Case History: Essay: By Invitation

Case History: Essay: By Invitation 2017-01-07T18:36:44+00:00
Topics A-O
Topics P-Z

Case Histories: Educational/Institutional Lighting

Essay: By Invitation

How many people would be aghast were I to say that, since day one, the lighting industry has been improperly calculating the cost of electric illumination? And how many would be shocked to hear that the variance between a traditional cost-of-lighting calculation and the real calculation is often on the order of 500 percent, 1000 percent, or more? Well, prepare yourself: The calculations we have been using are seriously out of line with what they should be, and perceptions of lighting are harmed as a result.

We can begin with the premise that electric illumination is not installed to provide light. Light is merely the mans to the end. Instead, electric illumination is installed to help people perform their visual tasks, anything from word-processing or assembling machine components, to exiting an off-ramp at night or parking a car in a shopping center lot.

The better suited lighting is for the visual tasks, people, and spaces involved, the more effectively people can perform their visual tasks; i.e., the more effective lighting is. And as it so happens, lighting effectiveness–not lighting efficiency–is the single-most significant factor when evaluating the cost of lighting. Why? Because lighting that is not optimally effective costs significantly more than lighting that is, irrespective of the annualized ownership cost or the ongoing costs of operation and maintenance (O&M).

Consider this hypothetical example:

An office employs 100 word processors who cost (wages/fringes, FICA) $27,500 each per year. The connected lighting load in the space where they work is 28kW. The lighting is operated 10 hours per day, five days each week. Overall annual utility charges amount of $6,000. Maintenance costs add another $2,000 annually. The company installs a new High-Benefit Lighting® system; that is, a system designed to optimize performance of visual tasks while minimizing energy waste.

The new system cuts utility charges by 50 percent, and the company saves $3,000 per year. Additionally, because the system is designed to accommodate the needs (some varying) of the tasks, workers, and space involved, word processors now perform their tasks 3 percent faster than before and make 5 percent fewer errors. As a consequence of the value of the time saved, the company spends $100,000 less in labor costs each year to produce the same amount of output. However, when you look at that $100,000 per year savings from the opposite point of view, you realize that the existing system comprised a hidden cost of $100,000 per year–the value of the productivity and error reduction that was not realized.

Is the concept just a PR gimmick conceived to underscore the importance of High-Benefit Lighting? Not at all. Given that improved lighting achieves improved results, and given that improved results have a calculable dollar value, improved lighting creates a financial benefit. Therefore, unimproved lighting creates a financial detriment whose value equals that of the potential benefit. But seldom, if ever, do we talk about the “hidden cost of lighting.” And until we bring that hidden cost out of hiding, lighting users will not appreciate what electric illumination is really installed to do, nor the value of having an electric illumination system that provides optimal effectiveness.

Thanks to the efforts of the National Lighting Bureau, hypothetical calculations of the hidden cost of lighting are not necessary. The Bureau has collected a number of case histories over the years.

Consider data derived from an indoor lighting retrofit completed several years ago at Colonial Park Plaza, a Harrisburg, PA shopping mall.

In essence, had the improvements not been made, the owners would not have realized $3.4 million worth of benefit each year, meaning that they would have continued to pay a hidden lighting cost of $3.4 million annually. In this case, mall management was aware of High-Benefit Lighting and what it could do for them, and they decided to move forward with the investment. They probably would not have done so were they interested solely in O&M cost savings. On the latter basis, the investment in new lighting would not have achieved simple payback for 6.1 years. Because they eliminated the hidden cost of lighting, they achieved a simple payback in 5.5 days.

True, it’s easy to protect O&M cost savings to the penny and all but impossible to develop such accurate projections for the value of additional benefits (productivity, accident prevention, etc.). In fact, that fear or inaccuracy may be a principal reason why the hidden cost of lighting stays hidden. However, those who really understand electric illumination know what optimal lighting conditions should be for any given space, and they can also evaluate the extent to which the existing system provides optimal conditions.

If a retrofit or replacement will improve conditions, it will, perforce, lower the hidden cost of lighting. To quote exact numbers for the value involved would be misleading. But it would be just as misleading to not consider the hidden cost at all. As such, those called upon to evaluate an existing system should at least cite some conservative estimates to indicate how much more an existing system costs because it fails to deliver optimal conditions.

As in the case of Colonial Park Plaza, it’s one thing to say “your existing system costs $12,745 per year to operate and maintain, plus an additional million dollars or more as a consequence of unrealized benefits.” The latter comment is accurate, informative, and is almost guaranteed to generate discussion about issues the client needs to know about; i.e., that lighting effectiveness is far more important than lighting efficiency, and both can be provided through High-Benefit Lighting.

When the hidden cost of lighting becomes hidden no longer, people will begin to understand what it is that electric illumination is really installed to do, how better electric illumination can help them, and why an investment in High-Benefit Lighting can result in so much more than energy savings alone.

Richard V. Morse is Lithonia Lighting’s Vice President for Marketing Communications in their Conyers, GA headquarters. Morse has served as Chairman of the National Lighting Bureau for the past 4 years.

Reprinted with permission from IESNA. Taken from LD+A, February 1998, “Essay by Invitation.”