Why add a discount rate to simple payback?

They answer different questions. Payback asks how long the money is at risk; NPV asks whether the project creates value at the cost of capital. On these defaults the two differ by nearly half the headline benefit.

What discount rate should I use?

Whatever your organization applies to capital, commonly 8 to 15%. If unsure, run both ends: clearing at 15% means the rate is not deciding, and failing at 8% means no argument about the rate saves it.

Where do I get the mercury savings figure?

Build it. The mercury energy page annualizes electricity; the lamp replacement page gives cost per operating hour; then add swap downtime, exhaust and building cooling. It is the input every row depends on.

Do UV LED arrays need replacing?

Eventually, yes. They degrade gradually over tens of thousands of hours, and the end of that life is a capital-scale purchase. A maintenance figure without a provision for it flatters every row.

UV Curing calculator

UV LED Payback Calculator

Appraise a UV LED retrofit both ways: simple payback and discounted value. Enter installed cost, mercury savings, LED maintenance and your discount rate; set the rate to zero to reproduce payback arithmetic.

What this calculator does

Appraise a UV LED retrofit on simple payback and on discounted five-year value.

Formula used

Net annual savings = mercury savings − LED maintenance
Years to payback = installed cost ÷ net annual savings
5-year net cash = net savings × 5 − installed cost
5-year ROI = net cash ÷ installed cost × 100
5-year NPV = net savings × annuity factor − installed cost

Inputs explained

Retrofit Installed Cost: Everything spent before the first good part.
Annual Mercury Savings: Annual cost the retrofit removes; build it, do not guess.
Annual LED Maintenance: Ongoing LED electricity, cooling and replacement provision.
Discount Rate: Your cost of capital or hurdle rate.

How to use the result

Best suited to screening a retrofit before committing engineering time, presenting a capital case to a hurdle rate, testing sensitivity to the savings estimate.
Level savings ignore drifting electricity prices and volumes. Excludes tax, depreciation, grants and utility rebates. Prices no throughput gain and assumes the chemistry cures.

Current U.S. benchmarks

As of 2026-10-02, the U.S. prime lending rate is 7.00% (Federal Reserve via FRED). Equipment loans and lines of credit typically price at prime plus a spread, so use your actual borrowing rate when you have it.

Common questions

Why add a discount rate to simple payback? They answer different questions. Payback asks how long the money is at risk; NPV asks whether the project creates value at the cost of capital. On these defaults the two differ by nearly half the headline benefit.
What discount rate should I use? Whatever your organization applies to capital, commonly 8 to 15%. If unsure, run both ends: clearing at 15% means the rate is not deciding, and failing at 8% means no argument about the rate saves it.
Where do I get the mercury savings figure? Build it. The mercury energy page annualizes electricity; the lamp replacement page gives cost per operating hour; then add swap downtime, exhaust and building cooling. It is the input every row depends on.
Do UV LED arrays need replacing? Eventually, yes. They degrade gradually over tens of thousands of hours, and the end of that life is a capital-scale purchase. A maintenance figure without a provision for it flatters every row.

Last reviewed 2026-10-05.