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Lighting benefit/cost ratio (B/C) calculator

Compare discounted incremental savings with incremental initial investment.

B/C=Snet×[1−(1+i)−n]i×Cinitial\mathrm{B/C} = \frac{S_{\text{net}} \times \left[1 - \left(1 + i\right)^{-n}\right]}{i \times C_{\text{initial}}}

Calculator

Enter the values you know and leave one box empty. Calculate finds the empty one, the result or any input.

$/yr
1/yr
yr
$
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Worked example

Given

  • SnetS_{\text{net}} = 7,400 $/yr
  • ii = 0.09 1/yr
  • nn = 12 yr
  • CinitialC_{\text{initial}} = 43,000 $
B/C=7400×[1−(1+0.09)−12]0.09×43,000≈1.232\mathrm{B/C} = \frac{7400 \times \left[1 - \left(1 + 0.09\right)^{-12}\right]}{0.09 \times 43{,}000} \approx 1.232

Symbols and units

SymbolMeaningUnit
B/C\mathrm{B/C}present-value benefit/cost ratio—
SnetS_{\text{net}}annual incremental savings$/yr
iirequired return1/yr
nnproject lifeyr
CinitialC_{\text{initial}}incremental installed cost$

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Results are estimates for study and screening. Check the inputs, units and assumptions before you use them for design, billing or contract decisions.