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Understanding How It Works

At Energy Efficiency, the method of calculating your electricity bill savings comes from some very basic industry formulas. For example, your lighting components use consistently measureable amounts of electricity, and are the basis of many of our initial calculations. Essentially, we decrease your demand for electricity in predictable and substantial amounts using energy efficient technology, and then we guarantee those savings to you. Our projects pay for themselves quickly, and the net result is a cleaner looking, brighter, and more comfortable work environment that uses much less electricity. Take a look below to see a sample of how it works.

Sample Lighting Retrofit

Let’s look at two purely fictitious lighting systems, A and B. Lighting System A is the existing system and Lighting System B is a proposed retrofit system which simply includes more-energy-efficient lamps and ballasts. They produce comparable light output.

  Lighting System A Lighting System B
Input Watts/Fixture 175 100
Hours of Operation/Year 3,000 3,000
Energy Consumption/Year (Wh) 525,000 Wh 300,000 Wh
÷1,000 to get kWh 525 kWh 300 kWh
Energy Savings/Year (kWh)   225 kWh
Utility Cost/kWh $ 0.10 $ 0.10
Energy Savings/Year ($)   $ 22.50
Number of Fixtures Retrofitted 100 100
Total Energy Savings/Year ($)   $ 2,250.00

So we save $22.50 per year by replacing the lamps and ballasts in this fixture. For the 100 fixtures, we save $2,250 per year. Note that additional energy savings can be calculated from the air conditioning system, which now works less hard because less heat is produced by the lighting system.

Note that we simply could have installed occupancy sensors or some other controls that would reduce the hours of operation, or both strategies. If we installed new controls in this case and reduced the operating hours from 3,000/year to 2,300/year, we would produce an additional $700.00 in energy savings, or a total of $2,950 per year.

Payback and Return on Investment

Now that we know how much money we’re going to save while still enjoying comparable performance from the lighting system, it is time to do an economic analysis, which includes determining payback and return on investment (ROI). A full-fledged net present value analysis or life-cycle cost analysis is a major undertaking (best to use software), so for our purposes we will determine simple payback and ROI.

Simple payback is the amount of time in decimal years that will go by before a system upgrade option’s energy savings reach the net installation cost (also called the initial cost):

Payback (Years) = Net Installation Cost ($) ÷ Annual Energy Savings ($)

5-Year Cash Flow ($) = 5 Years – Payback (Years) x Annual Energy Savings ($)

Five-year cash flow was chosen based on expectations of the life of the lamps; by factoring in the cost of lamp replacement and other maintenance costs, a 10- or 20-year cash flow can be produced.

Simple return on investment is an internal rate of return, expressed as a percentage, based on the relationship between annual energy savings and the net installation cost:

Common Upgrade Strategies

Upgrade with reduction in light levels

In some applications, ambient light levels can be reduced, particularly in spaces where ambient light is needed only for the task of orientation, in spaces where planned lighting maintenance is resulting in a light level higher than originally planned for, and in spaces where IES light level recommendations have been revised (that is, reduced).

Approaches include dimming, lamp/ballast removal, specular reflectors, reduced-output (lower-wattage lamps) and current limiters.

Increase light levels

This entails increasing light levels via planned lighting maintenance, specular reflectors, higher room surface reflectors or higher-output lamps and other approaches; after light levels are increased, we are then afforded the options to then reduce light level and save energy as shown under “upgrade with reduction in light levels.”

Maintain light levels

In these spaces, we need to maintain current light levels but can do so by retrofitting with lighting equipment, such as more-efficient lamps and ballasts, to provide comparable light output at a reduced wattage.

Focus light levels

In some applications, the overhead ambient lighting system is doing most of the work in the space, providing illumination for both ambient and task lighting. In many of these applications, by providing portable, adjustable task fixtures at the task locations, we can upgrade to reduce light levels in the ambient system, since its primary function will be re-tasked for orientation only. An example of this approach is an indirect lighting scheme for ambient illumination, with task fixtures.

Reduce hours of use

Controls such as energy management systems, occupancy sensors and daylight-dimming ballasts can be installed to control the hours the lighting system is used, eliminating waste and reducing energy usage. Here are some useful guidelines to remember when attempting a lighting upgrade:

  • The lighting system must serve the design goals of the space; no upgrade should compromise the system’s performance in meeting these goals. The upgrade should begin with the question, “What is the spaced used for and how does the lighting support that?”
  • There is no magic to new energy-efficient lighting systems; since all lighting equipment operates according to the laws of physics, there are always tradeoffs
  • All lighting components must be compatible to operate properly
  • All OSHA safety requirements should be met when any work is done on the lighting system
  • Ensure that all retrofits are permanent and understood by the maintenance personnel in a written and communicated lighting policy, so that old components are not reintroduced back into the lighting system later (such as when a screw-in compact fluorescent lamp fails and is then replaced with an incandescent lamp)
  • Planned lighting maintenance can be an effective means of getting the best results from the lighting system and can help create energy management opportunities