Cost and Payback of LED Lighting

There are more than enough reasons to upgrade to LED lighting. Rising energy costs, corporate carbon reduction targets and new regulatory requirements—such as the Energy Performance of Buildings Directive (EPBD)—are placing greater emphasis on reducing energy consumption and automating lighting systems. Modern LED lighting also offers significant benefits in terms of lighting quality, comfort and customisation.

Despite these advantages, the first question is often: “How much will an LED upgrade cost?” However, focusing solely on the initial investment rarely leads to the most cost-effective decision. What truly matters is the total cost over the system’s entire service life—also known as the Total Cost of Ownership (TCO).

With an attractive Return on Investment (ROI), the initial expenditure can often be recovered within just a few years through lower operating costs. However, ROI and payback period alone provide only a limited indication of an investment’s overall financial viability. By considering the Total Profit of Ownership (TPO), the question can be reframed from “How much will an LED upgrade cost?” to “How much value will an LED upgrade generate?”

Go to the Efficiency Check

TCO—What Does a Lighting System Really Cost?

Total Cost of Ownership (TCO) captures all costs associated with a lighting system over its entire service life. The principal cost categories are capital expenditure and operating costs, with the latter comprising energy and maintenance expenses. Capital expenditure includes the purchase price of the luminaires and lighting management components, as well as installation and commissioning costs.

Calculating energy costs is somewhat more complex. They depend not only on the system’s connected load and daily operating hours, but also on current and future electricity prices. Maintenance costs must also be taken into account. These can be calculated reliably for the full service life of the system through appropriate service agreements.

Compared with conventional solutions, however, LED luminaires require particularly little maintenance, with service lives of up to 100,000 hours.*

rauch Möbelwerke – LED Upgrade Forecast to Save Almost €900,000 per Year

The project implemented by rauch Möbelwerke demonstrates the potential savings an LED upgrade can deliver in practice. At its 103,000-square-metre headquarters in Freudenberg, the company upgraded all production, administrative and outdoor areas to modern LED solutions—including the TRILUX LiveLink Premium lighting management system—without interrupting ongoing operations. The installation includes 18.6 kilometres of E-Line continuous-row lighting, connected to a network and combined with presence and daylight sensors. The resulting reduction in lighting energy costs is forecast at approximately €74,000 per month, equivalent to around €888,000 per year. Based on the assumed 15-year service life outlined above, the forecast savings amount to approximately €14.5 million in total. Further information about the project is available in the blog article.

TRILUX Efficiency Check – Financial Viability at a Glance

How much could a specific project save by upgrading to LED lighting? The TRILUX Efficiency Check provides a quick and straightforward initial estimate. Based on a small number of details about the application and the existing lighting installation, the tool compares the current system with a potential upgrade solution and calculates the annual savings potential. Factors taken into account include luminaire wattage, operating hours, energy prices and the impact of a lighting management system. This allows different scenarios—such as various luminaire types with or without lighting management—to be compared objectively. Go to the Efficiency Check and try it for yourself.

Efficiency Check  Technical data—E-Line Pro | TRILUX