Visual Economic Tool

Transcription

1 Acuity Brands introduces the new Visual Economic Tool designed to help customers use standard industry practices to perform a comprehensive analysis and comparison of total lighting system costs. It s time for more than just payback

2 Calculate The Visual Economic Toolhas an easy-to-use interface that provides the flexibility to quickly calculate and compare total life cycle costfor up to three lighting systems. Choose Customers can choose to perform simple energy-only estimates or input additional information and create estimates that include maintenance, controls and HVAC. Compare Calculated results include simple payback, plus life cycle costs, net present value and internal rate of return. These second-level analysis methods provide a better evaluation to the owner because they account for the time value of money and the total cost over the life of each lighting system.

3 May 2012 Introduction Energy Costs & Savings HVAC Costs Maintenance Costs Life Cycle Cost Internal Rate of Return Net Present Value Simple Payback

4 Luminaire Select a photometric file for desired product Enter Luminaire Cost Enter Installation Time A product with a higher initial cost can be the least expensive solution when the total life cycle cost is lower due to energy savings and reduced maintenance costs. Installation Rate is entered in the Labor Rates section and is applied to all lighting systems

5 Lamp Select a Lamp Type Enter Lamp Cost Enter Lamp Disposal Cost Ballast Select a Ballast Type Enter a Ballast Quantity Enter Ballast Cost Enter Ballast Disposal Cost A longer lamp life and ballast life can result in lower maintenance costs due to fewer lamp and ballast replacements.

6 Maintenance Select a Relamping option Enter Maintenance times Enter a Cleaning Cycle Rates for maintenance costs are entered into the Labor Rates section and apply to all lighting systems A product that is quick to service can result in decreased maintenance costs and significant reduction in total lighting system cost. A product that requires service be performed using special equipment and several people (i.e. high mounting heights) can dramatically increase the maintenance costs and the total lighting system cost.

7 Controls Select Control Type Enter Control Cost Enter Installation Time Each lighting system can include up to four separate control options. Each control can either reduce the energy used or the amount of time a lighting system is operational. Some control types may adversely reduce lamp life, this can be accounted for by entering a reduction of lamp life factor.

8 More than simple Life Cycle Cost Net Present Value Internal Rate of Return Visual Economic Tool These 2 nd level analysis methods provide a better evaluation of the value of a lighting system to the owner than simple payback. Simple payback does not account for the time value of money. An economic analysis is only has comprehensive as the data provided. More accurate information provided results in a more realistic total system cost.

9 Help Review definitions Find resources View calculation formulas

10 Save and Print Save analysis data to open later or to a clients Generate reports to print or make PDF files to send to clients To generate a PDF file you will need to install a PDF converter and printer driver. The recommended PDF writer can be download from

11 Life Cycle Cost Life cycle costis calculated by determining initial cost such as the cost of new luminaires and controls as well as annual cost such as the cost of electricity to power the luminaires and maintenance to insure that they are in working order. These future annual costs are converted from their future value into their present value and summed. Combining the initial costs and the present value of each year in the life cycle gives the total life cycle cost. You can read more about economic analysis for lighting systems in RP-31 or in section 18 of the 10th edition of the IES lighting handbook.

12 Net Present Value Net present value(npv) prescribes a value in today's dollar of making a decision of one system over another. NPV sums the discounted annual cash flows over the life cycle of the system. A typical retrofit system compared to an existing system would have a large negative cash flow initially, then positive cash flows the following years as energy and maintenance savings are realized. The option with the highest NPV can be said to be the most economically viable.

13 Internal Rate of Return The internal rate of return (IRR) attempts to remove the uncertainty in the assumption of interest rate. The IRR is the 'annualized effective compounded return rate' or the rate of return that makes all cash flows equal to zero. The IRR is determined using an iterative process similar to how the Excel IRR function works. If an IRR is greater than the 'owners cost of capital' than the IRR indicates that this option is economically viable.

14 Simple Payback Simple payback attempts to determine the number of years it will take to accrue enough annual savings to offset the initial investment. Years to Payback = (initial investment) / (annual savings) Simple payback does not account for the time value of money and should not be used as the sole criteria for go/no-go analysis when comparing multiple systems. Simple payback does not answer the question is a certain investment profitable?. Simple payback doesn t consider what happens after the investment is repaid.