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DOE municipal lighting consortium releases tool to evaluate costs of switching to LED lights


From the February 10, 2012 issue of Public Power Daily

Originally published February 10, 2012

The U.S. Department of Energy’s Municipal Solid-State Street Lighting Consortium yesterday released an economic cost-benefit analysis tool to help cities, utilities, and other organizations estimate the costs and impacts of switching to streetlighting that uses light-emitting diodes.

Called the Retrofit Financial Analysis Tool, the Excel-based tool was developed in collaboration with the Clinton Climate Initiative and is available for download at www.ssl.energy.gov/financial-tool.html.

"Converting our nation’s streetlights to LED technology not only could reduce our energy consumption significantly, but also improve the quality of illumination," said Consortium Director Edward Smalley of Seattle City Light. "The Retrofit Financial Analysis Tool will make it easier for cities, utilities, and others to analyze the cost benefit of LED streetlighting by providing specific key information on costs and return on investment."

This information can be useful not only for planning and budgeting purposes, but also in applying for financing, DOE said. In a market where the cost of LED streetlighting has dropped more than 25% just in the past year, it can help cities accurately evaluate costs in today’s dollars.

The tool is based on one that the Clinton Climate Initiative developed for analyzing cities such as New York, Los Angeles, Mumbai, and Beijing. The original tool required someone from the climate initiative to run it, due to its complexity. The consortium teamed with the climate initiative to develop a simplified, more user-friendly version that cities could use on their own.

The tool can be used by various types of owners, whether they purchase and install their own streetlights or use outside resources through a bid item contract.

Users input data on the relevant variables for their particular application – such as the incumbent technology, quantities, phase-in period, prevailing electricity and labor rates, sales tax, installation cost, loan interest rate, and rebates – to get a detailed analysis that includes annualized energy-cost savings, maintenance savings, greenhouse gas reductions, and payback.

Ranking among the biggest fixed costs for cities, streetlights are on all night long, 365 days a year. The estimated 26.5 million streetlights in the United States consume as much electricity each year as 1.9 million households, and generate greenhouse gas emissions equal to that produced by 2.6 million cars, DOE said.

Solid-state lighting has the potential to save more energy than traditional lighting technologies and can reduce maintenance costs, while improving visibility and customer service, DOE said.

Cities, power providers, and others who invest in street and area lighting are invited to join the consortium and share their experiences. The goal is "to build a repository of valuable field experience and data that will significantly accelerate the learning curve for buying and implementing high-quality, energy-efficient LED street and area lighting," said Smalley.

DOE created the consortium in 2010 to help cities with their efforts to pursue energy-efficient lighting, particularly in evaluating LED streetlight products. The new financial tool complements the Model Specification for LED Roadway Luminaires published by the consortium in October. 

To download the financial tool or to view an instructional video, see www.ssl.energy.gov/financial-tool.html. More information about the consortium is posted at www.ssl.energy.gov/consortium.html.

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