Home > SUPPORTS > Cost-benefit analysis

Cost-benefit analysis

The introduction of LEDs has led to a rush among customers, architects and specifiers to use the new technology in new and modernized buildings.

However, thought should be given when deciding to use LEDs as not all applications are suitable for an LED installation.  For example, the higher cost of an LED luminaire compared to one using a conventional lightsource may not be recouped during the installation’s lifetime.  Therefore, a total cost of ownership approach is crucial, analyzing investment in luminaires, energy costs, lamp shift costs, maintenance costs and others.  Also, sensors should be taken into account, since they will reduce energy costs and increase the lifetime of a luminaire further.  In most cases, an LED solution’s annual costs including capital costs are lower than that of a conventional solution. 



The illustrations above explain the principles of total cost of ownership.  The initial investment in the LED installation often be higher than a traditional lighting installation, but the LEDs' lower energy consumption and maintenance cost may provide a lower total cost over the lifetime of the installation.