In any economic analysis, it is important to include installation costs,
operating costs and maintenance costs. Catalogs or vendors are the best source for
installation costs. They should include both the materials and the labor to
install a lighting project. If in-house labor can be used, then perhaps labor
costs can be ignored. For large projects, don't forget to include disposal costs
for any hazardous waste such as PCB ballasts.
To calculate operating costs for a lighting system, use the appropriate electric utility rate schedule; this can be especially helpful for complicated time-of-day rates and declining block rates. Operating costs are usually calculated on an annual basis. For life cycle cost analysis, assume a reasonable inflation rate. Utility rates are almost sure to rise in most areas of the country.
For life cycle cost analysis, the operating costs should also include the maintenance costs. This will include the material and labor costs of maintenance including replacing lamps and ballasts and cleaning fixtures. Spreadsheets and custom software make these calculations trivial and can be a real time saver. Calculate the simple payback for each recommendation with catalog or other ballpark prices. This first cut should reveal which measures are not economically feasible and thus will not be worthy of further investigation.
The remaining recommendations may well require further study. Be sure that the recommendation will work and that there are no hidden costs. For example, if you plan to install compact fluorescents in existing fixtures, run a small pilot program: try some actual lamps to be sure they will fit. If your recommendations include any changes to a ceiling, be sure the ceiling doesn't contain asbestos.
Consulting an individual or firm with lighting installation and construction experience can be very helpful at this point. Since you don't know the details of each recommendation, get several vendors to bid the work. When you get their proposals, rerun the calculations based on "real" pricing. Now rank the measures based on importance to the business, simple payback or any other factor that might be appropriate. Because of budget constraints, a multi-year plan might be appropriate.
And Furthermore . . .
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Lighting Analysis Software Reviewing Third Party Proposals |
Simple Payback Analysis Method Life Cycle Method |
