Energy

Lighting Retrofit ROI

Calculate lighting retrofit payback including avoided maintenance savings, not energy cost alone, which understates the true return.

Current energy cost$/year, current lighting energy costEnergy savings ratefraction, energy cost reduction from the retrofit

Payback test

Maintenance savings$/year, avoided relamp/ballast maintenance costRetrofit cost$, one-time retrofit costEvaluation periodyears, the payback window the project must clear

Go$28,000/yr

Energy savings$24,000/yr

Payback2.14 yr

Continue Analysis

Based on your results, these related decisions are available.

Energy Efficiency Project Prioritizer rank the lighting project against other efficiency projects

Resources

Guide Energy Projects: Demand Charge to ROI Energy projects earn priority when they reduce the cost driver that actually appears on the utility bill.

How this works

A lighting retrofit's payback is usually pitched on energy savings alone, but the real annual savings also include avoided maintenance, fewer relamps and ballast replacements, once fixture life is factored in. An energy-only payback estimate understates the real return.

Key terms

Total annual savings: energy savings plus avoided maintenance cost, the full annual return the retrofit produces.

Assumptions

Energy savings rate and maintenance savings are stable across the evaluation period

Limitations

Single facility or zone, not a multi-phase rollout plan

Sources

Standard lighting-retrofit ROI and payback practice (DOE Advanced Lighting guidance framing).

Worked example

An energy-only estimate computes payback as $60,000 / $24,000 = 2.5 years. Including a $4,000/year maintenance savings correctly lowers payback to 2.14 years, both clear a 3-year window, but the energy-only number understates the true return.

Common use cases

Justifying an LED retrofit with the full annual return, not energy savings alone
Comparing retrofit payback against other capital-project options
Screening a retrofit proposal before a full facility audit