How to calculate the labor savings from your LED retrofit project

In our last post, What will you save from an LED Lighting Retrofit Project?, we provided a high level overview of how to calculate the savings your business will recognize from an LED lighting retrofit project.  As a reminder, the major contributors to the total savings are:

1. Labor savings
2. Energy savings
3. Material savings
4. HVAC savings

In this post we will go into more detail about the labor savings from an LED lighting retrofit project.
Your older lighting products, like incandescent, halogen, or CFL bulbs, have lifespans of 1,500 to 15,000 hours.  Depending on your business and your lighting needs, these bulbs could be operating 365 days a year and an average of 12 or more hours per day.  At the low end of the lifespan, that means that you need to replace each bulb about 3 times per year.  In order to replace the burnt-out bulbs you have to spend time purchasing/tracking your inventory of replacement bulbs, using your own employee or hiring a contractor to find the correct replacement bulb and then replacing the bulb (which could involve a ladder or lift to reach the fixture). 
If your facility has hundreds of lighting fixtures, you can see how the time and cost to replace bulbs can add up quickly.
Switching to LED lighting, with a rated life of 35,000 to 100,000 hours, would significantly lower your labor costs because you don’t have to change bulbs as often.  Also, many LEDs come with a manufacturer’s warranty, which will further defray your total maintenance costs.
Let’s work a “real” example:

• In our example we are determining the labor savings from replacing 90 watt PAR 38 bulbs with 14 watt PAR 38 bulbs.  These bulbs are operating 365 days a year for an average of 12 hours per day (4,380 hours/year).  For purposes of this calculation, we will assume that the rated life for the existing 90 watt bulbs is 1,500 hours and the rated life of the replacement LEDs is 50,000 hours.
• Determine the number of annual replacements for the old bulbs.  With a 1,500 hour rated life operating for 4,380 hours per year, each of the old bulbs will need to be replaced 2.92 times. 
• Determine the number of annual replacements for the new LED bulbs.  With a 50,000 hour rated life operating for 4,380 hours per year, each of the LED bulbs will need to be replaced .09 times per year. 
• Determine average time to change a bulb. For purposes of this calculation, we will assume it takes an average of 10 minutes to identify the proper bulb, find a replacement in the storage room, get a ladder (if needed), change out the bulb, and properly dispose of the burnt-out bulb.
• Hourly rate for lighting maintenance.  This hourly rate will depend on whether you use a contractor or hire your own maintenance employee.  For purposes of this calculation, let’s assume a fully loaded labor rate of $80/hour.
• Determine cost to change one bulb:
  • Minutes to change a bulb: 10
  • Cost per hour: $80
  • Labor cost to change a bulb: $13.33
• Determine annual cost to maintain the old bulbs vs the new LEDs:
  • Old bulbs: replaced 2.92 times at $13.33 labor cost per replacement = $38.93 per year per fixture
  • New LEDs: replaced .09 times at $13.33 labor cost per replacement = $1.20 per year per fixture
• Calculate the savings per year per fixture:
  • $38.93 labor cost per year for each fixture using the old bulbs vs $1.20 per fixture for the LEDs generates a savings of $37.73 per fixture per year.

If your facility has hundreds of fixtures, you can see how the labor savings adds up quickly and helps make the case for changing out your old, inefficient bulbs for LEDs that will provide you with years of worry free (and maintenance free) operation.
In future posts we will cover the Energy savings, Material savings, and HVAC savings from an LED lighting retrofit project.  Contact the LED lighting installation experts at PKK Lighting to discuss your next lighting project.