DOE Consortium introduces financial tool for LED street lights

The US DOE has released a financial analysis tool that allows municipalities and utilities to calculate the cost of a retrofit LED-based street light installation including rebates, loan costs, energy savings and return on investment.
The US Department of Energy’s (DOE) Municipal Solid-State Street Lighting Consortium has released an economic cost-benefit analysis tool designed to help cities, utilities, and other organizations estimate the cost and impact of switching to LED-based street lighting.
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.


Using the spreadsheet, users can input data 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 – and receive a detailed analysis that includes annualized energy-cost savings, maintenance savings, greenhouse gas reductions and simple payback period.


This information is useful not only for planning, budgeting and applying for financing. The DOE estimates that the cost of LED street lighting has dropped more than 25 percent in the past year, so it is important to have a tool that calculates savings in today’s currency.
The DOE has also estimated that 26.5 million streetlights in the US consume as much electricity each year as 1.9 million households, and generate greenhouse gas emissions equivalent to that produced by 2.6 million cars.


“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 street lighting, by providing specific key information on costs and return on investment.”


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 independently. The tool can be used by municipalities and utilities, whether they purchase and install their own streetlights or contract out the work. The tool includes an instructional video and sample analysis.


The financial tool complements the Model Specification for LED Roadway Luminaires that was published by the consortium in October.