How Much Will Switching Light Bulbs Save You?

The real cost of lightbulbs

Thomas Edison, the man largely credited for inventing the modern incandescent light bulb as we know it, once said that “we will make electricity so cheap that only the rich will burn candles”. While I appreciate the philanthropic nature of his comment, something tells me he never would have predicted just how much it costs to power the light bulbs that illuminate our homes more than a century later. According to the US Energy Information Administration the national average per kWh is only $.10, and while that may not seem like much, I assure you that energy costs can add up quick. To help illustrate this point, let’s take a look at the true cost of light bulbs.


The true cost of light bulbs: LED vs. CFL vs. Incandescent

To begin, take a look at the following chart which breaks down the real costs associated with the three most common types of light bulbs over a seven year period (LEDs, CFLs and Incandescents). Note that this chart was compiled by Scott Cooney, an Adjunct Professor in the MBA program at the University of Hawaii, based on Hawaii’s rates of 34.5c per kWh.

Screen Shot 2015-02-05 at 11.45.17 AM

So let’s break down just what this chart is telling us. The breakeven point (the point at which the total long term cost of the more efficient bulb becomes less than that of the less efficient bulb) happens in year one for both CFLs and LEDs as opposed to incandescents. In year 3, the LED surpasses the CFL in long term savings. So if you have a 3 year or longer time horizon, the LED is not only the more eco-friendly option, it’s the most cost-effective, despite the higher upfront cost.

As you can see the upfront costs for all three types of light bulbs are as follows (going from lowest to highest):

  1. Incandescent ($2.50)
  2. CFL ($3.00)
  3. LED ($12.50) *

*(Note that since we created this chart, the price of LEDs has dropped about 30% lower than this, meaning that the ROI is even better)

It’s no wonder so many people opt for incandescents or CFLs instead of LEDs! The price is drastically lower (initially, at least). However, what most people don’t consider at the time of purchase are the long term ramifications of purchasing the cheaper bulb. For example, incandescents and CFLs (lasting 1,200hrs and 8,000hrs respectively) simply won’t last as long as their LED counterparts (which can last as long as 50,000hrs). Meaning, you’ll have to repurchase the “cheaper” light bulb several times before you replace the LED even once! Now if you factor in the cost to actually operate the various types of light bulbs, you’ll see that LEDs will start to pull way ahead of the competition. Here are the real costs of purchasing, using (and replacing) all three types of light bulbs over a seven year period (from lowest to highest):

  1. LED – $70.09
  2. CFL – $93.88
  3. Incandescent – $381.25

So, what should all these numbers really mean to you? It’s quite simple actually, LEDs (in the long run) are the cheapest and most energy efficient means by which you can illuminate your home (sorry Thomas, but light bulb technology has come a long way since 1879).


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