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How to calculate the energy savings from an LED retrofit project

Of all of the reasons to embark on an LED lighting retrofit
project, the energy savings from the project might be the most
compelling. Not only do the savings go directly into your pocket from a
reduction in your monthly utility bills, but the carbon footprint your business
is leaving is smaller. While the impact of the project on our planet is
important, it’s the reduction in your utility costs that will likely get
management’s attention and help sell the project.

This is the third blog post in the series to calculate the
savings from an LED lighting retrofit project. In the previous 2 posts we
introduced the topic (

What
will you save from an LED Lighting Retrofit Project?,) and dove into the
Labor savings in more detail (

Labor
Savings from an LED Lighting Retrofit project). In this post we will
provide more details about how to calculate the Energy savings from a retrofit
project.

Unlike the calculation of the Labor savings we introduced
with our last post, which involves several assumptions for how long the bulbs
will last, how many minutes does it take to change a bulb, and the fully loaded
labor rate, the calculation of the energy savings is a very straight forward
math problem. Put simply, the total energy savings is the money your
company will save due to the reduction in wattage from switching from less
efficient lights to the more efficient LED lighting products.

For the purposes of calculating the energy savings, our
project assumes we are replacing a series of older 90 watt PAR 38 lights with
14 watt LED PAR 38 lights.

Steps to calculate the Energy Savings from your project:

**Step 1 – Gather the inputs for our project**
**Wattage of old lights:** 90 watts
**Wattage of new LED lights:** 14 watts
**Operating hours:** for this calculation
we’ll assume the lights are on for 12 hours a day for 250 business days per
year
**Electric rate: **this is the rate you pay
your electric company. In Dane County, Wisconsin, the average rate for
electricity is $0.12 per kilowatt hour. For your calculation you’ll need
to check with your electric company.

**Step 2 – Calculate the Energy Savings for each bulb**
Using the inputs from Step 1, the savings per bulb is
calculated as follows:

- Wattage of old light: 90 watts
- Minus: wattage of new light: 14 watts
- Equals: Savings per light: 76 watts

**Step 3 – Calculate the total Operating hours**
- Operating hours per day: 12 hours
- Times: operating days per year: 250
- Equals: 3,000 operating hours per year for each
light

**Step 4 – Calculate the Energy Savings per light in
kilowatt hours (kwh)**
- 76 watts saved per light
- Times: 3,000 operating hours per year
- Divided by: 1,000 (to convert to kwh)
- Equals: 228 kwh saved per year

**Step 5 – Calculate the annual savings**
- Energy savings per light: 228 kwh
- Times: Electricity rate: $0.12/kwh
- Equals: $27.36 Savings per light per year

Now that you know the savings from each light, you can
easily determine the savings from your LED lighting retrofit project(s).
For example, if you have a warehouse with 100 lights, your retrofit project
would save $2,736 in electricity costs per year – a substantial savings!

If you would like some guidance on your LED lighting
retrofit project or need an experienced

lighting
installation company to help with your project, contact PKK Lighting in
Madison, WI. We’ve helped hundreds of customers take advantage of the
savings from more efficient lighting solutions and we’d like to help you.