Return on Investment (ROI) Calculation for LEI Lighting

Introduction

The LEI lighting products cannot be compared to what looks like a similar product on a unit price basis. Why? The change in technology from previous lighting technologies to the light chip technology is a paradigm shift. It could be compared to what happened when the new technology cell phone came out. Why would someone pay $500 for a new cell phone when a perfectly good touch-tone land line phone cost $20? Because the new cell phone offers many new technological advances not available in a land-line phone even though their basic function, making a telephone call, is the same. The LEI lights, although their basic function is to provide light, offer many cost-saving advantages to a business that are not available with the current lighting technologies.

The next two section of this proposal, “Energy Saving Analysis of Current Lighting and Proposed LEI Lighting” and “Cost Analysis of LEI Lighting Products Versus Current Technologies” shows detailed comparisons on how the LEI lighting saves you money over existing lighting in several different ways, and, over the minimum 5-year life of the lights, actually pays for the lights (the lights are essentially “free”) and give you cash back each year. If you are a business this cash will drop to your bottom line as part of you ROI.

 

Description of Actual Model

Recently, a potential client came to us asking for a proposal for lighting for a store they were remodeling. This is a very large, nationwide retail chain with thousands of store locations throughout the U.S. We were invited in to analyze their current lighting systems and make a proposal using LEI products.

The numbers and descriptions given below are ACTUAL based on a detailed analysis of this store by LEI personnel. These are not hypothetical numbers so the savings shown are REAL. The actual number of fixtures, bulbs, wattage figures and the cost of replacement parts were all verified by an employee of the client who accompanied the LEI representative.

Energy Saving Analysis of Current Lighting and Proposed LEI Lighting

One of the major savings of the LEI lights over other technologies is the low energy use. The analysis below will compare the cost of the electrical consumption of the current lighting compared to the electrical consumption of the LEI lights. The electrical consumption comes from the total wattage of the bulbs used and is accurate.

Assumptions:

  • We used the actual KWH consumed by each type of lighting
  • We used a cost of 10 cents per KWH for comparison purposes
  • The current Ballasts consume 8W of power each.
  • This company store operates on an average of 12 hours per day and is open daily year-round.

Electrical Use of Current lights                                          Electrical Use of LEI Lights

  1. Showroom:

44 fixtures x 80W= 3,520 W                                       44 fixtures x 18W= 792 W

  1. North High-Bay space:

32 fixtures x 80W= 2,560 W                                       16 fixtures x 36W= 576 W

  1. South High-Bay space:

41 fixtures x 80W= 3,280 W                                       19 fixtures x 36W= 684 W

  1. Parking Lot:

6 fixtures x 450W= 2,700 W                                       6 lights x 150W= 900 W

  1. Wall Lights:

12 x 150W= 1,800 W                                                  12 lights x 100 W= 1,200 W

  1. Fascia Lights:

16 x 40W= 640 W                                                       6 lights x 75 W= 450 W

 

Total Light Watts used: 14,500 W                               Total Light Watts used= 4,602 W

Total Ballast Watts used:

133 fixtures x 8W= 1,064 W                                       No Ballasts Used= 0

Total Watts Used: 15,564 W                                                Total Watts used: 4,602 W

 

Power savings of LEI lights: 15,564W-4,602W = 10,962 W saved or 70% less electricity

 

Return on Investment (ROI) calculation for electrical use:

Yearly Power Usage:

15,564 W x 12 hrs/day x 365 days/yr = 68,170 KWH            4,602 W x 12 x 365= 20,256 KWH

At 10c per KWH: 68,170 KWH x 10 cents= $6,817                20, 256 KWH x 10 cents= $2,025

 

  • LEI electrical savings is: $6,817-$2,025= $4,792 per year
  • Five-year electrical savings: $4,792 x 5 years= $23,960 additional savings
  • Therefore, NET cost of operating the LEI lights over 5 years is:

                   $14,748 (5-year costs of lights) – $23,960 electrical savings= – $9,212

  • The LEI lights actually pay you back $9,212 over 5 years, after paying for the initial purchase of the lights, which drops right to the bottom line

 

 

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