How to Calculate your Maintenance Savings Step by Step
When businesses are looking at retrofitting/upgrading to from LED they often focus on the savings from the reduction of watts per bulb/fixture and overlook a huge portion of the savings – maintenance.
As a side note, LED lights do not require a ballast like traditional lighting does so any costs associated with replacing ballasts is completely gone. But since ballasts typically need to be replaced every 12-15 years, we will not be including it in our example.
In order to figure out what your potential savings are you need to do the following:
Step 1: Collect the Following Information
What is the rated lifespan for the old light? In this example, the halogen lamp used has an estimated life of 1,500 hours.
Cost to replace old lights. The average cost to replace a halogen lamp is $4.50.
Total hours running. In this example the lights are running 2,600 hours a year (50 hours a week).
Step 2: Calculate How Often the Old Lights Need to be Replaced
The rate in which lights burn out vary so you will need to check and see what the average rated life for your bulbs are. We’re using 1,500 rated life for this example.
To calculate how much you are spending per year on replacements use the following equation:
annual hours of operation ÷ rated life = how many times you replace them a year
2,600 ÷ 1,500 = 1.73
Step 3: Calculate the Replacement Cost Per Old Light
This one is quite simple, we just need to multiply the # of times per year you replace your lights by the cost per light.
1.73 x $4.50 = $7.79 per bulb annually.
Step 4: Calculate Labor Costs for Old Lights
Every business is different and depending on the type of light you may need to contact a specialist. However, for this example we will be using averages to keep it simple.
On average it takes about 6 minutes per lamp and the maintenance employee would be making $20.00 an hour. Making the equation:
6 ÷ 60 x $20 = $2 per light
Lastly we take the # of times the halogen lamp is replaced per year and multiply it by the $2:
$2 x 1.73 = $3.46 per light per year.
Step 5: Calculate the LED replacement and labor costs
Repeat steps 1-4 for the LED replacement.
Here is our example LED equation:
2600 ÷ 50,000 = 0.052
$25.00 x 0.052 = $1.30
6 ÷ 60 x $20 = $2 x 0.052 = $0.10
Making the total cost $1.40 per year for each LED lamp.
Step 6: Calculate Total Savings Per Light
For this part we will simply add the material cost to the labor cost to both the existing light and the LED replacement and subtract the totals.
Halogen: $7.79 + $3.46 = $11.25
LED: $1.30 + $0.10 = $1.40
Total savings per light: $9.85
As you see, maintenance savings can be quite substantial.
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