Can One Million Bulbs Save One Billion Dollars?

[kristopher]

Can One Million Bulbs Save One Billion Dollars?

...Macy’s is in the midst of what could be one of the lowest-impact energy efficiency retrofits around.

The department store chain is swapping out 60-watt-plus halogen bulbs in its stores for LED spotlights that consume 10 watts to 16 watts from MSI. Over 300,000 bulbs have been swapped out in 100 stores in New York, San Francisco and Ohio. Ultimately, Macy's will replace 1 million bulbs that will save $1 billion in electricity costs and maintenance over a 10-year period, according to Luke Classmen, a regional sales manager for MSI.

The best part, perhaps, is the relatively simple nature of the switch. The LED bulbs just screw into the existing sockets.

“There are a lot of light sockets out there,” he said....

http://www.greentechmedia.com/articles/read/can-one-million-bulbs-save-one-billion-dollars/

[Confusious]

1. Hopefully this drops the price for the rest of us

As a tech geek, I wanna get my hands on some of those bulbs, but as a poor student, they're a little pricey right now.

I could afford one for my desk though..... hmmmmm...

[frazzled]

2. That's great, but those bulbs cost $60 a pop

We have 23 ceiling can fixtures. I'd like to try one or two to see how they work and look, and then perhaps get several at a time at intervals, but we certainly can't afford to swap out everything at once. (Mostly, we just try to use as few as possible and turn the lights off a lot.)

I've read varying reports on the quality and range of these lights, but if a giant department store finds them good for lighting, I don't see why they aren't good enough for my house. Of course, Macy's has notoriously bad store design and display, so I'll take it under advisement until I see it in situ.

This seems to be the 10-16 watt MSI adjustable lamp they're talking about.
http://www.1000bulbs.com/product/55830/LED-IPAR3830225.html

[txlibdem]

13. If you want to know if those MSI LED bulbs would be a wise purchase....

You need to know a few things first: what is your per kWh electricity rate; how long will the LED bulb last; how many watts does it use; and how many watts did the old bulb use.

I don't know that info for your house so I'll use the example in the OP, a commercial establishment in New York City. I looked up the electric rates (http://www.nyserda.org/energy_information/nyepp.asp) and found that they vary by month, but I'll just choose 15 cents per kWh.

Now you need to know how long that bulb will last. Under the Specifications tab in your link it says the bulb has a 50/50 chance of lasting 50,000 hours (50% of the bulbs will have failed by 50,000 hours, the other half will last longer - who knows how long).

Then you divide the price per kWh ($0.15) by 1000 to find the price per watt-hour. Multiply that by the wattage of the LED, then multiply that by 50,000. This will tell you the total amount of money the LED bulb will have cost you over its lifetime.

Then do the same calculations using the wattage of the old bulb and compare the two.

(I did a calculation using my info for the 4 100-watt Par38's in the kitchen and found that a $40 LED would pay for its extra cost after 5.7 years -- after which they start making a profit for me).

[frazzled]

14. Another factor to add to the equation

How long will (a) you be in the house requiring those bulbs; and (b) how long will you live?

I'm joking a bit, but not really. My guess is that we will probably sell our current place within ten years (because we'll be retired), enough to see savings from the bulbs, but maybe not enough to justify a one-time outlay for so many of them all at once at the moment (the technology may improve or the price may drop). Second, we're not young: should we spend a lot today and then keel over before they've even paid for themselves? (Yikes, that's a brutalist way to think about things.)

But you know, in the end, personal cost or savings has never been our guidepost. Six years ago, when our 13-year-old Toyota started to be getting a little creaky in the knees, we decided to bite the bullet and buy a new Prius. We weren't going to be saving that much money on gas because, living in the city, we honestly don't drive that many miles to begin with. We did it to help the environment: fewer emissions, less gas consumption. Same with the lightbulbs: I've been thinking about starting to replace our halogen fixtures with LEDs little by little as soon as the technology/price seemed right. Two years ago, the guy at the electrical wholesaler we visit from time to time told us to wait. It may be different now.

Thanks for your info.

[GliderGuider]

15. Did you figure in the opportunity cost of the initial outlay?

A little NPV calculation would be interesting...

[txlibdem]

16. Opportunity cost... in this market?

And with the dollar losing value the smart thing to do would be to buy all the LED light bulbs you can get your hands on.

[kristopher]

18. Perhaps you'd explain how opportunity cost and NPV affect the analysis?

Thanks.

[GliderGuider]

20. Actually, I think the phrase I was looking for was "the time value of money"

It works like this:

The short-life conventional bulbs are significantly cheaper than the LEDs. So money that's not spent up front on incandescents can be invested (earning interest) until bulb replacement is required. If the interest earned stays above inflation, the cost of subsequent bulbs is reduced. That would make the payback time of the LED bulb longer. Technological improvements over time in the normal bulbs would also act to make the replacements progressively cheaper over time, which also acts to reduce the cost of ownership.

Assume we have the choice between an LED bulb of 50,000 hour life with a current cost of $50, and an incandescent with a 5,000 hour life that costs $5. We will consume 10 incandescent bulbs over the lifetime of one LED. The bulbs are used for 2,500 hours per year, making the total lifespan of the LED 20 years. Each incandescent lasts 2 years, and we will spend $50 over the same 20 years for incandescent bulbs. Assume an inflation rate of 3% and an interest rate of 4%, for a net return of 1% on invested money.

At the start of the thought experiment we have $100. We buy one LED bulb and one incandescent bulb.

The first incandescent costs $5, and the remaining $45 is invested for two years. The second bulb is then purchased, and remaining $40 (+interest) is left to grow for two more years. The cycle repeats 10 times.

At the end of 20 years, the LED bulb has cost $50, while the incandescents, though they had the identical total sticker price, had an ownership cost of only 45.40, leaving about $4.60 to pay for electricity.

Of course the technology of the LED bulb is locked in at the time of the initial purchase. Improved manufacturing techniques over the 20 years should allow us to lower the cost of ownership of the incandescent bulbs even further. Assume a 1% per year improvement in manufacturing technology that's passed on to the consumer as a lower price. In that case the total cost of ownership would be reduced to $41 or so, leaving $9.00 to pay for electricity.

In order to make the playing field as level as possible, the interest earned on money not spent should appear in the calculation.

[kristopher]

21. See what happens when you play...

...with jargon. You end up having to find someone to do your homework for you.

What about the savings? Don't you want to count the time value of accumulating savings through the end of the analysis period?

[saras]

3. Wake up and do your math. They're claiming one bulb saves a MILLION DOLLARS IN TEN YEARS.

So whatever kind of light bulbs they're using costs a hundred thousand dollars a year to operate. I'd say they'd damn well get some better lights. Even whale oil lamps would be an improvement on that.

I did notice the article implying, without coming out and saying so, that good quality LED lamps will be reserved for the wealthy, which is, I suppose, more important than increasing the country's energy efficiency anyways.

[kristopher]

4. Pssssst, might want to check those decimals...

Macy's will replace 1 million bulbs that will save $1 billion in electricity costs and maintenance over a 10-year period, according to Luke Classmen, a regional sales manager for MSI.

$1,000,000,000 /10 yr = $100,000,000 / year

$100,000,000 / 1,000,000 bulbs = $100 elec & maint/ year/bulb

Since they are swapping these for the range of "60-watt-plus halogen bulbs" and since we don't know the cost of maint, the number seems reasonable.

[FBaggins]

10. And you might want to check your definition of "reasonable".

At 14 cents/kwh, replacing a 60-watt bulb with a 10-watt bulb will save about $60/year if the bulb operates around the clock (which is unlikely).

There's no way that "maintenance" makes up the difference (halogen bulbs already last longer than "normal" bulbs). Further consider that 10-watt was the low end of the cited range and .14/kwh is likely much higher than Macy's pays.


Plus if you're going to count "savings" you really need to include the price of the bulb.

If the new bulbs really do last for 25 years, they should more than pay for themselves. But even that remains to be seen (I know that I've been dissapointed with CFLs that never live up to their billing).

[kristopher]

11. I guess you're psychic...

You wrote; "At 14 cents/kwh, replacing a 60-watt bulb".

The article puts 60 watt bulbs as the minimum that they will be replacing. As I pointed out the article states "60-watt-plus halogen bulbs"

Your specious claims regard
1) mx charges,
2) costs that are/are not counted,
3) cost of their electricity, and
4) amount of use per bulb.

These are based exclusively on assumptions not supported by the known information - making them appeaar self serving.
You have no idea of the validity of those assumption; yet you are pulling them out of thin air and using them to impeach explicit statements that are attributed to a knowledgeable person.

Do you have any solid evidence that the businessman who was involved in the deal, "Luke Classmen, a regional sales manager for MSI" has provided false information? Can you describe what he would gain that would be worth taking the risk of being caught in a lie? After all, unlike the nuclear industry, he has to deal with the public without a government helping to shield falsehoods behind a veil of secrecy.

[FBaggins]

12. Lol... so now we accept corporate marketing statements as fact?

The article puts 60 watt bulbs as the minimum

Yeah? And it also says that the replacement bulbs could use 60% more than I cited. I also picked an above-average cost for electricity.

Halogen's tend to use 4-5 times as much electricity for the same number of lumens, so I was actually giving them the benefit of the doubt. Or did you think that Macy's was going to dim their stores? (They aren't going to replace a 200-watt halogen fixture with one 10-16-watt LED) If anything, I overstated the savings. I did the same thing for "amount of use per bulb" since I credited them with savings 24/7 when an LED obviously won't save them a penny over a halogen when both are turned off for the night.

The halogen bulbs wouldn't last as long (how long depends on argon vs xenon etc), but to include the cost of bulbs (not really "maintenance") we would also have to include the cost of the LED and the amount lost from removed halogen bulbs that were still functioning.

In short, as I said originally, if they're as durable as people expect, they should definitely pay for themselves and the swap is worth doing... but accepting the selling company's marketing claim of a billion dollars is a big stretch.

[kristopher]

17. Having no specific reason to question this statement, I accept it over your obvious fabrications.

[LAGC]

5. Popular Science magazine has a great article on LED bulbs in their current issue.

There's a new 60-watt equivalent LED coming out in October (the "Switch60 Warm White") which is supposed to give out superior light and only cost $30, which costs 25% less than its nearest LED competitor.

I definitely plan on picking a few up to replace the few remaining incandescents that haven't yet burned out, instead of replacing them with CFLs which take forever to "warm up."

Edit: typo.

[kristopher]

6. Thank you for being an early adopter...

It is the efforts of those like you and Macy's that the price will be soon be getting to the point where I decide to jump in. For now, I'm still tickled to death with the savings my CFL's offer over incandescents.

[lbrtbell]

7. I wish the price of LED's would drop soon

CFL's are just horrible. The light quality is awful, either too yellow or too blue, and they can't be used in situations where you don't leave the lights on for at least 15 minutes, without considerably shortening their lives. (This will really be great when we're forced to use CFL's, and have to leave the light on for 15+ minutes every time we take a pee or look inside a pantry or closet.)

I've had several name-brand CFL's last less than a month, despite their high price tag. We need LED's, and fast, because it's going to cost a fortune to run CFL's, when incandescents are no longer available. :(

[kristopher]

8. Bullpucky.

The light is available in a full range of colors. It has been proven in controlled testing that there is no discernible difference between comparable temperature in CFL and incandescents.

As to their longevity, they are lasting me an extremely long time in all applications. I have them everywhere except my fridge and oven an the only ones I've replaced in the last three years are the two I hit with a ladder.

[Kennah]

9. +10

I started using CFLs circa 1999, and I have some that are probably from that time. They were quite pricey back then. In recent years, I have paid as little as 50¢ a bulb for CFLs, but that was the cheapest of the cheap. Usually $2-$3 each, unless it's dimmable.

By no means do I have to wait 15 minutes for them to warm up, even the ones I use outside. At most, 1 or 2 minutes, and they usually are at full intensity in seconds.

[emmadoggy]

19. In our last house

(we just moved at the beginning of August), we had CFL's in most of our fixtures. Even in the bathroom where the light was often turned on only for short periods. We had installed the bulbs over 4 years ago and just before we moved we had seen our first bulb go out (in the bathroom fixture which was a six-bulb light).

Considering the somewhat short on/off cycles at times, I consider that to be pretty good longevity. Longer would be better, but I don't think over 4 years is bad at all in a frequent on/off situation.

I also don't consider the light quality to be bad. Some bulbs are better than others and I have a strong preference for the warm white variety, but if you buy a warm white with comparable lumens to an incandescent, any difference is barely noticeable.

I do look forward to innovations in LED bulbs, but for now, CFL's are working great for us.

[kristopher]

22. Savings from reduced demand on air conditioning are apparently included.

I took a minute to visit the MSI's website. In the FAQ is this:
What is the industry standard for A/C energy saved per watt of light energy saved?
1 to 3 ratio is the "industry standard".

Recent validated testing has conclusively proven that for every 1 watt of light energy saved, a ½ watt of secondary air conditioning savings is also achieved.

Note: It was originally expected that for every 1 watt of light energy saved, a 1/3 of a watt of secondary air conditioning savings would be achieved. However, based on results and observations from large volume retail installations in the states of Massachusetts and Florida, we have observed that for every 1 watt of light energy savings, one can expect half a watt of secondary air conditioning savings. As this data is specific to certain customers, we are unable to publish it. However, with an NDA we could discuss and share our findings.
http://www.msissl.com/en/35-faqs.html


Also, they offer a savings calculator, but you'll need some specific product data to use it.
http://www.msissl.com/en/savings-calulators.html

[FBaggins]

23. And what of losses?

They do, after all, also produce less heat during the winter.