Abstract
Life-cycle cost analysis (LCCA) and simple payback are two methods of estimating the cost-effectiveness of a business decision. LCCA considers factors that simple payback does not, such as the time value of money and energy price escalation. Several case studies of greenhouse supplemental lighting systems are presented that demonstrate how simple payback can be misleading, underestimating the time required for an investment to become profitable. In some cases, the project does not become profitable within the building’s estimated lifespan. These case studies show that for significant investments, LCCA should be used to evaluate whether they are actually cost-effective.