Tuesday, July 18, 2006

A Watt saved is $1 earned.

As we work to increase efficiency (and decrease unnecessary energy consumption) it may be interesting to look at the value of saving a watt.

Thinking about this from a product design/engineering perspective (although it applies equally to comparing products at the point of purchase) where the designer is trading off a dozen cost/benefits (including simply completing the design) what is the value of creating a product that uses 1 Watt (or 100W, etc.) less power?

Let us assume that energy costs $0.10 kWh. If the product is used 2,000 hours a year (a.k.a. the standard 40 hour work week) and will be used for 5 yrs on average, then
1W x 2,000 x 5 = 10,000 Wh = 10 kWh

So the life cycle cost of 1 Watt is $1.

If the item is designed to sell in million unit volumes, the cost of that Watt can really add up!

As in so many cases, if we look carefully we find that not all watts are created equal...

Some items are used far more (or less) often than 2,000 hrs/yr x 5 years.
A stairwell light (anything really) which is on 24/7, has a $4.40 cost per Watt (every 5 years).
Meanwhile an appliance used half an hour a day has a $0.10 per Watt cost.

As I pointed out in one of my first posts, energy prices can also vary greatly. If you are using disposable AA batteries to power your device, you are paying ~$2 a Watt per HOUR.


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