Maximize the return on your lighting investment with LED

When it comes to LEDs, there are several advantages over conventional technology when lighting an Ex areas.     

• Low energy consumption
• Higher efficiency
• Instant light
• Helps decrease impact of vibration
• Lower heat generation
• Optical control on the beam pattern
• Helps reduce maintenance (varies by design of LED fitting)

Additionally, LED technology has a significant impact on return of investment (ROI).  Initial investment of an LED installation is usually higher than conventional technology.

Therefore, it is important to estimate the cost savings generated by using LED technology to understand the true investment cost.

The end user should keep in mind other aspects that may impact the investment decision.  This may include carbon footprint reduction, possible rebates for using LED technology, future availability of spare parts and marketing related aspect due to the reduction of energy consumption.

Return on Investment (ROI) can be estimated before starting a project or to evaluate selecting LED over your current conventional technology.

Calculating a ROI requires the initial investment (CapEx) and operation cost (OpEx) of a lighting installation and application.

Estimating CapEx requires the following considerations.

• Costs for installing/replacing the conventional product choice
• Time to install/replace the current installed base
• Cost for the new LED fitting
• Time to replace the current conventional product with LED
• Number of people required for the work (for the Ex area usually two persons are required)
• Cost per hour of the installer
• Other cost related to renting scaffolding or elevators, if needed
• Other cost related to shut down, if needed
• Tax refunding or rebates

When estimating CapEx, it is important to compare the use of LED technology with the current best conventional alternative : in case of an installed base, this means the replacement of a lamp to get the installation running without the need of replacing with a completely new fitting.

Estimating OpEx requires additional considerations.

• Power of the conventional product (light source and ballast)
• Power of the LED product (light source and control gear)
• Cost for the conventional light source to be replaced
• Time to replace the conventional light source
• Other cost related to renting scaffolding or elevators, if needed
• Other cost related to shut down, if needed
• Energy cost per kWh
• Number of hours per year the fitting is on

Typically, when comparing conventional technology and LED fitting, only the lifetime of the light source is considered.  In this case, the LED light source shows a longer lifetime than a conventional lamp.

The underlying question for the ROI then becomes: How many times does the conventional light source need to be exchanged before the LED light source reaches its end of life? 

Lighting installation cost can be calculated as a function of the operation time (t).

The formula for this estimation can be described as:  

Cost (t) = number fitting * (Capex + Energy (t) + maintenance (t))

 Where:  Capex considers the initial invest and is calculated as:

Capex = quantity * (product cost + installation cost) + others - rebates

• Installation cost = time for installation * cost per hour of installer * number of installers
• Others = other cost related to renting scaffolding or elevators, shut down
• Rebates = possible tax refunding

Where: Energy(t) considers the energy consumption over time and is calculated as:

Energy(t) = power * time(t) * energy cost /1000

• power = fitting power consumption
• time = total usage of the fitting in hours
• energy cost = energy cost in kWh

Where: Maintenance(t) consider the cost for replacing the conventional light source and is calculated as: 

if (t) > n* lifetime Maintenance(t)= n * (cost spare + time for installation * cost per hour of installer * number of installers)

• Lifetime= lifetime of conventional light source

Myth 1: The ballast /control gear of the conventional fitting and LED have the same lifetime and needs to be replaced the same number of times. This is not always the case.

How it really works

With the rapid adaption of LED fitting in the Ex market, and with more and more suppliers in the market, it is now possible to get different performances of the control gear.  

In fact, the Lighting Europe, the Association of Lighting Manufacturer [1], as well as ZVEI (German Electrical Association, with its Lighting Division, refer to www.zvei.org), recommend presenting the lifetime of control gear for LED fitting in datasheet or free available documents as described in the IEC62722.

Myth 2: The lifetime of the light source is the same.

How it really works

A definition of lifetime for LED luminaire is presented in IEC62722.  While the lifetime value for conventional light sources is based on the same assumption between different manufacturer, this is not the case for LED.

 It is possible to find several descriptions, starting from “system life” to “rated life” or value claiming L70, L70B10, L80 and others (often with value exceeding 20 or 30 years continuous operation).

 With Lighting Europe recommendations for lifetime, a comparison is possible.  It also mentions fixing the statistical assumption behind a lifetime and the maximum number of hours to 100,000h.  (Refer to Guidance Paper)  

 Note: Our examples are based on the use of two IECex LED fittings: ExLin, LED linear fixtures for hazardous areas and PXLED, Power Floodlight Series for Hazardous areas.   We have implemented the Lighting Europe guideline in the ExLin and PXLED datasheet. 

Myth 3: The lifetime is constant over the full temperature range.

How it really works

With LED, the used value should be used based on the ambient temperature of the application.

In this section, we review three typical methods for estimating ROI.  In these examples, we explain the process and the best option to calculate your total return on investment.

First example:  1:1 replacement ROI calculation example

Performing a 1:1 replacement is the fastest method to estimate a ROI.

In this case, compare the CapEx and OpEx running cost for a conventional product and the LED option for replacement.

For example, the following features a comparison between a conventional floodlight, such as the PX04 with a 250W HID lamp, against a PXLED 10L LED light.  Note: Unit prices are indicative only.

* Lifetime of light source defined as Lx is the time before 50% of the population has a lumen output that is x% of the initial value. Refer to www.lightingeurope.org.

Taking this into consideration, the ROI shows that the initial additional CapEx on PXLED is recovered due to lower OpEx after ~2 years.    The point at which the crossing occurs is called payback.

For this example, the payback is estimated as ~1.8 years.

Therefore, choosing an LED fitting would result in a cost saving of ~1,500€ after 10 years.

The calculation is easy to scale to a higher number of fittings with a constant payback and only net savings changing.

A simplified ROI tool to calculate as shown above can be found on our website.

The calculation considers the same number of fittings for conventional and LED, and it focuses only on efficiency and unit cost.

When performing an evaluation of lighting products for the Ex environment, there are other parameters that are also important, such as:

• The use of Daylight sensors  or Motion sensors  can reduce further the operational usage of an LED fitting, considering the robustness of the light source to frequent switching.
• Due to the different electrical characteristic of an LED fitting compared to conventional technology, further modification of the system (breaker characteristic, EMC protection, etc.) can be necessary for a safe use of the new LED fitting, which can generate additional cost.

The 1:1 replacement calculation approach considers LED as a “better light source” compared to traditional fittings. LEDs are a different technology, and as such it should be looked in a a different way.

Considering LED a fitting in only a 1:1 replacement for a conventional luminaire is a limited approach and does not allow a full implementation of the advantages of this new technology.

Second example:  Effective replacement ROI calculation

The effective replacement for existing and new projects ROI calculation is an improvement compared to the 1:1 ROI calculation.  

With this calculation, we focus here on the main task of a lighting design, which is providing illumination where required with the lowest effort for the customer.

The first step of this approach is selecting the right LED product and the right quantity to fulfill the lighting task. This means selecting a product with the right quality of light (color temperature, color rendering index) with an optimized optic design.

Note:  The 1:1 comparison calculation does not consider a superior lighting design, meaning there are no indication on the luminous intensity by using conventional or LED fitting.

The same area can be illuminated by replacing the fluorescent fitting with our ExLin 7L LED fitting with standard optic, in which the beam pattern is like the one of the fluorescent lights.

It can make a difference if you are replacing the fluorescent fitting 1:1 (refer to Alternative A below), or if you decide to utilize the advantage of the different optics and select the ExLin 7L with wide beam optic (refer to Alternative B below).

The results are summarized in the table below. 

Alternative B results requires only 5 LED fixtures in comparison to baseline and Alternative A.  

Once the better fitting is selected for this application, a return of investment calculation can be done.

The parameters used are listed below.  Note: unit prices are indicative only.

Third and recommended example: System consideration for new projects and EPC ROI calculation 

Until now, we focused mainly on the operational savings that can be achieved by using LED fittings. The design with LED technology results in important saving to the complete system.

By reducing the number of total fittings results in the reduction of the number of cable glands, panels, feeders and breakers required.

The use of fewer luminaires helps reduce the total weight, a very important aspect in offshore construction.

The total lower load of the circuit also reduces the cable dimension and the quantity of copper required.

Other parameters, such as inrush current, needs to be checked and evaluated. A closer discussion with the end user is required to understand the design guideline in place to offer a complete cost savings breakdown. For example, plastic panel or stainless steel, B-type breaker characteristic and other design guidelines, may impact the complete cost savings.

A system ROI is a time consuming and complex effort, but it can really impact your overall return on investment.

We are available to assist you with selecting the most appropriate fitting to achieve optimal cost savings and help improve weight. 

The use of LED fittings can help reduce total cost compared to conventional technology by considering the complete operational lifetime of the product.

The full advantage of LED technology can only be used by validating the application with a lighting design to optimize the general lighting task.

For new project considering the complete system savings including cable glands, panels, breaker, feeder, cables can make an LED solution more convenient by reducing the CapEx cost. The additional savings in weight and total power can optimize the system further and reduce hardware and infrastructure costs.

LED fittings help accelerate the transition to a more sustainable future. The end user should keep in mind aspects like carbon footprint reduction, possible rebates for LED technology, and marketing related aspect due to the reduction of energy consumption in the investment decision.