There is a bit of investigation that needs to be done before you can correctly identify the absolute best lighting system for your property. Trying to select the right lighting system without doing a bit of research beforehand is like trying to hit a bullseye on a dartboard while blindfolded.

By doing some simple life-cycle cost analysis, we can help you maximize the return on your investment in lighting systems. Some lighting systems have tradeoffs between short term and long term gains, and these tradeoffs demand your attention. Selecting the most efficient and cost effective lighting system for your property is crucial because the wrong choice could siphon money off your income. Fortunately, we provide simple worksheets to aid you with life-cycle cost analysis.


Determining Life Cycle Cost Analysis

This simple sheet is divided into three main sections: system information, initial costs, and annual costs. It will help you weigh the advantages and disadvantages of two proposed lighting systems by helping you iron out upfront costs and forecast long term savings. To begin, you need to know the expected lifespan of the equipment, how often you will use the lighting system, and your cost of electricity.

Next, the sheet requires that you identify the initial costs of the lighting systems, such as the actual cost of the lighting, the installation costs, any cooling needed for the lighting system, and rebates or tax credits. Understand that if you are comparing an LED system to any traditional lighting system, the LED costs are almost always going to be higher initially.

Lastly, it’s time to chalk up the annual costs of each system, but there is a lot more to consider than only annual energy expenditures. You also need to account for maintenance, cooling, and lamp replacement. This is one area where LEDs excel due to the small amount of power they consume.

System Information System 1 System 2
1 Lighting System Life (in years)
2 Annual Operation (in hours) Same as System 1
3 Electricity Cost (per kilowatt hour) $ Same as System 1
4 System Wattage (in kilowatts)
Initial Costs System 1 System 2
5 Lighting System Equipment $ $
6 Lighting System Installation (labor & materials) $ $
7 HVAC System $ $
8 Subtotal $ $
9 Subtract utility rebates and/or tax credits $ $
10 Total Initial Cost $ $
Annual Costs System 1 System 2
11 Electricity (lines 2 x 3 x 4) $ $
12 Lamp Replacement $ $
13 Ballast Replacement $ $
14 Luminair Cleaning $ $
15 HVAC Cooling $ $
16 Total Annual Cost $ $
17 Total Cost of Ownership (lines 9 + (1 x 15) $ $

Determining Return on Investment

This sheet, which is also very simple to use, will help you quantify just how much money you are saving for any given lighting system. By projecting total costs, both short term and long term, we can help answer the question, “Which lighting system will provide the highest return on my investment?”

By accounting for various costs, the calculation can help you discover two key pieces of information. Firstly, you can calculate the total cost of your new lighting system. Secondly, this handy sheet will help you discover your annual savings. These two figures will aid you by quantifying the payback period for your new lighting system, and ultimately, the return on your investment.

Unfortunately, some businesses and property owners forgo this process when selecting a new lighting system. Instead, they take someone else’s quote at face value and are shocked when they find the return on their investment was less than they expected. Don’t leave it to chance – work with BSC Custom to find the lighting system that is the best fit for your organization.

1 New Lighting System Equipment Costs $
2 Lighting System Installation (labor & materials) $
3 Utility Rebates and/or Tax Credits $
4 Total Cost of New Lighting System (line 1 + 2 – 3) $
5 Existing Lighting System Wattage (in kilowatts)
6 New Lighting System Wattage (in kilowatts)
7 Kilowatt Hours Saved (line 5 – 6)
8 Annual Operation (in hours)
9 Kilowatt Hours Saved (line 7 x 8)
10 Electricity Cost (per kilowatt hour) $
11 Annual Savings (line 9 x 10) $
12  Payback Period (in years) (line 4 ÷ 11) $
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