Efficient lighting as a return on investment

A lot of people say, oh man, that LED bulb is really expensive, I don't know if it's worth it. It's a valid concern, but the other part of it is, you're going to start saving money on electricity the very first month you start using it.

There's an obvious parallel to this. If you put $1,000 in say a certificate of deposit (CD), you'd start earning interest on it in the very first month as well. Your money would be locked up in the length of the term (unless you wanted to take a penalty for early withdrawal), but at least that money would be invested in something.

Now in a sense, this is exactly the same effect as investing in some efficient lighting. You put some amount of money into an investment, saying a bunch of LED bulbs for your home. You make some money on it, namely the electricity you're not having to pay for. You're not exactly being paid in the form of a check, but rather paid in the savings you're not having to pay out each month. The effect on your bottom line is exactly the same.

The one difference between the two investments is that at the end of the life of your bulb, you don't get the money back (like you would in a CD). But still, we can use financial tools to estimate our return on our investment on a principal we will not get back.

I was using this with a friend who was balking at an $18 bulb cost. They were 12-watt LEDs that would replace a 75-watt unit. They're for a room he uses quite frequently (probably 3-4 hours a day most every day). The bulbs is expected to last 25,000 hours.

I pointed out that at 3 hours a day, the annual savings of that electricity is about $9.00 per bulb. That's a 50% return on investment every year the bulb will be in use versus an incandescent bulb. They're expected to last about 22.8 years, so we can amortize that cost of $18 over the 22.8 year span, say $1 a year (to round it up), so you save $9 a year in electricity, but your principal declines by $1, or about $8 return on your investment.

That's a return of 44% per year, every year for the next 23 years. And not only is it a good investment, it's practically a sure thing. Of course bulbs can break over time, but even if you use it for 2 years, the bulb pays for itself, and then it's paying you every year after that. (Most LED bulbs are guaranteed for at least 3-5 years, so they are guaranteed by the company for at least that long.)

Mind you, I didn't even include other costs such as bulb costs. If an incandescent bulb costs $2 and lasts 2,000 hours (for example's sake), and the LED bulb lasts 25,000 hours, that means it would need to be replaced 13 times in the LED bulb's lifetime, or costing $26 in bulbs alone, ignoring electricity costs. That brings your ROI up to about 52%.

Obviously this is just an example. But if we stop just looking at the initial cost and ask ourselves, how can I put my money to work, it makes clear that efficient lighting isn't just saving money, it's a good investment. Actually, it's a fantastic investment. Because if you can find any other investment that pays that much with that much certainty, please, do let all of us know!

Joe's review of LED A-style "standard" bulbs

I had replaced several standard light bulbs in my house with LEDs. Cost wise, LEDs don't have a huge benefit over CFLs. They often do cost less over the lifetime of the bulb, but we're talking a few bucks. For example, I estimate a CREE 9.5 watt LED light would cost about $31.11 in electricity over its lifetime, versus $42.58 for a 13 watt CFL. That's a $11.46 savings, but considering the bulbs cost about $8-9 more than the CFLs, it would take you a long time to recoup that cost. Their costs are continuing to come down dramatically though and that may make them more attractive in more cases.

They do have several benefits CFLs don't. Of course, they don't have any mercury, so they're safer that way. Many are dimmable, so if dimming is important to you, you can actually save a lot more in electricity than CFLs if you actually dim them. They are far, far, far more durable if you need to switch them on and off frequently. We've had CFL bulbs that were rated for 10,000 hours only to die after about a year of use (roughly 1,000 hours or so) simply because they were frequently turned on and off. CFLs just aren't designed for that. LEDs on the other hand are designed to be switched on and off very frequently, thousands of times a second. Of course you're not going to do that, but still, if you're frequently turning on and off the entrance hallway, you won't have to replace that expensive CFL so often if you use an LED bulb.

And if you either have to change a bulb frequently or it's exceeding difficult to replace (in a high ceiling, for example), their 25,000 hour life can make them an attractive. That's 22.8 years at an average of 3 hours a day, but if you have them on all night, that's 5.7 years at 12 hours a day. Note that is the mean time they'll fail. As LEDs will fade in luminosity over time, "failure" is considered to be when they'll reach 70% of their original brightness. They will continue to work, but dimmer than their original spec.

There's quite a number of 40 and 60 watt replacement LED bulbs. There are some 75 watt and one or two 100 watt LED replacement bulbs too, but they are even more on the expensive side. But like the 60 watt versions, those are coming down in price as well. In addition, LEDs are instantly (or at least almost instantly) on and instantly at full brightness. Many CFLs have vastly improved in this respect, but it still can be annoying. Some LEDs do have a short pause before turning on, anywhere from a small fraction to a full second. Most of the time it doesn't make a huge difference. Once they're on, they're fully bright.

I only reviewed "soft" light LED bulbs, either 2700K ("soft" white) or 3000K ("warm" white). These colors are the closest to your traditional incandescent bulb. Note that a lot of manufacturers make "cool" or "daylight" bulbs that are 4000-6000K. Those bulbs are the most efficient as they come close to a more "pure" white, but a lot of people don't like the color, outside of a bright work station.

Here's a few of my favorite bulbs, and a few that I either didn't like or wouldn't buy again.



CREE 60W Equivalent Soft White (2700K) A19 Dimmable LED Light Bulb

Joe says: Run and get these!

This is by far my favorite. It's pretty much a drop-in replacement for most light bulbs. It has a round shape that a lamp shade can easily rest on. It has no hum, and dims down quite well (probably about 20-25%). We noticed no hum when dimmed, even using a non-LED (but fairly modern) dimmer. At 9.5 watts for 800 lumens, it's one of the most efficient LED bulbs out there. I've had really good results with the down light. (Many LEDs have a large base that cast a shadow underneath it.) They make 40, 75 and 100 watt versions as well. Home Depot just dropped their price on the 60-watt replacement version to $9.97, $15.97 for the 75-watt replacement version. They also just introduced a 100-watt version for $19.97, but it's not yet widely available. It's hard to find a bulb that cheap that works this well.

The only thing I didn't like on it was that you can actually see the LEDs in it. The bulb is frosted, but not terribly so. Frosted glass does absorb some of the light, so I'm sure this was to make the bulb more efficient at the tradeoff of an aesthetic. It's no big deal if you have it under a lamp shade or in a frosted glass. Also, there is a very noticeable dark spot on the top of the bulb. Not a big deal, but slightly annoying.

It's rated at 2700K for color, but it's slightly "cool"er than that. CREE does make a softer "TW" (true white) version, but at 13.5 watts, it's far less efficient, but not that much softer white. I wouldn't recommend that again. For a softer version, check out the Feit one I review below.



Ikea's LEDARE LED bulb E26, globe opal

Joe says: Softest light, least expensive, but not so bright.

This is actually a bulb I didn't want to like at first. For one thing, it's not the most efficient. It's 10 watts for only 600 lumens, about 25% dimmer than your standard 60 watt, even though it's advertised as such. When dimmed, I did notice a slightest hum, but you practically have to have your ear next to it to hear it. It only dims down to about 40%.

But I came to love the light. It's by far the softest light of any of them I've tested. The brightness isn't an issue of where I used it. I use in in my nightstand, and I put a dimmer on it. And it's only $7.49, so it's really inexpensive. They also make a 400 lumen version (roughly a 40 watt equivalent) that's not dimmable for only $4.49 and uses only 6.3 watts. It has the same fantastic light.



Philips SlimStyle 60W Equivalent Soft White (2700K) A19 Dimmable LED Light Bulb

Joe says: Hold off on these, for the most part.

I really wanted to like this one. Philips has made some really awesome quality LED bulbs, although you pay more for such quality. I got the impression this one was an attempt to make a more inexpensive bulb and resolve some of the issues with other LED bulbs. For one, you'll note its odd shape. The reasoning was that instead of placing the LEDs in a horizontal circle outward, they would put it in a vertical circle. That would eliminate much of the problems with downward light. Plus, by placing the LEDs far from the electronics (a big source of heat), it would ameliorate the need for a large (and expensive) heat sink. Its shape is also great for more slender units, so the light near the glass isn't exceptionally brighter than towards the outside. And at 10.5 watts, it's one of the more efficient bulbs out there. And at $9.97, pretty inexpensive.

I really liked the light. It was other things I had an issue with. First off, there is a real noticeable hum to it. It's memorable of some CFLs. And of course if your light needs multiple bulbs, that hum increases by a multiple of those bulbs. It's not terribly loud. But it is terribly annoying. I put four of them in a friend's bathroom, and even a few feet away, it's real noticeable when you turn it on and off. A couple attempts at dimming them even made it noisier. (Luckily I didn't need dimming for this application.)

I eagerly await an improvement of this one. When a newer version sans the hum comes out, I will gladly replace these with them and relegate the old ones to a place where individually the buzz won't be such a bother.



Feit Electric 13.5W Dimmable A19 Household LED Light Bulbs

Joe says: Soft light, bright, great dimming, but not so efficient

They were $10.97 at our local Costco, and some places subsidize them down to $8. I love the light on them. They're probably somewhere between the CREE and the IKEA bulbs in the softness scale. They dim fairly well, but we noticed a very quiet hum when they do. (It could just be the dimmer we had them on.) They do dim down to about 20% and have a similar dimming profile to incandescents.

They have a couple drawbacks. For one, there is a rather noticeable shadow cast below it. It doesn't project down very well. Nor does it project up all that well either. Also, this was by far the heaviest standard bulb I reviewed. The package says 9.6 ounces, compared to 4-5 ounces for the others. It's odd shape might not work so well either. And at 13.5 watts, it's one of the least efficient as well. (By comparison, most 60 watt replacement CFL bulbs are 13 watts.) But if light color and dimming is important to you, this might be a good fit.



Feit Electric 8W Dimmable Decorative Globe LED Light Bulb

Joe says: Bright light, cooler, but great for bathrooms

My local Costco sells 3-packs of these for $19.99, or about $6.66 each. At 500 lumens, they're intended to be a 40-watt bulb replacement. In practice, they're slightly brighter than that. They're more of a cooler light, nameplated at 3000K but probably slightly cooler than that. I've found they work very well in bathrooms, where you like a brighter light, but need multiple bulbs. Since they're LED, they work well in fan fixtures. (LEDs tend to work better in the presence of vibration, like with fans or garage door openers.) They are dimmable. They don't cast their light back very well, but some fixtures that's less of an issue. If you need a brighter light but multiple 40 watt bulbs, this one is a good fit for that.

There were a couple other I wanted to check out but didn't review. Philips has a couple different versions. They tended to be more expensive. I've had good experience with the light on them on an older version, but like I said, I've had just as good an experience with others. (The original ones I tried were subsidized by the local power company.)

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UPDATE (7/28/14):' The CREE 100 watt version of their A19 bulb (actually A21, somewhat larger than the A19 versions) is now widely available.

Philips SlimStyle 60W Equivalent are now $8.97 at Home Depot.

The IKEA 400 and 600 lumen bulbs are now both $4.49. A steal!

Costco's FEIT 800 lumen bulbs are now widely available at $8.97.

Update on LEDs

I helped "green" the houses of my sister and a couple friends. It's been a few years since I greened my own place, and there's been a huge improvement in a lot of lighting technologies. LEDs have become very reasonably priced, especially considering how efficient they are and how long they last.

First off, two things to look closely at are color and lumens. LEDs are typically a very pure white. Like purified water, we're not used to consuming it in its purest form. Most people prefer a softer light. Color is measured in Kelvin or K. Higher numbers (4000-6000K) are closer to sunlight and typically aren't used unless you need a pure white light. Most households use a 2700K (the "softest" light, most typically used for gentle lighting like bedrooms and living rooms) or 3000K (a "warm" white, slightly brighter used in kitchens and bathrooms). LEDs try to get close to a soft light but since LEDs run white, they may be a bit brighter than you're used to. The difference between 2700K and 3000K may be more subtle than their incandescent versions.

The other thing to look closely at is lumens. Lumens is the measurement of a bulb's brightness. Many bulbs (both CFL and LED) use "watt equivalents" to give the user an idea of what the rough equivalent incandescent bulb would be. The issue is that this number is subjective. Even amongst incandescent lights, two bulbs with the same wattage can have a different lumens. Some 40 watt bulbs can be as low as 300 lumens or as high as 500. Because the brighter a bulb is, the more LEDs have to go into it, that means it costs more to manufacture. So some manufacturers will try and pass a lower brightness bulb as a higher wattage equivalent. Look at the lumens and you can compare apples and apples.

LED have some significant advantages over CFLs. For one, they are more likely to be dimmable, or at least not be that much more expensive for the dimmable version. Some may have issues with older dimmers, but modern dimmers work (those manufactured in the last 10 years) better, or best yet, buy a dimmer specifically made for LEDs. (They'll work better with dimmable CFLs as well. We had issues with dimmable CFLs until we put it on a dimmer built for such.)

Secondly, LEDs are instant on and instantly bright. There is no waiting time for it to get bright. There may be the slightest pause when first turning on, but it's typically less than a second.

Unlike CFLs, they also work in very cold environments. That can make them a good power-efficient substitute for an outdoor light in extremely cold environments. (Most CFLs will start down to about 0 degrees and may take longer to get bright but will work). They don't, however, work in extremely hot environments. Many are not rated for unventilated enclosures. Check the label to see if it's rated for enclosures first before using in such.

I've noticed that the light from one CFL to another isn't always consistent, even when new, so when using them side by side, slight differences may be noticeable. LEDs work better if you need absolute consistency (within a brand and model, of course).

They are the most efficient technology as well. They're typically 10-25% more efficient than CFLs, and up to 83% more efficient than incandescents. They also last the longest, anywhere from 25,000-50,000 hours. That's 22-45 years assuming 3 hours a day, but in applications where they are on 8-12 hours a day (such as offices), that's 6-15 years. Cities are now using them for street lighting because high-pressure sodium lights have to be replaced every 18 months, whereas LEDs are only every 7 years, vastly reducing maintenance time as well as saving money in energy costs.

They are also mercury free. Modern CFLs have an absolute minute amount of them (typically 2-4mg or less), but still some people are concerned about them, should they be disposed of improperly.

The other area that is LEDs individually tend to be quite directional. They can be diffused with smoked glass and such, but this can actually be an advantage. For that reason, LEDs tend to work well for flood and spot lighting. For another reason, flood and spot lights tend to be expensive on their own. A spot incandescent or halogen light bulb alone can cost $4-9, and it'll only last about 1,000-2,000 hours, meaning you'll have to replace it in a year with normal use. Between the bulb costs and the electricity savings, LED flood lights can pay for themselves within about a year. I've also noticed that when replacing directional bulbs (like flood lights), you don't necessarily need as many lumens to achieve the same lighting, because the directionality of LEDs mean fewer lumens more concentrated equal the same lighting effect. Buy one to check if it'll work in your application before replacing all of them.

Finally, LEDs tend to work well in the presence of vibration. Both incandescent (particularly those not rated for "rough duty") and CFLs work poorly in areas with fans (like an exhaust fan/light in a bathroom) or vibrations like garage doors.

That's not to say they don't have downsides. The cost can be quite high. Some energy companies subsidize them to encourage people to switch, but without subsidies, they can retail for $10-20 and up. The good news is hopefully you'll never need to replace them. They also don't work in all dimmers, particularly older ones, like those manufactured over 10 years ago.

Also, they tend to be sensitive to high heat. Some people have had issues with using flood lights in insulated canisters or in enclosures. Check if they're enclosure safe before using in such an application.

In most cases, if you can use a CFL, use a CFL. Particularly in more marginal applications (rooms that are not on often, like closets), your break-even point is going to be in the years, not months. Some people like the lights of an LED better, but there's clearly an additional cost to them. With some bulbs like A19s, the cost may not be that much more expensive to warrant the advantages (instant on, dimmable, better quality light), and obviously the more you use the lights, the quicker the payback will be. But if the benefits of an LED get you to use them instead of an incandescent, it's definitely worth checking out.