Connections Article Examines Cost Savings of LED Street Lights

A June 2012 Connections article discusses how municipalities are weighing the fiscal costs of converting their existing street lighting to light emitting diode (LED) lights versus the potential energy and maintenance savings that such a conversion can realize.  (Connections is a publication by T. Rowe Price.)

The article notes that LED lights have several benefits over more traditional high-pressure sodium (HPS) street lights, including:   less energy use, longer lifespan, and a more color sensitive light.

Upgrading to LED streetlights…can drive down typical municipal energy expenses anywhere from 40 to 60 percent, and with the cost of LED streetlights rapidly declining, a municipality’s hypothetical return on investment can be realized in as little as seven years on average.  …

Seattle, Los Angeles, Anchorage, Washington, D.C., and a host of smaller cities have already overcome the hurdles to push forward with LEDs. On their side is the certainty that the new lighting systems will pay for themselves over time. “In Anchorage, where we worked with the city in developing the LED streetlights, we originally anticipated a 50 percent annual energy savings, but are now realizing 60 percent and counting,” says Justin Sternberg, managing director of Continuum Industries, an Anchorage-based lighting efficiency developer for municipal, utility, and military applications.

However, the article also notes that it can be hard for municipalities to invest the upfront infrastructure expenditures necessary to make the switch, especially in the current economic situation.

Nonetheless, it remains hard for many municipalities to bite on the concept because the upfront costs of a streetlight overhaul can be daunting. Not only does a city need to purchase the LED fixtures—for example, Seattle City Light, a publicly owned electric power utility and part of the Municipal Solid-State Lighting Consortium under the U.S. Department of Energy, is currently installing 41,000 LED lights at a cost of $220 apiece—but there’s also the added operational expense of replacing the current HPS fixtures.  …

Even with costs going down, many municipalities remain strapped for capital, and buying and installing streetlights to replace ones that have worked fine for years can be a game of political football. Just ask municipalities like Cleveland and Richmond, California, whose LED streetlight initiatives have gotten bogged down in all sorts of red tape.

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