ROI and Financing
Return on Investment Calculation Example
A National Building supplies company needed to refurbish old lighting in their plastics cutting warehouse. The warehouse is in use from 6 am until 7.30pm Monday to Friday and 6 am until 1 pm on Saturdays. The warehouse was fitted with 119 aging 400watt Metal Halide fixtures at a 9 meter mounting height.
Using lighting simulation software it was established that the fixtures could be replaced like for like using Exled’s HBL-200-XT High bay fixture
The Return on investment calculation showed the following result based on 3 years:
Although the ROI figures were good, the up front cost of buying the replacement HBL-200-XT High efficiency LED fixtures plus the contractor’s labour charges were outside the available Capex budget. The total cost to replace all 119 fixtures was £30,464. The customer, therefore, chose Exled’s rental option. Under this agreement, the lights were supplied on the basis of 1 months’ rental in advance plus 35 further monthly rentals. Exled arranged the installation of the new lighting fixtures and this was included in the total finance package.
Total borrowing £30,464 (Included contractors installation charge) 1+35 Profile
Initial payment £954.31
Followed by 35 monthly payments of £954.31
Under this arrangement the customer has brand new lighting installed. They are saving £1,079.00 per month on energy bills and paying out £954.31 each month on lighting rental. The High Bay lights supplied come with a 7 year manufacturer’s warranty, at the end of the 3 year rental period, the customer has the option to pay £100 and take full ownership of the lights. The energy savings will obviously continue as long as they are using the lights.