LEDs, Energy Saving Marvels – Part 2

LEDs, Energy Saving Marvels – Part 2

The economics of LEDs is what makes them so revolutionary, and also misunderstood.

Each LED bulb is substantially more expensive than an incandescent bulb, though their cost has come down significantly over the past few years.

LEDs achieve an 85% improvement in efficiency, when compared with a 100 watt incandescent bulb: Or 40% when compared with a comparable compact fluorescent lamp (CFL).

CFLs were forced on Americans by Congress, while LEDs are a free market success story. The recent, rapid advances in LEDs are making CFLs a very bad choice.

LED bulbs vary substantially in cost, depending on their wattage equivalency rating, Lumens and color temperature.

LED, 100 watt equivalent bulbs are still fairly expensive, with their cost varying between $6 and $16 per bulb.

  • The least expensive $6 LED bulb has a color temperature of 5,000 K, which is a cold color that many people might not like.  The $16 LED bulb has a color temperature of 2,700 K, which is warmer and the same as an incandescent bulb.

Costs and payback periods

Savings from reduced use of electricity can quickly pay for LEDs when they are used for 4 hours each day.

  • The $6, 100 LED equivalent bulb only requires 5 months to recover the additional cost of the bulb, when the cost of electricity is 12 cents per kWh.
  • The more expensive $16 LED will require 1.1 years under the same conditions.

LED bulbs rated 60 Watts have become very affordable.

  • A $1.60, 60 watt equivalent LED bulb can recover the additional cost of the bulb in 2 months, while providing the same color rendering as an incandescent bulb.

The cost of electricity in some states is considerably higher than the national average and the payback periods will be shorter in those states.

The economics are very positive when the LED bulb is used for two or more hours each day, but can be very uneconomical when the bulb is used for only short periods of time.

For example, when the bulb is used for 1 hour per day, it requires:

  • Nearly 9 months for a $1.60, 60 watt bulb to recover its added cost
  • Over 1.6 years for the $6.00, 100 watt equivalent bulb to recover its added cost

But if the $6.00, 100 watt equivalent LED bulb is in a closet and used for only 15 minutes a day, it will require nearly 6.5 years to recover the higher cost of the bulb.

Specialty bulbs, such as those used in ceiling fixtures cost considerably more, so the payback needs to be determined before deciding whether the higher investment is worth the expense.

However, it may be worth spending more money for an LED bulb when the bulb is located where access is difficult: The effort and danger associated with changing a bulb in a ceiling fixture when the ceiling is 20 feet high, could be well worth the added cost.

Replica of Edison incandescent bulb and typical LED bulb.

Life and long-term savings

The average homeowner should want paybacks of less than two years, since people frequently move and because a two year recovery represents a sound investment.

Businesses can also consider the life of the bulb when deciding whether to invest in LEDs.

Packages frequently claim that an LED bulb can last for 10 or more years. But while incandescent bulbs burn out, LED bulbs just fade away.

LEDs may last far longer than the 50,000 hours claimed on the package.

The life of an LED bulb is based on when the bulb’s Lumen output has declined to 70% of its initial rated output.

Incandescent bulbs burn out after around 1,200 hours.

A business can expect to be in operation for many years, so the cost savings include the avoided cost of not having to buy bulbs.

While this might only avoid purchasing 42, 100 watt incandescent bulbs at a cost of $25, there will always be labor costs, and these can add-up very quickly.

Businesses frequently use a flood lamp, i.e., an R30 or R40, and these are more expensive than the bulbs commonly used in homes, except in ceilings.

An R40 incandescent may cost $4.00, but an R40 LED could cost $15.

Department stores are huge consumers of lighting. They could recover the cost of an R40 LED in around six months when operated 8 hours per day, but will save another $170 in the cost of bulbs, plus another unknown amount in labor costs by using LEDs.


A few things to remember when buying LED bulbs.

  • Basic LED bulbs can’t be dimmed. Dimmable LED bulbs cost more.
  • LEDs emit heat, especially the higher wattage rated bulbs, and the semiconductors used in LEDs are easily damaged by heat.
  • The heat sink in LED bulbs should be kept open to allow heat to be properly dissipated. Enclosing an LED bulb can affect its life.


LEDs save a great deal of electricity when compared with incandescent bulbs, and also when compared with other popular types of bulbs and lamps, such as compact fluorescents and sodium vapor.

They also have very long life, when compared with incandescent lamps.

When used for 4 hours or more each day, they will recover their added cost very rapidly and are well worth the investment.

They are a bad investment when used intermittently or for short periods of time.

Around 9% of electricity in the United States is used for lighting, so converting to LEDs can save large amounts of money and reduce electricity consumption at the same time.

No other technology can improve the nation’s efficient use of electricity as much as LEDs.

There was no reason to prohibit the manufacture of incandescent lamps, other than for ideological reasons, when LEDs were becoming available.

Industry and science, under the free market system, had already developed the technology that would replace incandescent lamps in a far less costly and far more orderly manner.

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