The IES's recommended practice is based on Life Cycle Cost/Benefit Analysis (LCCBA), a principle widely used in managerial economics.
The Illuminating Engineering Society of North America (IES) released a new publication titled Recommended Practice for the Economic Analysis of Lighting. Officially known as RP-31-14, the report seeks to provide a framework for evaluating economic decisions related to lighting.
Across the industry, the variability in economic analysis, such as calculating return on investments, payback times, estimates of energy conservation and other factors inherent in selecting from a variety of lighting designs, causes confusion among clients and designers and everyone else. IES RP-31-14 may go a good distance toward providing a baseline for understanding and evaluating economic factors in lighting system design.
Most important, IES said in the release announcing the publication, is gauging the profitability of a capital investment in a lighting system that can be objectively compared to other competing capital investments.
Life Cycle Cost/Benefit Analysis (LCCBA), the most robust among analytical methods, is accepted by experts in managerial economics from all industries and accordingly, is the economic analysis method recommended by the IES in the new publication. “The distinguishing and superior feature of this second-level method is that it includes the time value of money. First-level analysis methods are also covered so that the lighting professional can understand why their use is not encouraged.”
RP-31-14 is available in print or as a PDF download from the IES at www.ies.org/store. IES Recommended Practices are written to accomplish a lighting design and are based on accumulated knowledge and experience, and provide in-depth treatment of generally accepted criteria about specific lighting applications.