When Jason Chroman relocated from San Francisco to the suburbs, he and his family moved into a bigger, newer house. It was all very exciting until their first electric bill arrived. "The house was maybe 30 percent bigger, but the electric bill was something like 200 percent more," Chroman said. So he started looking around to figure out what could be using so much power. He found the answer when he looked up: "Because it was a new house, it had a lot of recessed lighting, all of which was incandescent," he said.
Chroman is the vice president of finance at a Silicon Valley start-up called Tubular Labs, so he put the money skills he honed on the job to work at home. The question: Since LED lightbulbs cost more but use less energy, how soon would they pay for themselves? He was surprised to find that because of California's high energy prices, he could recoup his costs in less than two months. "When I figured out the economics of each bulb, I upgraded all the bulbs in the house," Chroman said. "It cost me a bundle, but my power bill went down by about half. I was blown away by how much electricity lighting consumes."
The federal government caught on to the high cost and energy consumption of lighting in 2007 and passed a law decreeing that lightbulbs must be three times more efficient by the year 2020. Congress didn't outlaw the old-fashioned "Edison" lightbulb — so named because it's what we've used since Thomas Edison's time — but it may as well have, because no incandescent bulb comes anywhere close to meeting the new standard. States then had the choice to accelerate the change, and California moved ahead with it. Starting this New Year's Day, California retailers must exhaust their supply of incandescents and then sell only bulbs that meet the new standard, which means LEDs and compact fluorescent lightbulbs. The rest of the nation will follow in two years.
Chroman's home is big and his power rate high, but even for a more average home, the numbers are compelling. The average American house uses 40 lightbulbs. The average rate for electricity is 13 cents per kilowatt hour. If all 40 lightbulbs were 75 watt incandescent, which is pretty typical, you could convert to 11 watt LEDs to get the same amount of light. Let's say you leave all 40 lights on five hours a day. In this scenario, homeowners would save $600 a year by switching lightbulbs from incandescent to LED.
But what about the cost of the bulbs themselves? When LEDs first came on the market, there was serious sticker shock. LED spotlight bulbs, for example, once cost as much as $100. No more. I scanned the Internet and found plenty of LED bulbs available for $5 apiece, and they can cost less, thanks to rebates offered by power companies. By comparison, incandescent bulbs cost about a dollar each, although prices will probably increase as they become scarce because of the government requirement. Prices vary, but let's call the difference in cost between a basic LED and an incandescent bulb $4. According to the math above, the monthly usage savings for a single bulb is $1.25. So most people will be able to recoup the cost of a new LED bulb in just over three months.
In addition to saving money, LEDs can save you time — with fewer trips to the store and up the ladder. They last about 25,000 hours. That's more than 13 years, if you keep your lights on five hours a day, as in the example above. By comparison, incandescent bulbs last just 1,200 hours, and compact fluorescents, 8,000 hours.
And, of course, LED bulbs save energy. That's what the government was after in the first place. There is less stress on your wallet, but also less strain on the electric grid.
To take advantage of the cost-time-energy savings, there may be a few more objections to overcome. Here goes:
Color: The early LEDs often shed a cold, bright-white light. Newer LED bulbs are branded as "soft white" or "warm white" that glow just like an old-fashioned incandescent. Look for a color temperature of 2,700 Kelvin.
Shape: LED bulbs are now available for almost any purpose. In addition to regular bulbs and spotlight-style bulbs, chandelier-shaped bulbs, three-way bulbs and even Christmas lights are on the market.
Dimming: Many LED bulbs are dimmable, unlike early LEDs and compact fluorescent lightbulbs, or CFLs, the vast majority of which still are not dimmable.
Quality: Not all LEDs are created equal. To know you are purchasing LEDs with the maximum benefits, look for the Energy Star label. This means they meet standards for brightness, color quality, efficiency, steadiness and immediate lighting when switched on.
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