City of Lawrence
TRAFFIC ENGINEERING DIVISION
MEMORANDUM
TO: Charles Soules, Director of Public Works
Shoeb Uddin, City Engineer
FROM: David Woosley, Transportation/Traffic Engineer
DATE: 18 February 2009
SUBJECT: LED (Light Emitting Diodes) Cost Savings Analysis
Background
The City of Lawrence Traffic Engineering Division was the first in Kansas to start using LED lamps in traffic signals and the first to require their use in all new traffic signal installations and upgrades. Our program began in the mid-1990’s. At that time we began replacing all existing “red” indications with LED’s because they are the most critical and contributed to a substantial amount of overtime. The city policy is to call-in a traffic signal technician during non-working hours to repair any “red” indication that burns-out. In addition, when LEDs first became available for traffic signals, the “red” indication was the least expensive. To date, nearly 71% of all the traffic signal indications in the city are LED and all new installations are 100% LED.
Cost and Service Life
The cost of an incandescent traffic signal bulb is approximately $4.50 with a service life of approximately two years and must be replaced at that point in time. The cost of an LED traffic signal module is approximately $85 with a service life of approximately 8 years; therefore, all analysis in this memo will be based on a life span of 8 years. Material cost for incandescent light bulb over a span of 8 years will be $18.00 ($4.50 x 4). By using linear extrapolation, annual material cost for an LED and incandescent signal indications are $10.63 ($85.00 / 8) and $2.25 ($18.00 / 8) respectively.
Energy Use and Cost Savings
Traffic signal incandescent bulbs use approximately 135 watts of energy. Traffic signal LED modules use approximately 15 watts of energy. An analysis of energy charges at three intersections that are currently 100% LED has been conducted comparing invoices from one month in 2001 (the oldest available) with one month in 2008 and is shown in the chart below. The intersections are 15th Street & Iowa Street, 25th Street & Iowa Street and Clinton Parkway & Kasold Drive. It should be noted that the energy charge is only part of the charges at each location; it does not include the customer charge, fuel charge, property tax surcharge, transmission charge, environmental charge and franchise fee.
|
Location |
Year |
Annual Cost |
$ Saved |
Average Annual Savings |
|
15th Street & Iowa Street |
2001 / 2008
|
751.69 / 121.63 |
630.06 |
$730 |
|
25th Street & Iowa Street |
2001 / 2008
|
846.00 / 105.14 |
740.86 |
|
|
Clinton Parkway & Kasold Drive |
2001 / 2008
|
972.84 / 144.49 |
828.35 |
The average annual savings computes to $730 at each of these intersections. However, in 2001, these three intersections already had the “red” indications converted to LEDs; therefore the actual savings of an intersection with 100% LED modules compared to 100% incandescent bulbs would be greater. It is estimated that the actual energy savings is approximately $975 annually per intersection at these three intersections. These three intersections shown in the table above have an average of 64 signal indications. Therefore, it is estimated that the annual energy savings of an LED compared to an incandescent signal indication is $15.23 ($975.00 divided by 64).
Total Estimated Savings
There are 85 signalized intersections in Lawrence, Kansas with a total of 3740 (44 x 85) signal indications. To date, approximately 71% or 2,656 signal indications have been converted to LED with 1,084 signal indications remaining as “incandescent”.
Annual material cost for each LED is higher than “incandescent” by $8.38 ($10.23 - $2.25). The higher cost of materials will be offset by the estimated annual savings of $15.23 in energy costs and will result in a net annual savings of $6.85 ($15.23 - $8.38).
Based on a life cycle cost analysis, although there is a net savings when “incandescent” signal indications are converted into LED, the relatively larger initial expenditure associated with LED makes it a difficult proposition. Following is a break-down of costs and savings to determine the pay-off period for the higher initial investment in material cost required for conversion to LED.
Material Cost to convert one signal indication to LED: $85.00
Energy Savings per year per signal indication after converted to LED: $15.23
Material cost for incandescent per year: $2.25
Therefore, total savings per signal indication per year if converted to LED: $17.48
Based on these estimates, it appears that the relatively larger initial investment in LED will be paid-off by the accrued savings in about 5 years ($85.00 divided by $17.48).
The estimated annual net savings by the LED lights currently in use is $18,193.60 ($6.85 x 2656).
If the remaining 1,084 signal indications are converted to LED, there will be additional annual net savings of $7,425.40 ($6.85 x 1,084), for a total net savings of $25,619.00 ($18,193.60 + $7,425.40) every year. Also, there will be additional savings (difficult to quantify in dollar value) in staff time as LED lights require less maintenance and last much longer.
Estimated Future Cost for Conversion to LED
Material Cost: ($85.00 x 1,084) $92,140.00
Labor cost and contingency: $20,000.00
Total Project cost: $112,140.00
If funded, City Staff will perform the actual task of conversion; therefore, there will be no up-front labor cost associated with this project.
As shown earlier, the material cost for LED will be paid off by the energy savings in approximately 5 years.
Funds needed to complete conversion to LED: $112,140.00
Staff is currently working on the application for “State and Local Energy Efficiency Grant” under the “American Restoration and Recovery Act of 2009” to complete the conversion of all remaining traffic signal lights to LED.