In 2010, the uncapping of electricity rates resulted in at least a %35 increase in electricity charges, increasing the annual cost of traffic lights, which is roughly $1,000 for a signalized intersection. Energy-sipping LED traffic signal technology can counteract these rising costs by using 90 percent less energy than traditional incandescent lighting and by reducing operational costs by 80 percent. In addition, the life of LED lighting is five to seven years, representing significantly lower annual replacement and maintenance costs over incandescent traffic lights. The math here is clear; installing LED traffic lights saves money and is more efficient with payback at today's electricity rates without grant funding expected within approximately three years. 

The capital cost of LED lighting equipment is approximately $2,000 while the approximate cost of installing LED lighting per intersection is $1,000. Recognizing that smaller communities have small budgets and may lack the technical expertise to convert to LED traffic light technology, SEDA-COG and PennDOT Districts 3-0 and 2-0 partnered in 2007 and 2008 to provide technical assistance at no cost to the communities within SEDA-COG’s 11-county area that had not already converted to LED technology.

The 38 signalized communities that had not converted to LED technology were invited by SEDA-COG to participate in a consortium for the equipment bulk purchase of these energy efficient lights. The COSTARS program enabled the municipalities to make one bulk purchase of PennDOT-approved LED equipment. SEDA-COG’s counties acted as the purchasing agent on behalf of their municipalities in order to streamline the purchasing process.

To support this lighting conversion project, SEDA-COG’s Energy Resource Center (1) formed the consortium of signalized municipalities through education and outreach, (2) facilitated intergovernmental cooperation for the procurement of the LED lighting equipment, (3) procured $200,000 in grants to reduce the equipment purchase cost to municipalities and (4) provided overall project management. PennDOT assisted municipalities (1) to identify their LED equipment purchase needs, (2) to compile a master list of LED equipment to be purchased by consortium members and (3) to reduce installation costs by conducting workshops to train municipalities and traffic signal installation contractors about how to install and maintain LED equipment.

The large volume of equipment purchased by forming the consortium enabled SEDA-COG to negotiate a price that was 25% below the equipment list price, representing an aggregate savings of $47,648. The project has resulted in significant energy savings for participating municipalities, representing a projected annual avoided aggregate cost savings of $48,746, and an aggregate annual energy reduction of 244,216 kWh.