Int J Life Cycle Assess (2016) 21:137–145
DOI 10.1007/s11367-015-1000-x
ENVIRONMENTAL LCC
Life cycle cost comparison of high-pressure sodium
and light-emitting diode luminaires in street lighting
Leena Tähkämö 1 & Rami-Samuli Räsänen 2 & Liisa Halonen 1
Received: 31 October 2014 / Accepted: 6 November 2015 / Published online: 26 November 2015
# Springer-Verlag Berlin Heidelberg 2015
Abstract
Purpose Cities and municipalities are facing a great challenge
in 2015 when the widely used high-pressure mercury lamps
are banned from the European Union market. This results to
approximately 18 million lamps to be changed to other light
source technologies suitable for outdoor lighting. The most
probable replacement technologies are high-pressure sodium
and light-emitting diode luminaires. The article provides eco-
nomic information for the cities and municipalities to use
when making the decision on the choice of technology.
Methods A life cycle cost analysis was conducted for the
high-pressure sodium and light-emitting diode luminaires in-
cluding the investment costs, operating costs and residual val-
ue over 30-year time frame. The investment costs included the
purchase prices of all parts, freight and installation costs. The
operating costs accounted for the energy and maintenance
costs, and the residual value was calculated using the 25 %
estimate of the initial purchase price. The approach of the
calculation considered only the luminaires to be installed;
the scope of the study excluded the previous installations,
which may contain any light source technology or be inexis-
tent. The analysis excluded the poles, wiring and other infra-
structure. A sensitivity analysis additionally studied six
Responsible editor: Hanna-Leena Pesonen
* Leena Tähkämö
leena.tahkamo@aalto.fi
1
Lighting Unit, Department of Electrical Engineering and
Automation, Aalto University, P.O. Box 13340,
00076 Aalto, Finland
2
Center for Knowledge and Innovation Research, School of Business,
Aalto University, P.O. Box 21230, 00076 Aalto, Finland
scenarios, in which relevant calculation parameters were
changed.
Results and discussion The life cycle cost analysis of the two
road lighting luminaire technologies showed that the HPS
luminaire was normally a more economical solution compared
to the light-emitting diode (LED) luminaire. The total life
cycle costs of the HPS luminaire were 45 % lower than those
of the LED luminaire per kilometre. However, the scenarios in
the sensitivity analysis indicated that there were circumstances
where the cost-efficiency of the LED luminaire was particu-
larly improved. In order for the LED technology to become
fully competitive against the HPS technology, several scenar-
ios have to take place simultaneously. The life cycle costs of
the LED luminaire were reduced compared to the HPS lumi-
naire by increased electricity price, exclusion of spot replace-
ments, reduced purchase price and modularity of the LED
luminaire.
Conclusions Despite the greater luminous efficacy, the LED
luminaire was found to have greater life cycle costs compared
to the HPS luminaire. However, the LED technology is ex-
pected to become more economical in the future due to the
development in luminous efficacy, improved product quality,
reduction in the purchase price and the enhanced competition
in the LED segment. Despite the unfavourable cost structure,
the LED technology offers other benefits, such as lighting
controls and colour characteristics.
Keywords Economic comparison . High-pressure sodium .
HPS . LED . Life cycle costs . Light-emitting diode . Road
lighting . Street lighting
1 Introduction
Lighting is essential in modern society. Artificial lighting en-
ables people to operate independently of the availability of
138
daylight, which prolongs the potential time for working,
studying and other activities. Lighting is used in numerous
applications from general lighting in buildings to automotive,
horticultural and signalling applications. Outdoor lighting; i.e.
lighting of roads, streets, bicycle ways, pedestrian ways,
parks, parking lots and other outdoor areas, contributes to safe
moving in outdoor areas after dark. As an important architec-
tural and city planning factor, outdoor lighting may also in-
crease the pleasantness of the outdoor environment and thus
improve the restorativeness of the urban landscape (Nikunen
2013). Outdoor lighting may contribute to the quality of life
by increasing safety and feeling of safety and improving the
landscape after dark, but it may also become a part of smart
city infrastructure by intelligent lighting controls and integra-
tion with other systems.
In addition to its positive impacts on the visual perfor-
mance and safety, lighting consumes a notable amount of
energy. Lighting has been estimated to account for approxi-
mately 19 % (2650 TWh) of global electricity consumption
(IEA, OECD 2006). Outdoor lighting, including roads and
streets, car parks, traffic signals, billboards and airports, was
estimated to consume approximately 218 TWh of electricity
in 2005 accounting for 8 % of the electricity used in lighting
(IEA, OECD 2006). Road and street lighting consumed ap-
proximately 114 TWh globally in 2005 accounting for 1 % of
global electricity consumption (IEA, OECD 2006). In Fin-
land, the outdoor lighting was also found to account for ap-
proximately 1 % of electricity consumption (800 GWh) in
2010 (Sippola 2010).
Outdoor lighting is generally provided not only with high-
intensity discharge (HID) lamps, such as high-pressure sodi-
um (HPS), high-pressure mercury (HPM) and metal halide
(MH) lamps, but also increasingly with light-emitting diode
(LED) technology. In the European Union (EU), the most
common light source technology was the HPS lamp account-
ing for 47 % of the installed street lighting luminaires in 2005.
Other light source technologies used in the EU were the HPM
lamp (32 %), low-pressure sodium (LPS) lamp (9 %), fluores-
cent lamp (FL) (8 %) and MH lamps (3 %) (Van Tichelen et al.
2007). The amount of LED luminaires in street lighting was
not estimated in 2007 by Van Tichelen et al., but the market
share of LED lighting in outdoor applications has been esti-
mated to rise from 6 % in 2011 to 44 % in 2016 and further to
74 % in 2020 (McKinsey & Company 2012). In Finland, the
outdoor lighting was produced mainly by HPM (51 %), HPS
(45 %) and MH (2 %) lamps, while the rest (2 %) was pro-
duced by other light sources, such as LPS, FL and induction
lamps, and LED luminaires (Sippola 2010).
The outdoor lighting sector in the EU is facing a major
challenge after April 2015 when the HPM lamps were banned
from the market due to the Ecodesign regulation 245/2009
(European Commission 2009). This means that approximately
18 million HPM lamps need to be replaced with another
Int J Life Cycle Assess (2016) 21:137–145
technology in street lighting (Van Tichelen et al. 2007). The
most promising alternatives are the HPS and LED technolo-
gies, since the HPS technology is a mature technology with
reasonable costs and the LED technology offers improved
lighting controls and choice of colour and potential for energy
savings. The HPM lamp needs a control gear, typically an
electromagnetic ballast, to operate. The ballast is not able to
operate other types of lamps, which forces the whole HPM
luminaires to be replaced. Only a retrofit type of HPS lamps
may be operated by the ballast of the HPM lamp, but the
retrofit HPS lamps were banned simultaneously with the
HPM lamps in 2015. As a result, there is a great challenge
for the cities and municipalities to replace the existing HPM
luminaires with more energy-efficient technologies.
Road lighting is designed to improve traffic safety during
darkness by providing sufficient visibility to road users, such
as drivers, bicyclists and pedestrians. The recommendations
for road lighting design in Europe are established in the tech-
nical report EN 13201:1 (European Committee for
Standardization 2004) and the European standards EN
13201:2–4 (European Committee for Standardization 2003a;
European Committee for Standardization 2003b; European
Committee for Standardization 2003c). The recommendations
establish criteria for five qualities related to road lighting:
average road surface luminance (Lave), overall and longitudi-
nal uniformities of road surface luminance (Uo, Ul), surround
ratio (SR) and threshold increment (TI). The road surface lu-
minance describes the perceived brightness of the road surface
measured in candelas per square metre (cd/m2). The uniformi-
ties of the road surface contribute to avoiding great differences
in the luminance values in the visual environment, such as the
successive areas of high and low luminance on the road that
can cause difficulty to see due to the flickering effect when
driving. The SR ensures that the immediate surroundings of
the road are also lit. The TI describes the loss of visibility
caused by the disability glare of the luminaires. The five qual-
ities have their target values in the road lighting standards
depending on the road lighting class which is defined depend-
ing on the road users, speed of movement, geometry and type
of the area, weather type and traffic flows.
In addition to fulfilling the road lighting design criteria set
in the standards, the road lighting needs to be economically
viable and—depending on the area and its importance to the
city image—visually attractive. The economic evaluation of
road lighting needs to account for the whole life cycle, and the
time value of the money needs to be taken into account. This
paper compares the life cycle costs (LCCs) of two typical
alternatives in current road lighting: the HPS and LED lumi-
naires. They are compared considering the road lighting de-
sign criteria, but the aesthetics and visual attractiveness are
excluded from the comparison. In addition, the LCC analysis
studies the sensitivity of the results to a number of parameters.
The LCC as an economic assessment is one part of the life
Int J Life Cycle Assess (2016) 21:137–145
cycle sustainability assessment (LCSA). The other parts of the
LCSA, i.e. the environmental and social life cycle assess-
ments, are considered in separate studies.
1.1 LCC analysis
The LCC analysis is a tool to evaluate the economic impacts
of a product or service throughout its life cycle, as life cycle
assessment (LCA) is that of the environmental impacts. In the
LCC analysis, the interest lies in the money flows. It is often
easier to collect economic data, such as prices and costs, than
environmental information, and the money flows do not need
to be transformed into impacts, as material and energy flows
need to be transformed into environmental impacts in the
LCA. The money flows need to be discounted, since the time
value of the money should be taken into account if the time
frame of the LCC is greater than 2 years (Swarr et al. 2011).
This was the case in the study, as 30 years was chosen as the
time frame of the calculations. A 30-year time frame is rec-
ommended to be used in the road lighting LCC calculations
(Finnish Transport Agency 2015).
It is possible to conduct the LCC analysis from various
viewpoints, such as the producer, supplier or user (Swarr
et al. 2011). The perspective in this study was chosen to be
the user who, in this case, is the municipality or the city who
purchases, uses and maintains the road lighting.
1.2 Goal and scope definition
The goal of the study is to determine which of the two light
source technologies used in road lighting is a more economi-
cal solution. The purpose is to evaluate the two technologies
without considering the previous, existing installations. This
makes the LCC analysis less case-specific, since it considers
only the future installation which the decision-making process
can actually affect.
The LCC analysis takes into account investment costs and
the present value of operating costs and residual value. The
investment costs consist of the purchase prices of the lumi-
naires including all the parts (lamp/module and control gear)
and freight and installation costs (worker, equipment). Oper-
ating costs include the energy and maintenance costs, i.e. the
electricity costs (electricity, transmission) and lamp and lumi-
naire replacement costs (worker, equipment). The residual
value, estimated as 25 % of the initial purchase price by the
Finnish Transport Agency (2015), describes here the costs at
the end-of-life, such as recycling and disassembly. Taxes are
excluded from the analysis.
In the previous LCC case study (Tähkämö et al. 2012), the
LCC considered the renewal of the street lighting installation,
i.e. the previous system and the new installation replacing the
previous one. In contrast, the starting point of this article was
to purely compare the two technologies that may be installed
139
either in new or existing poles. This is generally the situation
in the cities and municipalities: they have both existing instal-
lations to be updated and new installations to design. This
paper is aimed to assist the cities in the decision making pro-
cess by providing information on the two luminaire types.
The scope of the LCC is the road lighting luminaires used
in Finland in road lighting class M4. The particular road class
is equivalent to the European road lighting class MEW4
established in the EN 12301 series. The MEW4 class is a
lighting class for drivers of motorised vehicles on routes of
medium and high driving speeds in dry and wet conditions.
The analysis considered only the luminaires with all its com-
ponents: the light source (lamp or module), the control gear
(electronic ballast or driver) and the luminaire housing. The
pole, wiring and other infrastructure were excluded from the
scope of the analysis.
The functional unit was chosen to be a kilometre of road lit
complying with the road lighting design criteria in road class
M4. The pole distance was assumed to be optimal. Both types
of luminaires were types approved by the Finnish Transport
Agency in road class M4 (formerly AL4b by Finnish Road
Administration (Administration 2006)). The road lighting
quality is not considered in the calculations in any other
way. Thus, the colour characteristics are excluded. It must be
noted that the road lighting criteria are based on the photopic
photometry, not the mesopic one, which would be more real-
istic in road lighting environment. The mesopic photometry
applies to luminance range from 0.005 to 5 cd/m2 to which the
conditions in road lighting typically belong (Commission
Internationale de l’Eclairage 2010). However, there is no cur-
rent method to design road lighting according to the mesopic
photometry.
1.3 Life cycle inventory
The information on the two luminaire technologies is listed in
Table 1. The luminaire and lamp lives and luminaire power are
based on the data provided by the manufacturers of the prod-
ucts. The LED technology is developing in terms of its lumi-
nous efficacy (lm/W) and (real) purchase price. According to
the estimates by the US Department of Energy (DOE), the
luminous efficacy of a warm-white LED luminaire is
projected to increase from 96 lm/W in 2013 to 130 lm/W in
2015 and to 200 lm/W in 2020, while the ultimate goal is
230 lm/W (US DOE 2014). The US DOE updated their pre-
dictions for LED package luminous efficacy from 2010 to
2014 report (Table 2). Since the most recent predictions for
the luminous efficacy (US DOE 2014) are less ambitious than
in 2010 (US DOE 2014) and a relatively cautious projections
were also used in the previous LCC case study (Tähkämö
et al. 2012), the future LED luminaire luminous efficacy used
in the LCC calculations was estimated in a cautious manner. In
contrast, the price development has recently been estimated to
140 Int J Life Cycle Assess (2016) 21:137–145

Table 1 Information on the street lighting luminaires in the baseline case

Quantity Unit Luminaire type

Luminaire with 150W HPS lamp LED luminaire

Luminaire life h – 50,000

Lamp life h 32,000 –
Luminaire power W 176 117
Luminaire power in 2025 W – 66.9
Luminaire power in 2038 W – 58.5
Luminous efficacy of luminaire lm/W 73 97
Optimal pole spacing in AL4b class m 50 36
Investment cost € per piece 400.87 685.65
Lamp group replacement period a 8 –
Luminaire group replacement period a 30 12.5
Group replacement cost during 30 years € per piece 23.67 –
Group replacement cost in 2025 € per piece – 237.65
Group replacement cost in 2038 € per piece – 209.65
Amount of spot replacements % 2 5
Spot replacement cost (2013–2043) € per piece 68.67 –
Spot replacement cost (2013–2015) € per piece – 685.65
Spot replacement cost (2015–2020) € per piece – 433.65
Spot replacement cost (2020–2030) € per piece – 237.65
Spot replacement cost (2030–2043) € per piece – 209.65

be on a similar level or even accelerated from 2010 projections
(US DOE 2010, 2014). The LCC analysis was calculated
using estimates of 30, 75 and 100 % increase in the luminous
efficacy and a reduction of 45, 80 and 85 % in the (real)
purchase price in 2015, 2020 and 2030, respectively.
The lamps in street lighting luminaires are generally re-
placed in group replacements to limit the costs. It is expensive
to maintain the luminaires individually, as the replacement
requires a car-mounted lift. Spot replacements are more ex-
pensive and are thus avoided by the cities. It was estimated by
one Finnish city that 5 % of the LED luminaires have needed
spot replacements primarily due to the breakdown of the
power electronics of the luminaires. The breakdowns have
been independent from the characteristics of the technology
suppliers. However, the quality of the luminaires is expected
to increase in the long run due to increasing adoption of ro-
botics by the manufacturers and use of components of im-
proved quality. This development is expected to decrease the
failure of luminaires.
The time frame of the calculations is 30 years, and the street
lighting is estimated to be used 4000 h annually on average.
The price of electricity was 0.1 €/kWh, which was reported to
be in use in financial planning in one Finnish city. No
municipality- or city-specific electricity price data was found,

Table 2 Predictions of luminous efficacy and purchase price of LED packages according to US DOE (2010) and (2014)

Product Time of estimation Luminous efficacy (lm/W) Price ($/klm)

Estimated in 2010 Estimated in 2014 Estimated in 2010 Estimated in 2014

Cool-white LED package 2013 (173 in 2012) 166 (6 in 2012) 4

2015 215 192 2 2
2020 243 231 1 0.7
Goal – 250 – 0.5
Warm-white LED package 2013 (128 in 2012) 135 (11 in 2012) 5.1
2015 184 169 3.3 2.3
2020 234 225 1.1 0.7
Goal – 250 – 0.5
Int J Life Cycle Assess (2016) 21:137–145
but household and industry electricity prices ranged in 2013
between 0.039 and 0.2 €/kWh, the average being 0.1370 €/
kWh in households, and between 0.039 and 0.228 €/kWh, the
average being 0.0940 €/kWh in industry without taxes in the
EU (Eurostat 2013). The electricity price 0.1 €/kWh remains
within the range of household and industry electricity prices.
To calculate the present values of operating costs and the
residual value, a real discount rate of 2.9 % was used, resulting
from the estimates of nominal discount rate of 6 % and infla-
tion of 3 %, as recommended by the Finnish Transport Agen-
cy (2006).
The investment in the street lighting technology is based on
several economic factors. Therefore, there are many parame-
ters in the study that can be varied. First, the electricity price
varies by municipality, city and country and it may rise during
the 30-year time frame. The electricity price may also be in-
creased over time at a greater rate than the inflation, i.e. esca-
lation, but this is not included in the scenarios. Second, the
spot replacements may be avoided by improved product qual-
ity or a decision of replacing the lamps and luminaires only in
group replacements. It may also depend on the method that the
group replacements are organised. Third, a number of new
firms have entered into the LED luminaire segment of the
lighting industry, and it was indicated by a Finnish city that
the LED luminaire sellers occasionally offer notable discounts
in LED luminaire purchase prices, indicating the existence of
price competition on the local street lighting segment. Fourth,
the lamp and luminaire life differ from those in Table 1 de-
pending on the type of the HPS lamp and LED luminaire. The
HPS lamp in the baseline case was a long-life lamp which is
somewhat more expensive but has greater life compared to the
standard HPS lamp (typically 16,000 h). There are also LED
luminaires on the market with much longer lives (up to 100,
000 h) stated by the manufacturers. In addition, the LED lu-
minaire can be modular, so that the LED module, with or
without the driver, can be replaced separately. This would
enable avoiding the replacement of the whole luminaire, as
only the replacement parts (module, driver) can be updated
during spot and group replacements. These parameters were
considered in the LCC analysis by creating six scenarios to
study the sensitivity of the results towards the varying param-
eters (Table 3).
2 Results
Figure 1 illustrates the discounted LCCs of the baseline case
and six scenarios. In the baseline case, the initial investment of
the LED luminaire was approximately 2.3 times greater than
those of the HPS luminaire. The energy costs of the LED
luminaire were 27 % lower than those of the HPS luminaire,
but the maintenance costs of the LED luminaire were 17 times
greater compared to those of the HPS luminaire. The residual
141
value was 2.3 times greater in LED luminaire than in HPS
luminaire, similarly with the investment costs, as the residual
value was based on the amount of investment costs.
Cash flow diagrams in Fig. 2 illustrate the division of the
costs over the course of the 30-year time frame. The annual
costs during years 1 to 29 are dominated by the energy costs in
HPS luminaire, and the annual costs remain constant. In con-
trast, the energy and replacement costs of LED luminaire
change over time, as the price and efficacy of the LED lumi-
naire are developed.
In addition to the LCCs of the baseline case, the sensitivity
analysis presented the impacts of five scenarios to the amount
of LCCs. The scenarios show the sensitivity of the LCC re-
sults to the parameters listed in Table 3. The division of the
LCCs is shown in Fig. 1, and the total LCCs are listed in
Table 4 in euros per kilometre. Doubling the electricity price
in scenario 1 increased the LCCs of the HPS luminaire by
72 % compared to the baseline case, while the LCCs of the
LED were increased by 29 % compared to the respective
baseline case. Ignoring the spot replacements reduced the
LCCs of the HPS luminaire by 1 %, whereas the LCCs of
the LED luminaire were reduced by 12 % in scenario 2. The
discount price of the LED luminaire reduced the LCCs by
29 % (scenario 3). The impact of lamp and luminaire lives
on the LCCs was studied in scenarios 4 (HPS lamp life) and 5
(LED luminaire life). Choosing an HPS lamp of a regular life
increased the LCCs by 3 % compared to the baseline case,
while the long-life LED luminaire reduced the LCCs by 4 %
compared to the respective baseline case. The modularity of
the LED luminaire reduced the LCCs by 18 % (scenario 4).
The impact of the electricity price is studied in addition to
the doubling of the electricity price in scenario 1. As seen in
Fig. 3, the LED luminaire becomes more economical solution
in terms of present value of the LCC at electricity prices great-
er than 0.52 €/kWh, which is significantly greater than the
electricity prices in the EU (currently remaining below 0.23
€/kWh, (Eurostat 2013)). In scenario 3, the discount LED
luminaire price did not result to LCCs lower than those of
the HPS luminaire in the baseline case. If the freight and
installation costs remain the same, the cut-off point for the
LED luminaire price is 82 € per luminaire (investment cost
207.65 € per piece).
3 Discussion
The results of the LCC analysis case study indicated that cur-
rently, the HPS luminaire is a more economical technology to
illuminate roads compared to the LED luminaire. The present
value of the LCCs of the HPS luminaire was 45 % lower
compared to those of the LED luminaire per road kilometre
(Fig. 4), whereas the environmental impacts of the two lumi-
naires were found to be on a similar level when comparing
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Table 3 Parameters varied in sensitivity analysis
Scenario Varied parameter
1 Electricity price
2 Spot replacements
3 Discount LED luminaire price
4 HPS lamp life
5 LED luminaire life
6 LED luminaire replacement (modularity)
them per kilometre of lit road in a preceding LCA study of
LED and HPS street lighting luminaires (Tähkämö & Halonen
2015). However, the LCC analysis is affected by many param-
eters in reality. The six scenarios analysed the impact of a
number of parameters in road lighting.
Scenario 1 doubled the electricity price, which respectively
doubled the energy costs of the luminaires, thus increasing the
operating costs. As a less energy-efficient alternative, the
LCCs of the HPS luminaire were more sensitive towards the
increase of the electricity price. The electricity price is esti-
mated to be increased over time, which means that the LED
technology will become more economical alternative in the
future compared to the road lighting technologies with poor
luminous efficacy. However, the increase in electricity price is
not likely to make the LED luminaire more economical than
the HPS luminaire, since the cut-off point was found to be at
very high electricity price (0.52 €/kWh).
The exclusion of spot replacements in scenario 2 reduced
the total LCCs of the LED luminaire by 12 %, while those of
the HPS luminaire remained on the same level (99 %) as the
baseline case. However, the maintenance costs of both lumi-
naires were reduced by approximately 30 % compared to the
maintenance costs of the respective baseline case.
In scenario 3, the discount price of the LED luminaire
reduced the LCCs significantly (by 29 %). The discount in
the purchase price reduced not only the initial investment, but
also the maintenance costs and residual value. This indicates
the importance of the purchase price of the luminaire. Yet, the
Fig. 1 Present value of the life cycle costs of HPS and LED luminaires in baseline case and in six scenarios over 30 years. Note that scenarios 3 to 6
affect only either of the luminaires
Int J Life Cycle Assess (2016) 21:137–145
Quantity Unit
0.2 €/kWh
0% % of spot replacements
250 € per piece
16,000 h
100,000 h
50 % % of spot and group replacement costs
LED luminaire purchase price needed to be quite low (82 €
per piece) in order to make the LED luminaire more econom-
ical compared to HPS luminaire. Such low purchase prices are
not expected. Thus, it is relevant to focus the efforts of the
LED luminaire development not only in reducing the purchase
price but also in increasing the luminous efficacy and pole
spacing and in improving the modularity of the luminaire.
The life of the lamp or luminaire affected the LCCs only in
moderation. Changing the long-life HPS lamp to a regular-life
HPS lamp in scenario 4 had only a minor impact on the total
LCCs (3 % increase), but regarding the maintenance costs, the
regular-life HPS lamp caused significant (68 %) increase com-
pared to the baseline case. The scenario 5 considered the long-
life LED luminaire, but this scenario surprisingly affected the
total LCCs only by 4 % reduction. This is due to the fact that
the long-life LED luminaire was expected to be actually used
for the total life so that the development in the luminous effi-
cacy could not be exploited. The reduction in the maintenance
costs (23 % compared to the baseline case) was overridden by
the increase in the energy costs (20 %). An optimal time to
replace the LED luminaire in road lighting can be determined
by using the estimates of the development in luminous effica-
cy and purchase prices of the luminaires, as in the study by
Ochs et al. (Ochs et al. 2014).
The modularity of the LED luminaire (scenario 6) reduced
the total LCCs by 18 % compared to the baseline case. This
was due to the great reduction in the maintenance costs (44 %
reduction compared to the baseline case). This indicates that
Int J Life Cycle Assess (2016) 21:137–145 143

Fig. 2 Cash flow diagram of a HPS and b LED luminaire. The costs occurring during each year are assumed to occur at the end of each year. Initial
investment cost occurs at the beginning of year 1, i.e. at the end of year 0

the development of the LED luminaire modularity will help to
achieve cost-efficiency throughout the whole life cycle of the
LED luminaires.
The six scenarios were analysed individually in the calcu-
lations. However, the scenarios may occur simultaneously. In
this case, the LED luminaire performed favourably compared
to the HPS luminaire, also with regard to the total LCCs: the
total LCCs of the LED luminaire were 34 % lower (44,326 €/
km) than those of the HPS luminaire (67,622 €/km). This
illustrates the sensitivity of the LCC results to the choice of
the parameters.

Table 4 Life cycle costs of sensitivity analysis compared to the

baseline case

Case/scenario HPS luminaire LED luminaire

€/km % of baseline case €/km % of baseline case

Baseline case 38,656 70,637

Scenario 1 66,568 172 % 90,922 129 %
Scenario 2 38,112 99 % 61,977 88 %
Scenario 3 – – 49,879 71 %
Scenario 4 39,829 103 % – –
Scenario 5 – – 67,951 96 % Fig. 3 Present value of the life cycle costs of HPS and LED luminaires as
Scenario 6 – – 57,780 82 % a function of electricity price. Other calculation parameters remain as in
baseline case
144
Fig. 4 Comparison of LCA and LCC analysis results of HPS and LED
luminaires per road kilometre (environmental evaluation in Tähkämö &
Halonen (2015): ADP abiotic depletion potential, AP acidification
potential, EP eutrophication potential, FAETP freshwater aquatic
ecotoxicity potential, GWP global warming potential, HTP human
toxicity potential, MAETP marine aquatic ecotoxicity potential, ODP
ozone depletion potential, POCP photochemical ozone creation
potential, TETP terrestrial ecotoxicity potential, EI99 eco-indicator99;
economic evaluation: LCC life cycle cost (present value))
The LCCs of the HPS luminaire are likely more predict-
able. The annual operating costs of HPS luminaire are domi-
nated by the energy costs (Fig. 2) and are thus affected by the
electricity price fluctuations. In contrast, the annual operating
costs of LED luminaire are caused by the replacement and
energy costs which change over time due to the expected
reduction of luminaire price and improvement in luminous
efficacy. The expected development makes the LCC calcula-
tions of LED luminaire unpredictable due to the uncertainties
in the development speed.
4 Conclusions
The LCCs were calculated per kilometre of a lit road with an
optimal pole spacing over 30 years. The estimated develop-
ment of the purchase price and luminous efficacy of the LED
luminaire were included in the calculations. Despite the great-
er (and improving) luminous efficacy of the LED luminaire,
the HPS luminaire was found to be more economical alterna-
tive in the LCC analysis case study. However, the analysis
excluded the colour characteristics and lighting controls, in
both of which the LED technology offers improved possibil-
ities compared to the HID technologies, such as the HPS
luminaire.
LED luminaires are an emerging technology with
unrealised efficiency potential. This potential may be realised,
as the increased number of LED luminaire suppliers enhances
competition, which drives the purchase price down in the LED
segment and thus reduces the investment cost. Furthermore,
the maintenance costs of LED luminaires may be reduced as
Int J Life Cycle Assess (2016) 21:137–145
product quality improves due to increased use of automation
in system integration in luminaire manufacturing.
There are numerous parameters affecting the financial cal-
culations. Six scenarios were studied in addition to the base-
line case. The scenarios varied the electricity price, spot re-
placements, LED luminaire price, life of the HPS lamp and the
LED luminaire and the modularity of the LED luminaire. The
sensitivity analysis indicated that in order for the LED lumi-
naire to become more economical, i.e. having lower LCCs
than the HPS luminaire, the scenarios need to occur
simultaneously.
It is acknowledged that the luminaires themselves, the
lighting classes and the respective optimal pole spacings vary
depending on the area, and thus, the results of the LCC study
in this article do not apply to all HPS and LED luminaires in
any lighting class. However, this is an example and aimed to
inform the decision makers with an unbiased evaluation and to
give ideas for the sensitivity analysis. In addition, the technol-
ogies develop, so it is recommended to update the calculations
regularly.
As this research evaluated only the economic perspective,
further research is needed in order to gain knowledge on the
triple bottom line approach of sustainability assessment. Es-
pecially, a social LCA of road lighting is needed, as the envi-
ronmental perspective has already been covered by a recent
research (Tähkämö & Halonen 2015).
Acknowledgments This work was supported by the Aalto University
Aalto Energy Efficiency Research Program (AEF).
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