Investing in Energy Efficiency

I recently gave some basic energy saving tips that may help consumers lower their utility bills. One of those tips was considering replacing conventional lightbulbs with light emitting diodes, or LEDs.

I figured advice isn’t very good if I wouldn’t take it myself, so I bought two LEDs to replace two old-fashioned incandescent bulbs in the light fixture above my dining room table. It may sound like a boring chore, but it promises to deliver a far better return on my investment than any stock or bond I’m likely to buy.

I won’t go into the physics of how LEDs work, because as a journalist who hasn’t seen the inside of a science classroom in a long time, I’m not qualified. Suffice it to say that LEDs generate light much more efficiently than Thomas Edison’s venerable incandescent bulbs do. And though LEDs were very expensive when they first hit the market, their prices have come down sharply. Plus, they have several advantages over spiral-shaped compact fluorescent bulbs, which are also quite efficient: Unlike CFLs, LEDs don’t contain toxic mercury. They can be dimmed, which CFLs generally can’t, and they can produce many different colors and hues of light, whereas CFLs tend to cast a harsh, white glow.

More importantly for the cost-conscious, LEDs can save you a bundle.

Here’s the math in my case. I bought a two-pack of dimmable LED bulbs rated to produce the same amount of light as a conventional, 60-watt incandescent. They are the same familiar A19 bulb shape as the incandescents traditionally used in many residential fixtures. (Picture the “Eureka!” lightbulb that appears over cartoon characters’ heads when they think of a bright idea.)

The LEDs I bought consume 10 watts of electricity. So, two operating together at full brightness consume 20 watts, whereas the two old bulbs used 120 watts. Thus, every hour I use them, it saves me 100 watt-hours, or one-tenth of a kilowatt-hour (the unit of power the electric company uses on your bill). I estimate I use the light an average of two hours a day, so that’s two-tenths of a kWh per day, or 73 kWh per year.

In Virginia, where I live, residential electricity rates average 11.55 cents per kWh, so my savings of 73 kWh per year works out to $8.43 per year. That is almost exactly what I paid for the two bulbs.

In other words, I’ll earn back my initial investment in a year, and then save another $8 or so every year thereafter. Granted, that’s relatively small potatoes (though I’ll take a free $8 anytime you offer it to me). But in percentage terms, it’s hard to beat an investment that repays your upfront cost in a year and then pays you that amount again each year afterward. (The maker of the bulbs I bought estimate they’ll last more than 22 years at three hours per day, though cheaply made LEDs have been known to fail much sooner.)

The savings really add up if you replace more bulbs with LEDs, and/or use a given light for more hours per day. Multiply my $8 per year by a few high-use fixtures and you’re talking about some meaningful savings. That’s especially true if you live in a region with high electricity rates. The national average residential cost was recently about 12.9 cents per kWh, according to the Department of Energy. But consumers in New England pay more than 19 cents on average. In California: 18.3 cents. In Hawaii: An eye-watering 29.5 cents. The higher the rate you pay, the more potential savings you can realize.

One downside of switching to LEDs is the additional choices you’ll have to make. LEDs can be dimmable or not, and the dimmable kind often work best on a dimmer switch designed for LEDs. Their light output is measured in lumens, which is not a unit of measurement most consumers are familiar with (though LEDs are also generally marketed as having the light equivalent of conventional bulbs: 40 watts, 60 watts, 75 watts, 100 watts, etc.). You must decide what sort of light you want, such as soft white or daylight (the soft white bulbs I chose look like regular incandescent bulbs to me; they cast a pleasant, yellow glow). And if you’re installing the bulbs in an enclosed light fixture, you’ll want LEDs that are rated for that.

Luckily, all the specs are spelled out pretty clearly on the bulbs’ packaging. And many home improvement stores show different bulbs in display cases that let you see the difference between, say, soft white and daylight.

To me, those extra considerations seem like a small price to pay for a lower electric bill. Saving money doesn’t get much easier than screwing in a new light bulb.