8.8 Life Cycle Cost Analysis
8.8 Life Cycle Cost AnalysisBack in Lesson 6, we learned about calculating the Life Cycle Cost Analysis. We can do the same thing with lighting. Performing a life-cycle cost analysis (LCC) gives the total cost of a lighting system—including all expenses incurred over the life of the system. This analysis can be applied not only to lighting but for most of the appliances, automobiles, heating systems, and so on, when two systems are compared to determine the most cost effective options.
There are two reasons to do an LCC analysis:
- To compare different systems, or bulbs in this case.
- To determine the most cost-effective system or a bulb.
For some lighting systems, one of two situations may exist:
- The initial cost may be high, but the energy costs will be low over its lifetime.
- The initial cost to buy a bulb or a system and the energy or the maintenance costs may be low, but the useful life of such a bulb or system may be short. (In this case, we may have to replace the appliance several times to get the same useful life as the other option.)
Therefore, a life-cycle cost (LCC) analysis can be helpful for comparing the total costs incurred over the lifetime of a lighting system. It is, in essence, calculating all the costs incurred to buy, maintain, and run the system over its lifetime.
In the formula above,
- Cost to buy is the purchase price of the lamp or the system.
- Cost to maintain is the cost incurred to maintain it in good operating condition. (For example, in the case of a car, an engine oil change every 3,000 miles is part of maintenance costs.)
- Cost of energy is the energy or the fuel it takes to run the appliance or lamp for its lifetime.
- Replacement cost is the cost to replace the bulb. In this case, the LED has a lifespan of 20,000 hours, so we will need two CFL bulbs over the lifetime. If we were comparing Incandescent lights, we would need 20 bulbs over this lifespan. (Some incandescent lamps had a lifespan of only 1000 hours!)
The table below shows a life cycle cost analysis in comparing a CFL and a LED.
| Category | Compact Fluorescent Lamp (CFL) | Light Emitting Diode (LED) |
|---|---|---|
| Rating | 13 Watts | 8.5 Watts |
| Lumen output | 800 Lumens | 800 Lumens |
| Cost to buy the bulb ($) | $2.87 | $3.50 |
| Life of each bulb | 10,000 h | 20,000 h |
| Bulbs needed for same life | 2 bulbs - $5.74 | 1 bulb - $3.50 |
| Energy Consumption | 13 Watts x 20,000 h 260,000 Wh = 260 kWh | 8.5 Watts x 20,000 h 170,000 Wh = 170 kWh |
| Price of electricity | $0.1625 | $0.1625 |
| Cost of Electricity needed for 20,000 h | 260 kWh x $0.1625/kWh = $42.25 | 170 kWh x $0.1625/kWh = $27.63 |
| Total Cost (Life Cycle costs) to own and operate the bulbs for 20,000 h | $42.25 + $5.74 $47.99 | $27.63 + $3.50 $31.13 |
Replacing a single CFL bulb with an equivalent LED can save approximately $16.86 over 20,000 hours of operation. Now multiply that by the number of fixtures in your home—living room, kitchen, bathrooms, bedrooms, closets, garage, and more. The cumulative savings add up quickly. If you still have incandescent lights in your home, this savings will be even larger.
LEDs also have some other advantages over LEDs. LEDs deliver the same (or better) light quality as CFLs while using less energy, lasting longer, and eliminating mercury concerns. If you still have working CFLs, it's fine to use them until they fail—but when it's time to replace, choose LED for maximum savings and performance.