The True Cost of LED Lighting

There are many reasons preventing customers switching to LED lights from conventional lighting. But none larger than the lack of awareness about this new technology and the multiple benefits that it has to offer. And even those few, who are aware of this new technology, are deferring the decision because of its higher initial purchase cost. An in depth analysis into this technology reveals that it is economically, environmentally and technically feasible to invest in LED's now.

Is it Economically Feasible?

The greatest barrier in switching to LED technology from conventional lighting is undoubtedly the initial cost. But analysis reveals that this high initial cost is recovered in many ways, once the investment is made. Let us look at the cost aspect from various angles and do a comparative analysis between conventional and LED based lighting in a typical US household.

About LED Lighting Technology

An average house contains around 45 light bulbs. Lighting thus makes up a significant part of your average utility bill. Americans spend up to 25% of their electrical utility bill on lighting. And who isn't interested in saving money? There are various sites and other literature describing techniques by which you can reduce your utility bill.  Today, there are so many alternate sources of energy and new technologies to consider and choose from.  One such technology is the solid state LED (SSL) technology. LED's has been around for many years, but only lately have manufacturers started to expand the product line from the simple diode lights that were the benchmark a few years back to newer and sophisticated versions. Brighter and more intense LED's has been incorporated into flashlights, outdoor solar lights and head lamps. And only recently, new home based LED's have hit the market. But what about the cost? Yes, they are not the cheapest bulbs available. But there is so much more to this story than just the initial cost of this bulb. In fact, you will be surprised to know how much money you can save by switching to this energy efficient lighting.

The "True" Cost of Bulbs

It is a fact that a LED bulb has a much longer life than an incandescent bulb. They have an estimated life time of 30000 hours +. Some newer lights can last as much as 50000 hours. However, for the purpose of this discussion, we will compare a 30000 hour par 30 LED light to a standard incandescent par 30 light that are common in many US households today. The incandescent light has an estimated life of 2500 hours. So over the total life of one LED bulb, you will have to purchase 12 incandescent par 30 bulbs.

Bulb Type Bulb Life Cost/Bulb

Cost of bulbs over

30,000 hours

Incandescent 2,500 hrs 2.00 $36.00
LED 30,000 hrs 9.00 $9.00

Cost of Electricity

The cost of electricity varies across the United States, from as little as .07 USD / kwh all the way to as much as .23USD / kwh. Kwh means Kilowatt hour, and the amount given is what is charged for 1000 watts for 1 hour. The average cost across the US is .12 USD / kwh . For the purpose of this discussion, we will use this as the basis for all the calculations.

The first calculation compares 10 LED par30 6 watt bulbs to 10 incandescent par30 50 watt bulbs. A 6 watt LED bulb gives the same intensity of light as a 50-60 watt incandescent bulb.

For comparison, we assume that each bulb is used for 10 hours/day.

The cost of using 45 incandescent bulbs for 10 hours a day is $986.18. The cost, if you changed to LED lamps, would be $118.34. A savings of $867.84 per year.

So, putting the two comparisons together, we can clearly see the savings in your utility bill by switching to LED luminaries.

Putting it all together: The True Savings

Finally, we must compare the cost of incandescent bulbs to LED bulbs over the 30000 hrs life of the LED bulb. For this calculation, we will compare 10 LED products and 10 Incandescent products using the same bulbs as discussed above.


The total cost of 10 incandescent bulbs over 30000 hours, including the cost of electricity at .12 USD / kwh and the cost of the bulbs is $2389.23. The total cost of 10 bulbs over 30000 hours, including cost of electricity at .12 USD / kwh and the cost of the bulbs is $499.65. A savings of $1889.58.

The savings for 45 light bulbs is even more dramatic:

Bulb Type Bulbs in Household Cost of Bulbs Cost of Electricity Total Cost
Incandescent 45 $1620.00 $8105.55 $9725.55
LED 45 $405.00 $972.67 $1377.67
Have any questions regarding this article or about LED products in general?

Contact a LED professional and get all of your questions answered!

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