# LIFE CYCLE COS PAYB AC K PE RIO 1. Turiel, B. Atkinson, S. Brown, A. Denver, D. Fisher, S. Hakim, and J. McMahon Technology Assessment and Marketing Group

Energy Analysis Program Lawrence Berkeley National Laboratory Fluorescent Lamp Ballasts Workshop

March 18, 1997 

# LIFE CYCLE COST PAYBACK PERIODS I. Turiel, B. Atkinson, S. Brown, A. Denver, D. Fisher, S. Hakim, and 

### J. McMahon Technology Assessment and Marketing Group Energy Analysis Program Lawrence Berkeley National Laboratory Fluorescent Lamp Ballasts Workshop March 18, 1997 1

# Objectives of Analysis.'

BERKELEY LAE 

### #1 Perform LCC & Payback Period Analysis for 12 lamp/ballast combinations using average parameter values Lamp Types F40T12/RE F40T12/ES F32T8 F96T12 F96T1 2/ES F96T12HO F96T12HO/ES Ballast Types

Energy Efficient Magnetic (EEM) Cathode Cut-out (CC) Electronic Rapid Start (ERS) Electronic Instant Start (EIS)

- ..... 

# Objectives of Analysis #1 Perform LCC & Payback Period Analysis for 12 lamplballast combinations using average parameter values lamp Types 'F40T12/RE

F40T12/ES F32T8 F96T12 F96T12/ES F96T12HO
, F96T12HO/ES Ballast Types lamps/Ballast Energy Efficient Magnetic (EEM)} 1 and 2 Cathode Cut-out (CC) Electronic Rapid Start (ERS)} Electronic Instant Start (EIS) 1, 2, 3,**~nd** 4 ' '

# ~~ 2Elect

### ric ity Co st (1995$/k h). 

### Commercial Industrial Ballast Prices

,BERKELEY,-LAB;-""Ii

# Changes in Key

. Parameter 

### Ballast Lifetime (hrs) 

### Lamp Life (hrs): with CC Ballast 

### Electricity Cost (1995$/kWh): 

### C'ommercial Industrial· Ballast ·Prices

## ~ ... 

# aram ter Previous 33,000 

### same as EEM 

# alu s Present

45,000 -, 

### reduced by 

### 150/0 . 0.075' 0.075

0.05 0.0.48 8ft CC=$72 8ft CC=$4'9
3

# Avera g e Annual Lamp Oper ating Hour s

B allast 

### Sector Old New F 6T12 F96T1 2/E Comm 4170 Ind 4080 4000 F 6T12HO & 2HO/ES Comm 4470 Ind 5050 All Others Comm 4230 3600

BERKELEY LAB 

# Average Annual Lamp Operating Hours
Ballast Sector Old New' F96T12 & F96T12/ES Comm 4170 3600 Ind 4080 4000 F96T12HO & F96T12HO/ES Comm 4470 4000 Ind 5050 5000 All Others Comm 4230 3600

' ....

# f~_ 4

# ctive s #2 Sensitivity Analysis for 4 Major Parameters
• Electricity Price Ballast Price 

### Ballast Lifetime Operating Hours

'6,ERKELEY . 

# . Objectives 

# ofAnalysis (nt'd)

. . . 

## #2 Sensitivity Analysis 

## for 4 

## Major Parameters . • Electricity Price

.. • Ballast Price • Ballast Lifetime

.. • Operating Hours
5

# fife-Cycle Cost Sensitivity Analysis

( 1 995$, 8% Discount Rate)

Commercial Sector 2 F40T12/ES. EEM CC ERS 2 F96T12/ES EEM EIS Operating Hours

low avg high
147 203 421 145 197 403 146 198 402 Ballast Life(hrs ) Ballast P rice($)

low avg high S1 av S2
169 203 233 204 203 202 172 197 226 198 197 196 168 198 224 193 198 199 305 359 408 359 359 358 302 349 393 343 349 351 E lectricit y ric (io/k love v i
163 203 263 161 197 252 163 198 250 288 359 464 287 349 442 

# Life-Cycle Cost Sensitivity Analysis (1995$,8% Discount Rate)
Operating Hours low avg high Ballast life(hrs) low avg high Ballast Price($) Electricity Price(C!:/kWh) Ballast System S1 avg S2 low avg high Commercial Sector 2500 3600 ,BOOO 33000 45000 60000 5.5 7.5 10.5 2 F40T121ES

EEM 147 203 421 169 203 233 204 203 202 163 203 263 CC 145 197 403 172 197 226 198 197 196 161 197 252 ' ERS 146 198 402 168 198 224 193 198 199 163 198 250 2F96T121ES

EEM 261 359 739 305 359 408 359 359 358 288 359 ' 464 EIS ' 257 349 708 302 349 393 343 349 351 287 349 442**,~**

# ~ 6

# rence iii.

(Ele cti rerN a 

## EEM) 

# a st s r_verage D e lta(pri ce) _ $ 2 8.9 4 - $1 2. 44 = $16 . 50



## 1 S ens itivity Delta(pri ce) = 0 . 85 ( $2 8. 94) - 1 . 0 6($ 1 2. 44 )

_ $1 1 .4 0 

## Sensitivity 2 Delta(price) = 1O5($28

## ' 94 - 0.95($12.44) _ $18.57 

## New LRI Survey Delta(price) = $22.40 - $11.50 = $10.90

B,ERKEL $ . p:! I 

# Price Difference £ 

# r 2· 40T 12 Ballasts (Electronic**~** 

## EEM) , • ,Average Delta(price) = 

### $28.94 -. $12.44 = 

### $16.50 

## • Sensitivity 1 'Delta(price) =' 

### 0.85{$28.94) - 1006($12.44) 

# = $11.40 

## • Sensitivity 2 _ D,elta(price) 

# = 1005($28'.94- 0.95($12.44) 

# = $18'057 

## • New LRI Survey Delta(price) 

# = $22.40 .. $11.50 

# = $10.90 7

# Frequency of M i* nimu

for F40T12 Lamp s 

# Frequency of MinimumLCC . for 

## F40T 12 Lamps

>. () 25 - 20 - c 15- Q) .:::1 CT 10- Q) '- LL 5- 0.-.- EEM 

### cc Ballast 24

ERS 8HERKELEYLAB 

## • Averag e Value R u 

## ts S ensitivity Res Ranges from 2.7 to 9.5 years for E

9 

# Summary ofPa back esults (F40. 12).


## • Average Value Results for Payback Period . - Ranges from 

### 5.9.10 6.6 years for ERS ballasts 

## • Payback Period,Sensitivity Results

- Ranges**fr~m** 

### 2.7 to 

### 9.5 years for ERS ballasts·

9

# Frequ ency of Minimum LCC

( F96T12 & F96T 12/HO)

BERKELEY `.. LAB 1 0 - .....

# ~~ Frequency of Minimum LCC (F96T12 & F96T12/HO) 18 18 18 - 16 - 14 - >.. o 12**~** 10- ::::l. . 

### c- 8-**~** 6- u.. 4 2 - 0 0**o----~--~~~~** EEM CC ERS Ballast EIS 10

# Uinnary of Paybac k

(F96T12 & F96T12 1H0) Average Value Res u I c 

## for i a

## yback Ranges from,2.17 to 3

. 

### 3 E 

### ' l. T 

### z , 

### ballasts 

## Payback Period Sensitiv ity Re sul ts

- Ranges from 1.0 to 6.6 years for ERS ballasts

'HEHKEL£Y,'L

' Bj 11 ' ..... 

# . SUmmary of

# Payback Results . (F96T12 

## & 

## F96T12/HO)


## • Average Value Results for Payback Period .- Ranges from 2.7 to 3.3 years for ERS ballasts 

## • Payback Period 

## Sensitivity Results . - Ranges from 1.. 0 to'6. 6 years for ERS ballasts

# ~- 11

# Objectives of Analysis (cont'd) #3 Develop method for calculating payba c%ll,^ period that will account for unequal lamp lifetimes with different ballasts

- F40T 12 lamp with an Energy-Efficient Magnetic Balla st • lamp lifetime = 'I 9 , 000 hours



### - F40T12lamp with a Cathode Cutout Ballast • lamp lifetime = 16 , 150 hours 12 BERKELEY LAS 

# Objectives of Analysis (cont'd) ,

, , 

## #3 Develop method for calculating payback**,~**

# E~A ,period that will account for unequal lamp lifetimes with different ballasts

- F40T12 lamp with an Energy-Efficient Magnetic Ballast

41 lamp lifetime = 19,000 hours



### - 'F40T 12 lamp with a Cathode Cutout Ballast
41 lamp lifetime = 16,150 hours 12

## Becau s e CC ball asts reduce Tr) I I, fe

compared to the baseline EE--(, b)

H,E! 71 Q E L E Y

,:, L fAf B. 

## payback period is difficult to calr - a 

## te

13 

# Payback Period £ r 

# CC allasts

; - 

# Problem:

.

Because CC ballasts reduce lamp life

. . 

# . compared to the baseline EEM ballast, payback period is difficult to calculate

- .' 13

/

# Payback Period for CC Bal lasts

• If the incremental operating cost is constant, the payback equation is P ayback = -Delta(purchase price

Delta(operating cost) 

## • If incremental operating cost is not constant, there is no single, well-defined equation for payback 14 

# Payback Period for CC Ballasts • If the incremental operating cost is constant, the payback equation is

Payback 

# = -. Delta(purchase price) Delta(operating cost) 

## • If incremental operating cost is not constant, there is ,no single, well-defined equation for payback 1420

.15

-10 -15 Delta Elect Delta Lamp D elta B allast Cumulative Delta ()

. Exam ple 1: Cumulative Cash Flow Differences Assuming Lamp Replacements at. Sa e i e .for 2F'4 12/ 1 5 ' .... 

# . Payback Calculation, C 

# B 

# l1asts·

20**~--------------------------------------~**

. 15 c:l Delta Elect**.f;*:;:::::~1** Delta Lamp 1ai! Delta Ballast 10**~~~~~~~~~~~~~~~~CumulativeDeHa** en· '-·5 Cd 

### - 

## - 

# 8 0**-5+-~--~-~~~------"'~----~~~~-\I** ';'10 -15 L...-___**~**_____ """"__ ________ __=i...__I Year

# ~~- .Example 1: Cumulative Cash Flow Differences Assuming Lamp Replacements at.Same Time for 2F40T12/ES 15

# Payback Calcul ation , CC allasts Diff 

# o I ni t i al P u rc h ase Installati on Expense $35.55 $4 1. 97 Annual E le ct ricity E x pense ($/yr) $19.55 17.1 Lamp R e p l a cement Cost (in years 5.3 & 10.6) $14.78 $14.78 Payb ack P eriod (yrs) Example 1: F or 2F40T 12/ES, Assuming Lamps R eplaced at Same Time

Ifrrrrrr] 1 6 

# Payback Calculation, CC Ballasts Difference EEM Initial Purchase & Installation Expense $35.55 Annual Electricity Expense ($/yr) $19.55 Lamp Replacement Cost (in years 5.3 & 10.6) $14.78 Payback Period (yrs) CC $41.97 $17.81 $14.78 {CC.. EEM}

.$6.42

$-1.74 $0.00 3.7 Example 1: For 2F40T12/ES, Assuming Lamps Replaced at Same Time

' ....

# ~~- 166 RKELEY ^L`;,as. 1.41 Example 2: Cumulative Cash Flow Differences Assuming Lamp Replacements at Different Times for 1/ 17 

# Payback Calculation, CC allasts

20**~--------------------------------------~** 15+---------------- U) ltI.- «S


## . (gr- 0

________________ __ -15 c:J Delta Elect i""""'?":iJ Delta Lamp**~** Delta Ballast**~** Cumulative Delta

-20 11..--______ ------ __ 

### -------------0 

### Year Example 2: Cumulative Cash Flow Differences Assuming Lamp Replacements at Different Times for 2F40T12/ES 17

# Payback for CC Ballasts

Annual Lamp Cost Approach
• Calculate annual lamp replacement cost For EEM, annual lamp cost = $14.78/5.3yrs = $2.79/yr For CC, annual lamp cost = $14,78/4.5yrs = $3.28/yr 

## • Include lamp costs in operating costs Delta(operating costs) = ($19.55+$2.79) - ($17.81+$3:28) _ $1.25/yr Payback period = $6.42/($1.25/yr) = 5.1 yrs 1 8 B ERKELEYELAB -""", 

# Payback for CC Ballasts Annual Lamp Cost Approach • Calculate annual lamp replacement co·st -, ForEEM, annual lamp cost 

## = $14.78/5.3yrs 

## = $2.79/yr 

### .-' For CC,

. annual lamp cost = 

### $14.78/4.5yrs = 

### $3.28/yr 

## • Include lamp costs in operating costs Delta(operating costs) 

## = ($19.55+$2.79) - ($17.81**+$3~28)** 

### == 

### $1.25/yr Payback period = 

### $6.42/($1.25/yr) = 5.1 yrs

# .!~- 18Ope rati ng 1 rs Ballast Pri ( ) [ 1 B alla st e low. av high v lo 9 i - Commer cial Sect or 2500 3600, 8000 5.5 7.5 10.5 ' EEM 1 7.3 5.1 2.3 5.4 5.1 4.8 7.0 5.1 3.6 ERS .5 5.9 2 .7 4.1 5.9 6.6 8.0 2EEIM 1 / EIS 7. 5.41 2.4 3.6 5.4 ^ 6.2 7,4 o

;BERKELEY LAB 1 9 

# ayback Sensitivity Analysis ( rs) Operating Hours B.allast Price($) Electricity Price(e/kWh) Ballast System low. avg. high S1 avg S2 low avg high Commercial Sector 2500 3600· 8000 5.. 5 7.5 10,,5 ·2 F40T121ES EEM CC 7.3 5.1 2.3 . 5.4 5.1 4.8 7.0 5.1 3.6 ERS 8.5 5.9 2.7 4.1 5.9 6.6 8.0 5.9 .4.2 . 2 F96T121ES EEM EIS 7.8 5.4 2.4 3.6 5.4 .6.2 7.4 5.4 3;9**-~**

# !.~ 19

# Supplemental Info n ma 

# Supplemental Information

20

# Discounted Cumulative Cash Flow

Differences for F4OT 12/ES (Lamp Replacements at Different Times)
Delta Ballast Delta Lamp Delta Elect X....... Cumulative Delta ($)

21 BERKELEY LAS - ....

# f~_Discounted Cumulative Cash Flow Differences for 

# F40T12/ES (Lamp Replacements at Different Times) 15......-----............... ---------,**10-+-------~** 5 U)I

### m 

## = 0 ·0 0

C -5 III Delta Ballast

____ ---I**t:~t~M** DeltaLamp 1:1 Delta Elect**H------f:::::::;:~:1---1** ···K····· Cumulative Delta ($)

-10-1---------1:::::1---------1 -15-'-----------------' 

### Year ·21

## C C (using Average J alues)

C Sensitivity Results • P ayback -Period (using Average Values) • 0 

## Payback Period Sens itivity Re sults Form^l atinn of N ew Payback P: iiod for CC io 

## .la

....... 

# Analyses rfonned All Lamp Technologies

.



## - .·LCC (using Average Values) -LCC Sensitiyity Results • Payback Period (using Average Values)
- .Payback Period Sensitivity Results· • .Formulation ofNew Payback Period for CC

.. Ballasts**~~** ... .22

# ary of LCC Results (F40T12) Minimum LCC (using Average Values) energy-efficient magnetic options are never the minimum LCC cathode cutout ballasts when used with 2F40T1 2 or 2F40T 12/ES lamp • electronic ballasts when used with 1 F40T 12 or 1F40T12/ES lamp 23 BERKELEY LAB 

# Summary of LCC Results (F40T12) Minimum LCC (using Average Values)**~ energy~efficient**  

### magnetic options are never the minimumLCC 

### • cathode cutout ballasts when used with 2F40T12

. or 2F40TI2/ES 

### lamp 

### • electronic ballasts when used with IF40T12 or IF40T I2/ES 

### lamp
23

## Averg7-- L 

## Val

I 

## electronic . ba ll asts are always the ME" MIM 'Um

24 ;BkR KELEY. "' . . 

# Summary of C Results (F96T12'& F96T12/HO) 

## ·Minimum·LCC (using·Average Values)

. electronic ballasts are always the minimum LCC

- .

-"'I>

# ~~- 24

# ary of LCC Results (F32T8) Minimum LCC (using Average Values)
• energy efficient magnetic ballasts are the. minimum LCC for 1-lamp F32T8
• electronic ballasts are the minimum LCC for 2-, 3-, or 4- lamp F32T8
25 BERKELEY LAB . . 

# Summary of LCC Results (F32T8) Minimum LCC (using Average Values)

- energy efficient magnetic ballasts are the minimum 

## Lee for 1-lamp F32T8

.. 

### -electronic ballasts are the minimum 

## Lee for**2~,** 

### 3... , 

### or 4- 

### lamp F32T8
25

# uency

for '3 2T8 Lamps

OEM

13 El7kELEY L}CE 26 

# •

Frequency of 

# Minimum for F32T8 Lamps**~** .. 25 - 20 - >. o c 15- CD :J 

# g 10 lIi.... LL . 5 -'. 0- 23

5 1 EEM CC ERS EIS Ballast 26

# ary of Payback Results (F32T8)

• Average Value Results for Payback Period - Ranges from 5.1 to 7.7 years for ERS ballasts 

## • Payback Period Sensitivity Results Ranges from 2.3 to 11.1 years for ERS ballasts

2 7 BERKELEY LAB 

# Summary of Payback Results (F32T8)

- Average Value Results for Payback Period·

- Ranges from 5.1 . to 7.7 years for ERS ballasts 

## -Payback Period Sensitivity Results -. Ranges from 2.3 ·to 11.1 years for ERS ballasts

271 stab fi `il $35
- 55 $41.97 $6.42 ^^ !r Eactricky I: (/yr) $1 9. 55 $ 1 7.81 $-1.74 Replacement Cost (in years 4e Lamp Replac e men t Co st (in years 5.3 10.6) $14-78 $0.00 $-14.78 Payback Period (yrs)

,B,EEtKELEY .LA B'. 28 

# . Payback 

# alculation

: .

Payback· Period (yrs)

. . . 5.1
28

## Electronic Ballast Shipments by Lamb

4ft T8 4ft T12 8ft T12 8ft T1 O 

## ape

29 

# Electronic Ballast Shipments by Lamp Type

100-w------------------.

90 '. 80

U) 

# - 5i 70**.~** 60 .c

. U) 50 

# - o . 1: 40**~** 30 

# - CD Q. 20 10

o 4ftT8 4ft T12 8ft T12 8ft T12HO 1993 1995

29