Computing KwH

[MikePA]

I want to compare the electricity used by an LCD monitor (25 w) versus a similarly sized CRT (75 W) for our company. Is the following correct?

25 w x 1 hour x 10,000 users = 250,000 watt hours
250,000 / 1,000 = 250 KwH
250 KwH x 9 hours/day = 2,250 KwH
2,250 KwH x 220 working days/year = 495,000 KwH/year
495,000 KwH x $0.05/KwH = $24,750/year to power 10,000 LCD monitors

75 w x 1 hour x 10,000 users = 750,000 watt hours
750,000 / 1,000 = 750 KwH
750 KwH x 9 hours/day = 6,750 KwH
6,750 KwH x 220 working days/year = 1,485,000 KwH/year
1,485,000 KwH x $0.05/KwH = $75,250/year to power 10,000 CRT monitors

Therefore, it costs $2.48 to run an LCD for a year versus $7.53 to run a CRT for a year, a $5.10 difference. Given the $249 purchase difference, if we keep a monitor more than 48.8 months, we would save money over the useful life of the monitor by buying an LCD?

This analysis doesn't include the reduced heat of an LCD nor savings in storage and desktop space.

 

[hazmat]

Your math looks good to me. Does your company purchase or lease computer equipment? Usually with the lease, you give back the whole setup at the end, not just the computer.

The heat is probably a wash, Saves money in the summer, but costs money in the winter.

Do the LCD's have a higher failure rate than the CRT? Might have to figure higher maintence or repair costs.

 

[DocHeb]

Be careful, your spreading that nefarious logic that our tool (i.e. "toy") purchases must be justifiable on a rigorous economic basis. The appropriate criteria you should be applying is "and I really need it, and it looks really cool!"

 

[MikePA]

<font color=blue>Does your company purchase or lease computer equipment?</font color=blue>

We purchase PCs. 3 year straight line depreciation.

The LCD monitors I was looking at, Hitachi, have a 3 year warranty. So, if the monitor failed, it'd be covered.

 

[hazmat]

Looks like you're golden. In your pitch be sure to show a metric of employee morale going up because they will have 43.267 in^2 more desk space./w3tcompact/icons/grin.gif

 

[MikePA]

<font color=blue>and it looks really cool!</font color=blue>

Speaking of cool...I purchased a PC for my daughter to use in college this fall. Given the premium on space in dorm rooms, I purchased a small footprint PC (Compaq Evo 510) and a 15 inch Hitachi LCD monitor (CM153B) and, I must say, the black and silver Compaq Evo and the black LCD monitor do look kewl!

 

[patrickg]

Mike, How long, on average, do you retain monitors? Your first analysis post gave breakeven at 48+ months but you later commented you straight line depreciate in 36 months. If they junk'em and buy new for the depreciation and to reduce out of waranty maint cost at 36 months you cant justify on energy cost.

If you want to make a stronger argument AND there is a defensable position then you want to use NPV (Net Present Value) calculations AND you should approach things from the standpoint of an investment opportunity rather than an expense.

You need to show with the current and estimated cost of money over the period of interest (installed life of the equipment) that there is payback/breakeven/profit in INVESTING capitol in your recommended course of action. You need to include the concept of installed lifecycle costs in your comparison. your approach isn't wrong but it is incomplete and would be more convincing to "businessmen" with life cycle concepts and NPV included in the analysis.

Way back just after the patent on dirt expired, I had an engineering job (energy conservation officer) at SUBASE San Diego. I had to compete against many choices of places the comanding officer could put the base's money. I had to learn how to make a presentation that held up to the strongest scrutiny. Eventually the CO and the members of the ward room (Dept Heads) learned that when I made a presentation it was a logical argument backed up by sound economic and engineering analysis and that although someone might not like what I wanted to buy or do, unless they had a better return on investment to offer (rare) all they could do was appeal to emotion or call in a favor or... use the secret Navy handshake (I was civilian).

If your NPV analysis shows breakeven in less than the installed lifetime then you are offering an investment not an expense. If the audience for your presentation is inexperienced and naive perhaps your simple (but not really real) analysis will be sufficient. Still it tends to get someones attention when you make the claim that it is an investment with profit potential rather than an expense.

I am facing these same sort of decisions myself just now. Do I install ground sourced heatpump (GeoThermal) at considerable expense to save operating costs and try to recoup over time or will my new home be so super insulated that it can be heated with a candle and cooled with an ice cube? Even if the GeoThermal unit ran for free would it last long enough to pay for itself with offset energy costs? If it only costs $100/yr to heat and cool the house the unit would have to be replaced before it could save enough money to pay for it self even if it didn't consume any electricity.

Let us know how your sales job works out.

Patrick

 

[hazmat]

One more thing to add to the equation. When you do get rid of them, aren't LCD's cheaper? CRT have heavy metals and now many landfills won't take them.

I think you can get away with the 3 year straight depreciation even if you keep the equipment longer (which you have to to make money on the investment) because it has little or no value at 3 years old.

 

[MikePA]

patrick, I considered doing a NPV calculation, and I might have to if this proposal gets to the financial types. However, the initial audience might have a hard time understanding NPV. /w3tcompact/icons/smile.gif

We do not dispose of assets once they hit zero book value. As long as the equipment still works, we keep using it. Also, hazmat's point about disposal costs is another evaluation point. I have a call into the Facilities people to see what we pay for a KwH. Given our size, it's probably less than the 5 cents I used in my calculations.

 

[patrickg]

Mike, ...or your per KWh it might be more if your utility is into loadshedding and charges premiums for power used during claimed power crises like hot summer afternoons when generating capacity is taxed to the max. If you run your 'puters through those periods you might pay extra.

It is worth looking into. You don't always get a volume discount, sometimes there is a surcharge

Patrick