Berkeley Haas Case Series

Case Information

Legrand: Lightening Their (Electricity) Load
Romero-Hernandez, Omar , David Hirsch, and Sergio Romero
Publication date: 2/11/2015, pages 1-13

This case illustrates the key factors that Tim Travis, the maintenance lead for Legrand North American, must consider in a capital investment decision that involves the implementation of a new lighting system. Legrand, a France-based multi-national company that sells electrical wiring accessories worldwide, is considering whether it should implement its own internal energy efficiency program at its Fort Mills, South Carolina, warehouse location to achieve cost and environmental savings on electrical usage and to meet the new standards established under U.S. Department of Energy’s Better Buildings Challenge . The case examines the key components of the capital investment decision, how tax policies promoting energy efficiency can influence the decision, and how to measure the return on capital investment through three different methodologies: the payback method, internal rate of return, and net present value. A breakdown of a cost/savings analysis on energy usage is also examined.

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