1. SPARTA | Fall 2014 LED Retrofit Capabilities at MSU (Revisited)

2. 2 SPARTA | Fall 2014

3. 3

4. 4 CCT: 2800K CRI Average: 86 Calculate CCT (Measured)Declare CCT (Manufacturer) CCT: 4100K CRI Average: 65 Current Lamp: F32T8

5. 5 SPARTA | Fall 2014 CCT: 3400K CRI Average: 84 Calculate CCT (Measured)Declare CCT (Manufacturer) CCT: 4000K CRI Average: 80 Proposed Lamp: CREE LED

6. 6 SPARTA | Fall 2014 F32T8 (104W Measured) LED Fl. Fixture Comparison From 3 fluorescent bulbs to 2 LED bulbs Equivalent lighting lux

7. 7 SPARTA | Fall 2014 Color Comparison F32T8CREE LED UR 2-48

8. 8 SPARTA | Fall 2014 General Characteristic and CCT & CRI Comparison Note: The CRI determines how close the bulb is to the CCT Measure Spectra to Calculate CCT and CRI Declare CCT to Calculate CRIManufacturer Specs F32T8UR 2-48F32T8UR 2-48F32T8UR 2-48 CCT2800K3400K4100K4000K4100K4000k CRI868465807880 F32T8UR 2-48 Lifetime (hours)24,00050,000 Warranty (years)2.5-37 Replacement (years)410 Capital Cost/Fixture$6.51$90-$140

9. 9 SPARTA | Fall 2014 Feasibility Per Fixture Comparison F32T8UR 2-48 Annual Energy Use (kWh)644286 Annual Energy Cost 10446 ($/year/fixture) Installation Labor Rate Per Fixture $2.30$4.60 Replacement (years)410

10. SPARTA | Fall 2014 Psychology Bldg. Lighting Study Goal: To develop a case study that demonstrates where, and in what use cases, LED System retrofits make the strongest impact in campus buildings Use load data and other project information gathered to develop an LED Investment Sensitivity Study with

11. 11 SPARTA | Fall 2014 Psychology Bldg. Lighting Study Installation Expenses UnitCost/UnitVol.Total Expense Materials UR 2-48-48-45L-40K-S-FD CREE LED (Shipping Not Included) fixture$90.1291$8,200.92 Labor Expense Installer/Electricianfixed hourly$23.9691$2,180.36 Installation Overhead % direct installation 14.8%-$322.69 Total---$10,703.97 Project Scope: Currently monitoring 1 st and 2 nd floor hallway lighting for baseline load Retrofit 91 hallway fixtures with UR 2-48-48-45L-40K-S-FD kits at lowest quoted price Monitor post installation load to display impact

12. 12 SPARTA | Fall 2014 LED Investment Sensitivity Study Sensitivity Analysis: The study of how different sources of uncertainty in key inputs can lead to unexpected output values in a model or system. Our model uses: 1.Discounted Cash Flow (DCF) model pre-vetted by the DOE EERE to asses the expected return of energy efficiency upgrades 2.AIC/BIC to measure goodness of fit for input variable distributions 3.Monte Carlo to run controlled simulations – iterations = 10,000 randomized samples/sim Application to LED Investments: Asses stress viability of LED retrofit investments in campus buildings across Key Simulation Inputs using the Psychology Building Lighting Study scenario

13. 13 SPARTA | Fall 2014 Key Simulation Inputs: Installation Labor Time (mins) UR 2-48 Pricing (USD) Annual Utility Rate Escalation (Average, %) Inflation Rate (Average, %) Real Discount Rate (%) Time Fixtures are on (Average, %) Outputs Tested: Lifetime (10yr) Net Present Value (NPV, USD) Payback Time (PBT, yrs) Baseline Model: Establishes NPV and PBT outputs in the Discounted Cash Flow (DCF) model using a set of verified baseline inputs Used to benchmark simulations against LED Investment Sensitivity Study

14. 14 SPARTA | Fall 2014 Baseline Model Installation Expenses Total Direct Cost$10,381 Total Indirect Cost$323 % of Direct Costs Sales Tax Applies100% Total Installed Cost$11,327 Baseline Model LED System Performance Gains Degradation (%/year)1.00% Expected Returns (kW)5.28 First Year Annual Savings (kWh)46,262 Key Simulation Inputs for Baseline Model Installation Labor Time (mins)60 UR 2-48 Pricing (USD)$90.12 Annual Utility Rate Escalation (Average, %) 1.44% Inflation Rate (Average, %)1.74% Real Discount Rate (%)3.50% Time Fixtures are on (Average, %)100% LED Investment Sensitivity Study Baseline Model: Each Input value has a part in developing the baseline DCF model’s intermediate outputs, PBT and NPV LED System Performance Gains: Expected Returns are provided by finding the load reduction between current system and the CREE LED Retrofit at Psychology Bldg.

15. 15 SPARTA | Fall 2014 Intermediate Outputs for Baseline Model Effective Tax Rate0.00% Credit Basis - Fed$11,326.85 Credit Basis - State$11,326.85 Nominal Discount Rate5.30% First Costs$11,326.85 Adjusted Installed Costs$11,326.85 NPV(Nominal,Costflow))$0.00 NPV(Nominal,Output))338,066.30 NPV(Real,Output))368,928.11 Payback Time (yrs)2.94 LED Investment Sensitivity Study

16. 16 SPARTA | Fall 2014 LED Investment Sensitivity Study Simulation Process: Gather Data Sets for Simulation Inputs Perform Distribution fits on Simulation Inputs Assess distribution fits using Akaike Information Criterion and Bayesian Information Criterion Select Best Fitting Distribution for each Simulation Input Parameterize the Simulation Perform simulation runs on each individual input using Monte Carlo analysis methodologies over an iteration range of 10,000 randomized samples/sim Snap-shot of a simulation run in the DCF model (The ‘Time Fixtures are on’ Input is currently running in this shot)

17. 17 SPARTA | Fall 2014 Simulation Input Reference Table Percentil e Installation Labor Time (mins) UR 2-48 Pricing (USD) Annual Utility Rate Escalation (Average, %) Inflation Rate (Average, %) Real Discount Rate (%) Time Fixtures are on (Average, %) 1%0.6$90.19-3.4%-14.0%2.7%11.7% 5%3.7$90.44-2.4%-8.4%3.1%18.0% 15%11.1$91.12-1.5%-2.7%3.8%27.9% 25%18.9$91.92-1.0%-0.5%4.5%35.6% 35%27.0$92.86-0.6%0.7%5.2%42.4% 45%35.5$94.00-0.2%1.8%5.9%48.2% 50%40.1$94.770.0%2.3%6.3%51.1% 65%55.4$97.480.5%3.8%7.5%59.6% 75%60$100.311.0%5.1%8.5%66.4% 85%60$105.111.5%7.2%10.0%74.3% 95%60$117.212.3%12.7%12.4%87.2% 99%60$141.313.4%18.4%15.3%96.2% Used to: Assess variation in Outputs Assess overall model sensitivity Assess investment viability given a significant degree of simulated uncertainty in the inputs Note: Simulation Input percentiles are to be paired with the Output percentiles and Spider Plots LED Investment Sensitivity Study

18. 18 SPARTA | Fall 2014 LED Investment Sensitivity Study Payback Time Output - Payback Time (yrs) PercentileBaseline Installation Labor Time (mins) UR 2-48 Pricing (USD) Annual Utility Rate Escalation (Average, %) Inflation Rate (Average, %) Real Discount Rate (%) Time Fixtures are on (Average, %) 1%2.942.262.942.892.94 10 5%2.942.302.952.912.94 10 15%2.942.342.962.94 10 25%2.942.472.982.952.94 8.17 35%2.942.563.012.962.94 6.88 45%2.942.663.032.972.94 5.71 50%2.942.713.052.982.94 5.42 65%2.942.893.123.002.94 4.91 75%2.94 3.193.012.94 4.41 85%2.94 3.313.032.94 3.94 95%2.94 3.613.062.94 3.37 99%2.94 4.213.092.94 3.05 Note: Simulation Input percentiles are to be paired with the Output percentiles and Spider Plots

19. 19 SPARTA | Fall 2014 LED Investment Sensitivity Study

20. 20 SPARTA | Fall 2014 Note: Simulation Input percentiles are to be paired with the Output percentiles and Spider Plots LED Investment Sensitivity Study Net Present Value Output - Lifetime NPV(USD) Percentile Baselin e Installation Labor Time (mins) UR 2-48 Pricing (USD) Annual Utility Rate Escalation (Average, %) Inflation Rate (Average, %) Real Discount Rate (%) Time Fixtures are on (Average, %) 1%$18,406 $13,468$13,246$67,548$19,585-$7,853 5%$18,406 $15,793$14,202$41,888$19,042-$5,966 15%$18,406 $16,960$15,090$26,355$17,931-$3,034 25%$18,406 $17,424$15,630$22,086$16,981-$753 35%$18,406$18,606$17,697$16,105$19,956$16,036$1,269 45%$18,406$19,079$17,888$16,518$17,632$14,699$3,005 50%$18,406$19,281$17,958$16,722$16,959$14,224$3,866 65%$18,406$19,856$18,142$17,316$15,561$13,291$6,391 75%$18,406$20,211$18,233$17,824$13,938$12,200$8,411 85%$18,406$20,553$18,310$18,448$11,644$10,824$10,776 95%$18,406$20,879$18,375$19,484$7,043$8,731$14,590 99%$18,406$21,012$18,399$20,828$3,682$6,595$17,285

21. 21 SPARTA | Fall 2014 LED Investment Sensitivity Study

22. 22 SPARTA | Fall 2014 LED Investment Sensitivity Study What does all of this mean: For Payback Time (PBT): Despite a large range of variation in Simulation Inputs there is little deviation away from the Baseline Model Outputs - when excluding ‘Time Fixtures are on’ This tells us that with even rather extreme amounts of uncertainty over vital Model Inputs - the Investment in LED systems remains at most, an on Average 9% above our Baseline Model’s PBT of 2.94yrs or otherwise 3.20yrs - when excluding ‘Time Fixtures are on’ Range of Simulation Inputs (MAX–MIN) Installation Labor Time (mins)59 UR 2-48 Pricing (USD)$51.12 Annual Utility Rate Escalation (Average, %)7% Inflation Rate (Average, %)32% Real Discount Rate (%)13% Time Fixtures are on (Average, %) 85% Average Deviation from Baseline (%) - PBT Installation Labor Time (mins)-9% UR 2-48 Pricing (USD)9% Annual Utility Rate Escalation (Average, %)1% Inflation Rate (Average, %)0% Real Discount Rate (%)0% Time Fixtures are on (Average, %) 115%

23. 23 SPARTA | Fall 2014 LED Investment Sensitivity Study

24. 24 SPARTA | Fall 2014 LED Investment Sensitivity Study What does all of this mean: For Net Present Value (NPV): Like the PBT outputs - a large range of variation in Simulation Inputs seems to show little in terms of deviations away from the Baseline Model Outputs - when excluding ‘Time Fixtures are on’ Again, this tells us that with even rather extreme amounts of uncertainty over vital Model Inputs - the Investment in LED systems remains, on Average, 2.4% below our Baseline Model’s Lifetime NPV of $18,406 at $17,960 - when excluding ‘Time Fixtures are on’ Range of Simulation Inputs (MAX–MIN) Installation Labor Time (mins)59 UR 2-48 Pricing (USD)$51.12 Annual Utility Rate Escalation (Average, %)7% Inflation Rate (Average, %)32% Real Discount Rate (%)13% Time Fixtures are on (Average, %) 85% Average Deviation from Baseline (%) - NPV Installation Labor Time (mins)6% UR 2-48 Pricing (USD)-6% Annual Utility Rate Escalation (Average, %)-9% Inflation Rate (Average, %)20% Real Discount Rate (%)-23% Time Fixtures are on (Average, %) -78%

25. 25 SPARTA | Fall 2014 LED Investment Sensitivity Study

26. 26 SPARTA | Fall 2014 Psychology Bldg. Lighting Study: Monitoring 1 st and 2 nd floor hallway lighting for baseline load at 5min logging increments Lights in the hallway have been on 100% of the time Minute s LED Investment Sensitivity Study

27. 27 SPARTA | Fall 2014 Avg. Energy Use Reduction of 55% per Fixture over Fluorescent Tubes Use ≥ 51% ON PBT ≤ 5yrs Use ≥ 90% ON PBT ≤ 3.5yrs LED Investment Sensitivity Study Significant Findings (Holding all other inputs constant at Baseline):

28. 28 SPARTA | Fall 2014 LED Investment Sensitivity Study Time Fixtures are on (Average, %)PBT (yrs) 48.2%5.71 51.1%5.42 59.6%4.91 66.4%4.41 74.3%3.94 87.2%3.37 96.2%3.05 Significant Findings (Holding all other inputs constant at Baseline):

29. 29 SPARTA | Fall 2014 Avg. Energy Use Reduction of 55% per Fixture over Fluorescent Tubes Use ≥ 51% ON NPV > $42/fixtur e Use ≥ 90% ON NPV > $169/fixture LED Investment Sensitivity Study Significant Findings (Holding all other inputs constant at Baseline):

30. 30 SPARTA | Fall 2014 LED Investment Sensitivity Study Time Fixtures are on (Average, %) Per-Fixture Lifetime NPV (USD) 48.20%$33.02 51.10%$42.48 59.60%$70.23 66.40%$92.43 74.30%$118.42 87.20%$160.33 96.20%$189.95 Significant Findings (Holding all inputs constant at Baseline):