The next step is to calculate the actual cost savings associated with these demand and energy savings. The total annual savings is the sum of the demand cost savings and the energy cost savings. The cost fors installing this type of retrofit will vary. Equipment and labor costs for installation should both be considered. Once you know these costs you may evaluate the attractiveness of the project using any of the normal financial measures.
Simple payback is probably the most common.
This type of analysis will apply to most situations. Your operating hours and energy costs may be different but the calculations used in this example will still apply. Advantages Compact fluorescent lamps are much more efficient than incandescent lamps and they burn much cooler. This results in tremendous energy savings and a quick payback. In addition, compact fluorescent lamps last 4 to 5 times longer than incandescent lamps.