The Financial Benefits of Converting Parking Lot Lighting to LED
April 26, 2019
Anyone who has been in any part of the facility business, for even a short amount of time, has read, talked about, or spoken to someone on the benefits of a parking lot lighting LED replacement. For those of us on the service and project side of LED retrofits, we talk about the same concepts over and over. Retrofitting to LED’s will save on energy consumption, save on maintenance, and your lighting performance will go through the roof. We shout to the rooftops about how much money you will save, and then leave it at that. You have heard the speech over and over, about how much you will save. Now you want to see the numbers, so where is that pesky sales rep now that you want to review the actual financial benefits? You have so many questions. Where is the best place to start? Should you look at your interior or exterior lighting first? Are their different product options? Who should you purchase your lighting applications and products from? The list goes on and on, but the big question still remains.
How much will I Save with a Parking Lot Lighting LED Replacement?
To simplify this process a bit, we are going to focus on your parking lot lighting. Example 1: A Mid-Atlantic coeducational liberal arts college, needed a full turn-key solution to reduce both energy and maintenance costs while improving current light levels to enhance student security throughout their entire campus. Action Services Group, working with the Customer, selected a series of LED parking lot, floods and lamp post fixtures for a campus-wide lighting retrofit. Providing photometrics and ROI analyses ensured that the LED products accomplished the customer’s goals in a cost-effective manner. 400W HPS flood light fixtures were replaced with 141W LED, 250W flood light fixtures were replaced with 91W LED, 150W decorative fixtures were replaced with 60W LED, 250W and 400W parking light fixtures were replaced with 116W and 188W LED fixtures. The LED retrofit reduced their lighting energy by 63% and eliminated an annual maintenance cost of $20,967.99. Example 2: A large discount retailer needed a full turn-key parking lot solution to reduce both energy and maintenance costs while improving light levels for 532 locations. Action Services Group, working with the Customer, selected a series of LED parking lot, floods and lamp post fixtures for this 532-location lighting retrofit. Providing photometrics and ROI analyses ensured that the LED products accomplished the customer’s cost-saving goals. 250w HID wall pack fixtures were replaced with 52w LED, 400w HID parking lot fixtures were replaced with 250w LED, and 400w flood light fixtures were replaced with 250w LED fixtures. The LED retrofit reduced their lighting energy by 74% with an estimated 3-year energy savings of $1,278,214 and eliminated an annual maintenance cost of $394,793.
Estimate Your Savings
Now that you have seen a few examples of actual financial savings associated with retrofitting parking lot lighting to LED, you probably want to get a better idea of what Your Savings would be. Because let’s face it, it’s great for the people in those examples, but you want to see YOUR Savings. The below information is available from www.energy.gov. The Office of Energy Efficiency & Renewable Energy working in conjunction with the DOE Municipal Solid-State Street Lighting Consortium, the Clinton Climate Initiative (CCI)/C40, the Federal Energy Management Program (FEMP), and DOE Better Buildings, has created a Street and Parking Facility Retrofit Financial Analysis Tool. This tool provides an avenue for analysis of the costs and benefits associated with street and parking facility lighting efficiency projects. The tool utilizes life-cycle cost (LCC) analysis, tracks cost and benefit throughout a specific period while discounting future cash flows to present value, using a user-specified discount rate. The use of such discounting captures the time value of money.
- Capital costs, net of rebates (including discounted capital costs, if a project’s implementation is to occur over multiple years)
- Present benefits of annual electricity costs, for both base and retrofit cases
- Current values of annual maintenance costs, for both base and retrofit cases.
The tool also provides (among other outputs) a common non-discounted financial metric, simple payback (the number of years required for savings to offset initial outlays), as well as the internal rate of return (IRR), which is the discount rate at which the NPV is zero. Other outputs reported include:
- Annual energy and energy cost savings
- Annual greenhouse gas reductions
- Up to 15 years of detailed annual cash flow data
- Average annualized energy and maintenance savings per fixture.
Free Downloadable Financial Analysis Tools
Street and Parking Facility Lighting Retrofit Financial Analysis Tool, v 1.2 (revised March 2017) Street and Parking Facility Lighting Retrofit Financial Analysis Tool, v 1.2, with sample data (revised March 2017) Once you wrap your mind around the actual cost savings your organization will benefit from when you retrofit your parking lot lighting to LED, you are going to want to move on to the next steps. Here are a few other resources you are going to want to review. LED Retrofit Education Center Parking Lot and Area Lighting Education Center A Critical Guide to Setting Criteria Goals for Your Led Retrofit Project Consider partnering with a project management provider that can supply a national LED lighting and electrical program. Review these items when vetting a national LED lighting and electrical project provider.
- Available Resources
- Available Personnel
- Reporting Capabilities
- Data Capturing for lighting and signage components
- Lighting Recommendations
- Product Neutral
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“We awarded our portfolio retrofit and service maintenance program to Action Services Group because of their excellent service history, pricing, experience, capabilities, and their energy-saving recommendations. After our team visited their office, we couldn’t have been more impressed with their planning and capabilities.” Global Sourcing Department – Fast Food