Payback Period of LEDs
Growers interested in purchasing supplemental or sole-source lighting need to be able to accurately predict the economics and cost of ownership for the many different types of fixture layouts and options available on the market. A useful financial estimate is the simple payback (or return on investment, ROI) of choosing one system over another. The ROI takes into consideration the initial capital costs as well as annual expenses required to run two different lighting systems. The calculation determines how many years until the two systems are equivalent to each other in terms of cost and when cash positive savings begin. Since LEDs cost less to operate there is a simple payback time in which the total costs between LED systems and legacy light systems become equal. This report presents a simple payback model using parameters and assumptions that the reader can alter at their convenience. Several of these parameters are changed to see how they impact the payback for two Illumitex LED fixtures compared to an HPS 1000W.
Table of Contents
- Model and Equations
- Payback Years Based on Electricity Cost and Photoperiod
- Cost Savings Over LED Lifetime
The three lighting systems compared in this study are the Illumitex Neosol DS, the Illumitex Power Harvest W10, and an average HPS 1000 W system. For the HPS fixtures, average values are used in the model to account for differences that might be seen based on brand or type of HPS light. Table 1 shows the PPF, Watts, and Cost for the Illumitex fixtures and average HPS fixture. Depending on the particular HPS, these PPF and prices may change slightly. Between the LED fixtures, the NeoSol has less PFF than the PowerHarvest, yet they are considered equal replacements in this report since the NeoSol contains additional optics that focus light toward the canopy, increasing photon density for certain applications.
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