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In 2001, the City of Portland, Oregon replaced most of its incandescent traffic signal lights with new, highly efficient light-emitting diodes (LEDs). Using an innovative leasing arrangement to amortize the investment costs, Portland’s Signal and Street Lighting Division was able to replace 13,382 red and green existing incandescent lamps with LEDs. The project resulted in 4.9 million kilowatt-hours of annual savings in energy consumption (representing an 80% reduction in energy usage) and a reduction of about 2,880 tons of annual CO2 emissions.
While the project benefited from a special tax credit and utility rebate, its economics were favorable regardless: the total investment of $2.2 million (before incentives) resulted in annual utility bill and maintenance savings of $380,000 per year, or a payback of 5.8 years (down to 3.1 years with the incentives). However, since the lamps were leased to the City, no upfront investment was required. The energy savings also helped the City avoid budgetary repercussions from an unexpected 40% electric rate hike from the power utility.
ESMAP. 2010. Good Practices in City Energy Efficiency: Portland, United States - LEDs for Traffic Signals. ESMAP Energy Efficient Cities Initiative. Washington, DC: World Bank.
