20B — May 26 - June 8, 2017 — Green Buildings — M id A tlantic
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“The Direct Install savings was dramatic. Any business that isn’t taking advantage is missing a great opportunity.” Gene Muller
By George Crawford, Green Partners The new math for LED retrofits
J
ust a few short years ago a LED Retrofit was all about the utility incentives. Yes t h e r e
rofit mix that has increasingly become more valuable than any rebate. This factor is the direct result of the improved perfor- mance of today’s LED products as compared to those of just a few years ago. Consider the economic model of a LED retrofit. The rebate itself is a one-time benefit which lowers the up-front costs of initiating a retrofit. Product performance, however, is the ingredient that generates the year after year utility bill sav- ings which is the economic un- derpinning of any LED retrofit. Performance can be measured by the lower levels of electric consumption that result from the replacement of high en- ergy consuming lamp products with lower energy consuming LED products. It can also be measured by their ever in- creasing longevity. The longer the useful life of the installed LED products, the better the economic return - both from the perspective of the accumulated year to year utility bill savings as well as the lower levels of lamp replacement and related maintenance costs. The key in- gredient to this overall savings benefit ties back to the original purchase of the LED product for the retrofit. Make sure that each LED product is of the highest quality and has a long useful life. The retrofit that keeps on giving – or performing – for the longest period of time is the retrofit that will generate the highest investment return. Probably the best way to il- lustrate the dynamic between a longer useful life and the in- creased investment return is to analyze the financial model of an actual LED retrofit (rounded numbers). This model is based on an existing commercial facility located in Queens. This facility currently has a broad mix of lighting products – including troffers, high bays, fluorescents and incandescents totaling 3,200 individual lamps which currently consume 2,000,000 kWh on an annual basis. Us- ing a utility billing rate of 15 cents, the starting point is the annual electric bill of $300,000. for this facility. The cost of the LED product selected to replace the existing 3,200 lamps for this project is $200,000. - less the rebate of $50,000. for a net product cost of $150,000. In house electricians combined with building staff will perform the installation for a labor continued on the next page
rebates. It was not unusual for rebate funding to cover the en- tire cost of the LED product for a qualifying retrofit project. To- day that picture has changed. Rebates are lower, much lower, more in the range of 25% of the cost of the LED product for a commercial retrofit and even lower for multifamily projects. Given the rebate trend line, expect rebates to go even lower. As a result, they will become a smaller, much smaller part of the economics of any potential LED retrofit. Importantly, however, there is a significant economic factor in the LED ret-
was the add- on of saved energy and the advan- tage of the longer life for LED l amp products, but the main at-
Founder, Flying Fish Brewing Company
70% of the cost.
Upgrade to energy efficiency with Direct Install and New Jersey’s Clean Energy Program™ will pay
George Crawford
traction was the rebate. Back then utilities were making a big push to prime the LED retro-fit pump and priming the pump came in the form of very high
Direct Install is brought to you by the New Jersey Board of Public Utilities.
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HowWould You Like To Receive LED Energy Savings Like This?
Cost of LED Product Installed - $56,600.00 Annual kWh Savings 78,132 Annual Savings (based on .24 rate) - $18,751.00 Return On Investment - 2.7 years LED Products Carry a 7-10 Year Warranty
LED Product: With recent advancements, the "one for one" lamp replacement - an incandescent A19 lamp replaced by a LED A19 lamp of lower wattage is old news. "The smart move is to utilize the latest LED "engines" such as TerraLUX. The advantages are 1) Less labor and material costs, 2) Faster payback because there will be more energy saved, and 3) A longer useful product life – 70,000 hours with a 7 year warranty. LED Retro-Fit Payback Timelines: If your LED Retro-Fit will include the replacement of both incandescents and fluorescents, the combination of the energy savings and the funding will result in a payback of about two year’s time.
954 Lexington Avenue * Suite 320 * NewYork, NY 10021 For More Information Visit www.GreenPartnersNY.com or Contact George Crawford, Principal at gcrawford@greenpartnersny.com
To Get Your Project Started, Contact Us Today For A FREE LED RETRO-FIT FEASIBILITY STUDY CALL TOLL FREE 800-595-1094
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