 ? install_cost / annual_usd : null.
Source and editionThe standard energy-and-demand lighting-retrofit savings method (kWh_saved = fixtures x (W_old - W_new) / 1000 x hours, demand savings at the utility's $/kW-month, simple payback = cost / annual savings), by name; the relations are public.
Free accessThe energy-and-demand savings relations and simple payback are public arithmetic; DOE and utility retrofit worksheets are free.
What governsEstimate. AHJ and licensed professional govern.
API field namesfixtures, watts_existing, watts_new, annual_hours, rate_kwh, demand_per_kw_mo, install_cost, kw_saved, kwh_saved, energy_usd, demand_usd, annual_usd, payback_years
- Energy savings connected-watt reduction times annual burn hours times the energy ratefirst principles
- Demand savings the kW reduction billed at the $/kW-month demand charge over twelve months, only if coincident with the peakutility demand billing
- Payback simple payback = install cost / annual savings; null when no cost is enteredfirst principles