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5. Cost


LEDs for general use are not expensive, costing several cents per unit. For use in applications such as traffic signals, higher-brightness units are used, with resulting higher costs. Furthermore, as discussed above, green LEDs are much more expensive than red and amber ones: $.65 for green InGaN LEDs compared to $.20 for the AlInGaP red LEDs. Because of these cost differences, and the higher number of LEDs required for green and yellow signals, most LED traffic signal heads in place are red, with the remaining colors still using incandescent lamps.

Of course, since each signal head still likely uses at least several dozen LEDs, combined with a electrical system for powering the signal and an optical system for combining and focusing the light output, the cost of an LED signal head far exceeds the conventional $2.50-$3 cost for a replacement incandescent lamp. Assembly of LED signal heads or any other LED luminaire assembly is labor-intensive, requiring a great deal of soldering, assembly and quality assurance work. When first introduced, red LED signal heads cost $750; this cost was reduced to $350 by 1993, and to $230 in 1995. Now, yellow LED signal heads can be purchased for $145, while the red signal heads can be purchased for $110 (Haussler, 1997; Lundberg, 1997a; Stahl, 1997; Suozzo, 1998). In comparison, green signal heads cost between 2.5 and 5 times more than red ones (Lundberg, 1997b; Snel, 1997).

A number of electric utilities and public agencies offer or have offered financial incentives to municipalities that install LED traffic signals, including Pacific Gas and Electric, the Colorado Public Service Company, San Diego Gas and Electric, the Sacramento Municipal Utility District and Pacific Power and Portland General Electric (Vargas, 1994; Snel, 1996; Wyland, 1996; Deemer, 1997; Suozzo, 1998). This incentive often takes the form of rebates which partially cover the initial costs of purchasing the signals. Still, the high initial cost of LED traffic signal heads appears to be a significant barrier to wider use of this technology.

As discussed above, the operating costs of LED traffic signals are much less than that of corresponding conventional signals, largely because of reduced energy costs. Maintenance costs are also lower, largely because LEDs have much longer rated lives than the incandescent lamps used in traffic signals. LEDs are often reported to have lives of over 100,000 hours (Bierman, 1998b), in comparison to the 8000-hour life of an incandescent traffic signal lamp (Snel, 1996). When incorporated into traffic signal heads, the claimed life of the products may range from 5 to 30 years, with 10 years being the most common estimate (Delean, 1996; Miller, 1996; Pollack, 1996; Deemer, 1997; Haussler, 1997; Stahl, 1997; Kiely, 1998). This compares to the usual life of the incandescent signal lamp between 1 and 2 years (Vargas, 1994; Delean, 1996; Pollack, 1996; Deemer, 1997; Haussler, 1997; Stahl, 1997).

Few installations have existed long enough to independently verify these life estimates, so municipalities tend to be cautious when projecting the life of LED traffic signals. For example, Caltrans, the California state transportation agency, generally discounts potential savings due to lower maintenance costs because they perform regular maintenance at all intersections several times per year (Lundberg, 1997b). In addition, although operating lives of the LED signals might be many years, degradation in light output might shorten the useful life of the signal, if at some point its intensity is reduced sufficiently. One study by Caltrans showed that LED traffic signal intensity was reduced 27% lower than its initial intensity after 2 years (Wyand, 1996).

The variations in LED signal life estimates, and in the economic payback periods outlined in the previous section of this report all point to the fact that different jurisdictions use different assumptions in comparing costs.

Potential consequences

Different assumptions must be made to carefully calculate life-cycle costs, thus such costs are rarely considered when estimating the potential savings of LED traffic signal installations. Many claims of simple payback, for example, as well as claims of operating life, are inconsistent or simply outdated. In short, purchasers and specifiers of LED traffic signals appear to lack objective, comprehensive information required to make decisions.

Options and recommendations

A shift in thinking toward life-cycle costs, rather than strictly energy savings, or life comparisons, would improve the ability of specifiers to make informed decisions. In addition, however, technologies such as LEDs should be compared not only with the incandescent lamps currently used in conventional signals, but also with reduced-wattage incandescent lamps that might become a low-cost alternatives to LEDs due to reduced luminous intensity requirements. In areas with low electricity costs, life-cycle costs calculated for the implementation of LED traffic signals could perhaps be significantly closer to those calculated for signals with lower wattage incandescent lamps. Other technologies have been considered as alternatives to incandescent lamps in traffic signals, including cold-cathode fluorescent lamps, electroluminescent panels, and high frequency powered fluorescent lamps (Suozzo, 1998). Each of these potential options should be considered as the results of visibility-related research become available.

A progressive cost analysis of LED traffic signal costs by geographic region, with appropriate sensitivity analysis to correct for potentially inaccurate life and maintenance cost assumptions, should be performed, with comparisons to all viable and potential technologies. Such an analysis could provide better estimates of cost savings due to LED traffic signals, and also could guide future research by identifying those factors which are most sensitive to small changes. For example, if the life-cycle costs of LED traffic signals are not much different whether the operational life of LEDs in signals is 10,000 or 100,000 hours, then research on such characteristics might not be as critical as other factors.


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