Understanding the Return on Investment for a lighting retrofit project is critical to get management approval and buy-in. The process is very simple. To begin with, you'll need the following pieces of information:

• Quantity of existing HID fixtures
• Total Watts consumed by each existing fixture (400W MH consumes 454W total)
• Burn hours per year (number of hours the lights are on per year)
• Cost of Electricity per kilowatt-hour (kWh)

Your electric bill may have multiple charges per kWh in addition to fixed charges on every bill. In addition, the rate may change depending on the amount of electricity you use or the time of year. To get an accurate cost for your ROI analysis, you should add up the individual per kWh charges and average the variable charges throughout the year. For our base analysis, we use $0.10 per kWh. The Department of Energy lists average retail rates by state on their website.

Your utility company may also impose an additional charge based on the maximum amount of electricity your facility draws at any one time throughout the day. This is called a demand charge. A lighting retrofit project may be able to reduce this charge also if the total draw from your operations drops to a lower demand tier.