I recently spoke with an LED sales rep and I am trying to do an independent analysis of the payback period of changing out T8 bulbs for the equivalent LED bulbs. I am coming up with the following assumptions and results. The challenge is that I am a commercial real estate broker and not a facilities or lighting pro, so I don't know if there are other issues I should be taking into consideration or if the assumptions I am using are right. If the numbers work I would like to promote the conversion to my office building clients, and if not then I would like to show them why not.
100,000 square foot office building
One fixture per 110 square feet
Three 32w, T8 bulbs per fixture
Total of 2,727 bulbs
49 hours per week of use
2,548 hours per year of use
Fluorescent bulb life: 28,000 hours
LED bulb life: 50,000 hours
4 foot, T8 fluorescent bulb price: $2.33 each
LED equivalent, in quantity: $61 each
With these assumptions I am getting a payback of 7.28 years. Apparently there is also a utility rebate (I’m in California), which I have not factored into the payback. The salesman is claiming an additional annual savings of $7,500 for maintenance/bulb change, but if the T8 life is really 28,000 hours that would not be the case. If there were that much in maintenance savings the payback is 3.44 years, which makes the change a much better deal.
Any thoughts would be appreciated. I am looking for confirmation or rebuttal of any of the assumptions, and especially if there are any real-world issues I am missing.
Thanks in advance.
We have been talking about looking into going LED on some of our light fixtures and, realistically, been looking towards the California standards for guidance on what they are doing. I know that there is a website that was well written on the LED advantages and drawbacks to doing so - but I must not have tagged the site as a favorite when I was reading it. I would suggest doing a search and you should be able to come up with it fairly quickly.
That said, here are a couple of things that we have run into. The first is that the color spectrum for LED is not quite there yet. They do not have the color range that T-8's have - many still have that blue "tint" to them. This is continuing to improve, so the longer you wait, the better the light quality is. Since it appears to be in an office type environment, the lighting will have an impact on the productivity of the company and needs to be considered.
The other issue I have seen and the main reason for us not to move forward on our end is that the ROI is really not there. While LED's are in the front pages of the news and people are really trying to make headway, I usually find that there are other "low lying" fruits that can have a bigger impact on the bottom line than upgrading to LED's at this time.
There is one other item that you need to consider. Right now, there are no standards for LEDs. Each manufacturer has product made to their specs. From what I have been seeing, as things change - so do the manufacturers and their equipment. One thing we watch out for is that you end up buying a system and then are stuck with their product because you cannot find anyone else that is compatible with what you have.
Hope that helps a little.
Thanks for the info. I ran a spreadsheet with a range of variables (mine and the rep's) and the payback period was between 5.71 and 7.73 years. That's a long time for the large initial investment.
Your comment on color spectrum is something I have found during my research, but the standards issue is a point very well taken and is most likely a deal killer all on its own. It brings to mind universities buying the latest VCR technology before standardization and ending up with a lot of (unsupported) Betamax units.
I don't know where to start, other than firstly 'caveat emptor'. In a large Toronto project, as well as through the US DOE CALiPER Program, the LED T8 replacement has been 'set aside' and almost dimissed due to the rather mediocre performance, let alone the lack of luminous efficacy and compounded by the lack of econmic efficacy. As well,only one US based company has the registered patent. When a brand flouresecent can deliver the lumens with 25 watts, last over 20,000 hours and cost under $10.00, howcan it be justified in mass commercial applications at this time. Yes, where access or critical applications are concerned, it 'may' make sense. With respect to paybacks which exceed anything over 2-3 years, you have to be concerned about the warranty and the reliability of the company,who may not even been in business that long to date. Will the company be around when the lights go down? I am involved with a major Chicago pilot that would hopefully and finally either deliver or dismiss the application until the technology and pricing catch up. The project is even willing to get involved in funding the provider in the manufacturing of cmmitrted largew quamntities in an attempt to bring the cost down, but the takers are few, as most product is arriving on boats from lands afar and the representation is sketchy at best. I can keep you posted
greenTbiz / LED CIty Toronto - brian(at)greenTbiz.org
Contributing Editor, LEDs MAGAZINE
Thanks for the response. It does seem that at this point there is no real advantage to LED lighting, unless, as you point out, there is an access or critical application issue. I will keep my eyes out for any updates as you move along (or not) with the project.
Glad I could help Mike. It is something I have looked at for a few years, but have not seen definitive answers on yet. Brian, you brought up some good points for us to keep in mind. While it is nice to be on the cutting edge of technology, I do not think the product is up to the standards needed for a general switch over carte blanche.
A couple of points and to be honest, I am an energy efficient lighting manufacturer. I don't care what you want, LED, T5, T8, I make it and sell it. A couple of things to watch for, as one of the other posts suggest, CALiPER recently released version 8 on LED testing. Throughout the analysis, one thing is clear, the marketing doesn't equal the performance. Some of the claims they make are beyond ignorant. My real problem is that this misinformation and lack of performance is going to sour people on LED in the near future. Folks are tired of getting burned by snakeoil!
Keep in mind a few things, LED manufacturers are creating their own standard. There are NO standards for LED from UL for general lighting, LED signs, exits, etc. yes, but NO LED general lighting product can carry a UL listing because it doesn't exist. They can be UL rated, but not listed. How many have you seen that say they are UL listed, it is false like most of their other claims. They also have decided that their system fails at 70%, all other light sources use 50%. By the way a T8 lamp with a programstart ballast and 12 hour starts last 42,000 hours now. If you decide that T8s are now failed at 70%, the lamp life is 50,400, but we can't do that because we have respect for a REAL, TESTED standard. I can assure you that they DO NOT last 50000 hours, we have been tested a T8 replacement tube for 15 months and 15% of the LEDs are failed and 0% have any color match.
Just as a sidebar of how bad these guys are, I was "told" last week that LED does not attract bugs in any outdoor setting because it does not produce UV. This is also false, both statements. LED does not produce UVb or UVc, but there is a small amount of UVa produced. UV has nothing to do with bug attraction either.
I would say your payback numbers are aggressive. At $1.60/lamp I can provide you with 38, T8 lamps and you can throw 37 of them away and not lose money or payback. Keep in mind that the LEED crap about mercury is exactly that. The reason LEDs are made in the 3rd world is they have all kinds of "bad" stuff in them and in the US we have the EPA.
Good luck and let me know if you would like some help.
From all of the perspectives here it looks like LED is not ready for prime time. Interestingly enough, after I corresponed with the LED salesman with my analysis and some of the info from here he told me he was leaving the company and would be looking to sell a different product.
Disclosure: I sell LED lights so take my bias into consideration as you read my post
It is excellent that you have considered LEDs as an option in your independent analysis. Doing a thorough an economic analysis of LEDs vs. fluorescent lighting is more evolved than simply comparing the electrical consumption of the lights as rated in Watts with your usage and the cost of electricity.
To answer your first question... there are 2 real-world issues you have not accounted for in your calculations. The first is heat load and the second is ballast replacement. All lights produce an equivalent amount of thermal heat inside a building as is their stated Wattage. A cooling system with say a 10 SEER rating takes 0.31 Watts of electricity to extract every 1.0 Watts of thermal heat. Secondly, LED lights are self ballasted which greatly reduces their maintenance cost (a good quality T8 ballast can cost $25 and costs about $6 in labor to replace) that's already half of the cost of an LED tube.
There are many other considerations when comparing LEDs and fluorescents for a retrofit. Such as the cost of recycling of the fluorescent bulbs. There is also a great environmental benefit of LEDs over all other lighting options. Some places, such as food production, require very expensive shatter-proof fluorescent lights to contain the mercury.
LED lighting retrofits are the best financial choice for some companies. Many people consider lighting the "low hanging fruit" of saving money in their facility. However, LED retrofits are not the best for all applications; for example, if you pay 5 cents/kWhr in electricity, run your plant 40 hours per week, don't care about reducing your carbon footprint or mercury emissions, and don't have the capital to buy several thousand dollars of LED lights -- then an LED retrofit is not for you.
After taking a critical look at a retrofit in all aspects and are confident about the quality of the LED tube, then a fair comparison can be made.
Also note, please, never purchase a LED product that uses 5mm DIPs for general lighting applications. Only buy LEDs that use SMDs (surface mount diodes). This is because 5mm DIPs have rapid lumen loss and color shift.
Even better designed fixtures can help you out. There is also motion
and daylight harvesting to consider with dimming ballasts. Even
interior zones can benefit from dimming. For years in Europe they have
been using DALI (a lighting protocol) very effectively with nice payback rates. DALI makes
each ballast intelligent and grouping is not necessarily done via
circuits. Ballasts from multiple manufacturers can interoperate so
sourcing isn't as much an issue.
I've talked to LED companies and one engineer flat out told me they
can work in an outdoor environment but they are not yet ready for
Thanks for the post seems like it is bring out some very good information. I have read all of the comments and conclusions. I challenge the assumption that LED is not ready for "Prime Time" indoors. The cost may or may not be more than CFL depending on the application. If you are really considering LED I can help you find a Lighting Designer that has experience with LED that can guide you. The T8 retrofits are very worrisome, please be careful.
I have read the comments on going and it is interesting to see that with the exception of one post(T8 ballast cost $25) no one has directly refuted any of the points I made. Fact is, I will sell you all the T8 high efficiency, main manufacturers(the BIG 3) ballasts you want for $24. In fact, I am quite happy at half that much. If you buy them from a BigBox retailer, maybe $25, but from a reputable manufacturer, no way. To call T8 retrofits "worrisome" just shows the marketing jargon the LED guys are putting out. Define "worrisome", how so? Go to CALiPER and read what they say in version 8 test on LED, Page 26. The marketing does not match the performance! It is confusing the customer and this will cause a backlash that will impact the industry when IT IS ready for "Prime Time".
How much have you been quoted for a LED replacement lamp, $50, $61, $137? A T8 lamp cost $1.60, a T5 cost $4.50. By the way, you cannot predict the heat impact in an existing fixture using LED if you don't have it tested, no respectable company would do that and then guarantee the lamp for 50,000 hours. When it does fail are you going down the the same BigBox retailer and buy a replacement lamp? The ballast replacement at $6.00labor, OK, but how are the LED tubes going to get in the fixture and the existing ballast disconnected, FOR FREE? These guys are probably leaving the ballast in the fixture for the end user to recycle so they don't have to count that cost either. Let them tell you they have UL listed, guess what, that doesn't exist, there is no standard to test against, that's why it cannot be UL listed. Do the homework, ask the right questions and then decide what is the right thing to do, economically and environmentally.
anyone interested in have a compilation of the research I completed today can email me at firstname.lastname@example.org
Scans of the latest word from IESNA and some very interesting links. There are some comments I have added but just a few.
Some additional information regarding the costs. For conversion from T8s to LEDs, if the installation is at a place with 8' to 10' ceilings I typically estimate the cost at $10 per fixture for labor + recycling cost. In a warehouse using a man-lift, this can be $20 per fixture. These are actual costs we have had from several electrical contractors in many projects.
It is fairly straightforward to calculate the saving with reduced cooling load. Consider a plant in Austin, TX with 1,000 tubes that runs an internal temp of 68 F and operates 24 hours/year. The cooling time averages about 70% of the year. If you assume their system is a 11 SEER system and electrical cost is 10 cents per kiloWatt hour, then the cooling cost of a 32 W T8 system is about $6,000 per year, whereas the cooling cost of a 16W LED system is $3,000 per year.
When it comes down to it - do what was done in the original post, do a financial estimate. Look for tax incentives and rebates. Talk to a competent lighting consultant who specializes in LEDs. For example, look for a company that is a member of IES and has P.E.s on staff who can list several successful projects. There are some good, many bad, and some great LED products out there. Also, you don't always get what you pay for with LED tube lights; as the CALiPER program showed many sellers overstate the performance. There is a huge market and need for LED replacements, but there is much confusion to sort through.
My recommendation is to replace all of your T8 lamps with the LED lamps that Johnathan B is selling. Then please report back to us on how it went after the initial install, 6 months later, 1 year later and then 3 years later.
After you sign the contract but before you complete the install, I would then like bet that you would not be happy with the results am willing to put some money on the line. If you would be so kind as to go through this effort and save everyone else from making this mistake, it would save lots of people the headache.
From what I have seen and read, the conversion of the T8 fixtures to the retrofit LED is way over rated. Color of light from the lamps is poor. Many of the fixtures look terrible with the LED lamps in them. The reflectors in fixtures that were designed for the T8 lamp do not work at all with the LED retrofit. I doubt UL will list the fixture or the fixture manufacture will warranty the fixture if you cut out the ballast and run line voltage through the lamp sockets. DOE Caliber reports speak for themselves as to how these retrofits perform.
Some reputable fluorescent lamp manufactures that have come out with lamps rated at 42,000 hours so if you are willing to replace $5 or $6 lamps every 42,000 hours in lieu of $60 to $80 for a LED every 50,000 hours, you can discount the maintenance claims.
If your spaces are over lit, many of the lamp manufactures offer energy saving T8 lamps. You could put in 25 or 28 watt T8 lamps in lieu of your existing 32 watt lamps and do that for a buck or two more than what your current lamps cost.
If you really want to make a change in your lighting system I recommend you hiring a qualified, independent lighting professional not someone who will not make a buck on selling you a particular product. There have been some significant improvements in fixture technology and lamp and ballast technology that would make much more sense than putting in the LED retrofits. For an equivalent amount of money you could probably completely replace you lighting system, improve the appearance of the space, reduce the number of lamps, reduce you maintenance and save energy.
I am a lighting designer and Professional Engineer with over 20 years of experience. As with most things, if it sounds too good to be true, it probable is. I have yet to see the results that are claimed by any of these retrofit lamps.
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