Compare the electricity used by your existing lights and a proposed LED installation, then estimate simple payback from the project cost. Use the actual input watts, operating schedule and electricity tariff for each option.
Calculate and compare lighting energy costs
Open the electricity calculator with the office example
The link loads 200 lights at 60 W, eight hours a day, 250 days and USD 0.13/kWh. These are illustrative inputs. Calculate and save the existing installation as a scenario. Then change watts to 12, calculate and save the LED option. Compare the energy costs and download the two scenarios from the inventory.
Open the electricity load inventory with its default example. Enter your own quantities, power, hours, days and tariff.
LED savings formulas
Energy (kWh) = quantity × input watts ÷ 1,000 × hours per day × operating days. If operating schedules differ, calculate the existing and proposed installations separately.
Energy savings = existing kWh − proposed kWh. With the same flat energy tariff, cost savings = energy savings × price per kWh. With different tariffs, subtract the separately calculated energy charges.
Simple payback in years = net project investment ÷ annual net savings. Specify whether investment includes fixtures, installation, controls, disposal and any confirmed incentives. If you include maintenance savings or added operating costs, show those assumptions separately from electricity savings.
If annual savings are zero or negative, there is no positive simple payback from those savings. Simple payback excludes the time value of money and is not a complete investment appraisal.
Worked example: office lighting
Assume 200 existing 60 W fittings and proposed 12 W fittings, each operating eight hours on 250 days per year. The illustrative tariff is USD 0.13/kWh and the net upgrade investment is USD 1,400. Assume suitable lighting performance has been checked separately.
- Existing energy: 200 × 60 ÷ 1,000 × 8 × 250 = 24,000 kWh/year.
- Proposed energy: 200 × 12 ÷ 1,000 × 8 × 250 = 4,800 kWh/year.
- Energy reduction: 19,200 kWh/year.
- Energy-charge reduction: 19,200 × 0.13 = USD 2,496/year.
- Energy-only simple payback: 1,400 ÷ 2,496 = 0.56 years, about 6.7 months.
Six LED replacement scenarios
Every row below uses hypothetical inputs, a USD tariff and an annual operating schedule. These wattages are arithmetic examples, not certified equivalent lamp replacements. Payback uses energy savings only.
| Quantity × watts before → after | Annual schedule | USD/kWh | Saved kWh/year | Saved USD/year | Investment USD | Payback years |
|---|---|---|---|---|---|---|
| 200 × 60 → 12 W | 8 h/day × 250 days | 0.13 | 19200.00 | 2496.00 | 1400.00 | 0.56 |
| 30 × 50 → 8 W | 5 h/day × 365 days | 0.15 | 2299.50 | 344.93 | 450.00 | 1.30 |
| 10 × 60 → 9 W | 3 h/day × 365 days | 0.20 | 558.45 | 111.69 | 80.00 | 0.72 |
| 50 × 40 → 18 W | 10 h/day × 260 days | 0.18 | 2860.00 | 514.80 | 1250.00 | 2.43 |
| 20 × 150 → 30 W | 6 h/day × 300 days | 0.12 | 4320.00 | 518.40 | 1000.00 | 1.93 |
| 100 × 100 → 40 W | 12 h/day × 365 days | 0.10 | 26280.00 | 2628.00 | 5000.00 | 1.90 |
Check equal lighting performance before comparing watts
A lower wattage does not prove that the replacement meets the same lighting need. Compare appropriate light output, distribution, maintained light level, glare and color requirements. Use input power for the complete luminaire, including driver or ballast losses, rather than an assumed lamp-only rating.
For occupancy sensors or dimming, use a measured or defensible operating profile. Do not count the same reduction twice by lowering both average input watts and the operating fraction for the same effect.
LED savings questions
Should I divide the LED watts by power factor?
No. If the input is measured real power in watts, use those watts directly in the energy calculation. Power factor affects the relationship between real power, apparent power and current; it is not a multiplier for kWh when real watts are already known.
Which electricity tariff should I enter?
Use the rate applicable to the energy being displaced. Fixed charges, demand charges, taxes, tiered prices and time-of-use rates may require separate treatment. The example tariff is not a current national average.
Should I use 365 days for an office?
Use the actual annual operating days. The office example uses 250 days; a continuously occupied site may have a different schedule. Separate seasonal schedules if necessary.
Does the calculation guarantee savings?
No. The results follow the inputs. Validate the operating hours, input power, lighting performance and tariff, then compare measured energy after installation under comparable conditions.
Can I compare costs in Colombian pesos?
Yes. In the electricity inventory, select COP and enter the tariff in COP/kWh. Use project cost and annual savings in the same currency when calculating payback. Currency selection does not convert exchange rates.
For the distinction between power and energy, see the U.S. EIA explanation of watts and kilowatt-hours.