The basic formula
Annual savings ≈ (old watts − new watts) × number of fixtures × hours per year × your cost per kWh ÷ 1,000. Payback ≈ project cost (after incentives) ÷ annual savings.
Example
Replace 100 fluorescent troffers drawing about 90 W each with 35 W LED panels, running 3,000 hours a year: that's 55 W × 100 × 3,000 = 16,500 kWh a year. Multiply by your all-in electricity rate to get annual savings.
What improves payback
- Long run hours (warehouses, retail, 24/7 spaces)
- Occupancy and daylight controls
- Replacing HID high-bays and parking lot lights
- Incentives, where available — check Save on Energy programs before work starts
Don't forget maintenance
LEDs last far longer than fluorescent or HID lamps, so relamping labour largely disappears — a real saving in high ceilings.
Quick questions
Retrofit kits or new fixtures?
Kits are cheaper and faster in good housings; new fixtures make sense when old ones are damaged or you want a new look.
Do LED retrofits need a permit?
Yes — fixture and ballast changes are electrical work and should be filed with ESA.
Will the light quality be different?
Usually better: higher colour rendering, no flicker, and a colour temperature you choose.
