We previously learned how LED uses less power than other lighting technologies, but how does that translate to energy and money saved?

First, it’s important to understand how electricity is measured. A kWh, kilowatt-hour, is a unit used to quantify how much electrical energy a building uses over a certain period of time. It is analogous to miles driven in a car. If you are traveling for an hour at 60 miles per hour, how far do you travel? You travel 60 miles.

Similarly, kWh’s are accumulated by using power at a certain velocity or rate (measured in kilowatts) for a certain amount of time. If you use 10 kilowatts for an hour and then 20 kilowatts for another hour, your building would have consumed 30 kilowatt-hours(kWh).

This concept can be can be extended to understand how to calculate energy savings from LED lighting. If an older technology light uses 400 watts (i.e. 0.4 kilowatts) and runs for 4,000 hours per year then that light uses 1,600 kilowatt-hours in a year. If a new LED light uses 100 watts (i.e. 0.1 kilowatts) and runs for the same amount of hours (i.e. 4,000) then that light uses 400 kilowatt-hours a year. With the old light using 1,600 kilowatt-hours and the new LED light using 400, the new light saves 1,200 kilowatt-hours over the course of a year.

Calculating the dollars saved is then as simple as multiplying the kilowatt-hours saved by the building’s electric rate. If a building has an electric rate of $0.10 per kWh then the money saved from 1200 kilowatt-hours saved is $120 per year.

When receiving LED proposals for your building, look for these three factors discussed to be realistic: power rating (of new and old lights), annual run hours, and electric rate. These factors combine to produce the estimated energy savings of converting to LED lighting.

In another LED Ed Mini Series, we will briefly review how to determine a building’s electric rate. For more detail on energy savings see Enlighten’s blog post *What Are kWhs, and How Can I Save Them?*