LED Lighting for Manufacturing: Costs and Benefits

Efficacy ratings vary significantly among different technologies and applications, from less than 15 lumens per watt (lm/W) for standard 60W incandescent lamps, to nearly 150 lm/W for the latest LED area lighting.

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Generally, lights with higher lumen outputs have higher efficacy ratings.  LEDs often have better efficacy than other technologies, but highly efficient fluorescent and HID options can provide better or similar efficacies for some applications. Reducing the lighting system’s power will also save on demand charges.

When commercial or industrial customers significantly reduce their power draw, they should review their utility rates schedules to determine which schedule is most economically attractive. Large customers that face “ratchet” charges may benefit by shifting to a different schedule if demand reductions are significant. Taking ratchet charges into account may significantly improve the cost-effectiveness of more-efficient technologies.

LED technology is treated differently from non-LED technology in this regard. LED chips degrade slowly over time, producing less light and shifting their color characteristics. The metric used to define the lifetime of LEDs is L70 lumen maintenance.  This refers to the amount of time the LED will operate while maintaining at least 70 percent of initial output.  Some LEDs will take longer to get down to 70 percent.

Non-LED technologies have electrical components or filaments that fail completely at some point; the rated lifetime for those products is defined as the number of hours of operation at which 50 percent of the units in a sample fail. Non-LED technologies also experience depreciation in lumen values over time, with some technologies depreciating more quickly than others.

The following presents a range of rated lifetimes and lamp lumen depreciation (LLD) values at the end of the rated life for selected technologies.

LE: Calculated by dividing luminous flux by electrical power input, shown in lm/W.

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Input Power: Based on the wattage used by the luminaire with an output of 4,900-5,100 lm, which is typical for this product category, shown in watts.

Annual Energy Use: Based on IES LM-79-08 calculations assuming 3,600 operating hours per year (shown in kWh).

Annual Energy Cost: Calculated based on an assumed electricity price of $0.099/kWh, which is the average electricity price at federal facilities. Learn more about Federal Government Energy/Water Use and Emissions.

Lifetime Energy Cost: Calculated as the sum of the discounted value of the annual energy cost and assumed product life of 15 years. Future electricity price trends and a 3% discount rate are from the Annual Supplement to NIST Handbook 135 and NBS Special Publication 709, Energy Price Indices and Discount Factors for Life Cycle Cost Analysis – (NISTIR 85--37 update 1).

Lifetime Cost Savings: The difference between the lifetime energy cost of the less efficient model and the lifetime energy cost of the required model or best available model.

Products meeting ENERGY STAR or FEMP-designated efficiency requirements may not be life cycle cost-effective in certain low-use applications or in locations with very low rates for electricity or natural gas. However, for most applications, purchasers will find that energy-efficient products have the lowest life cycle cost.

Agencies may claim an exception to federal purchasing requirements through a written finding that no FEMP-designated or ENERGY STAR-qualified product is available to meet functional requirements, or that no such product is life cycle cost-effective for the specific application. Learn more about federal product purchasing requirements.

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