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LED lighting isn't always a bright idea

While LEDs last decades and sip electricity, replace the wrong bulbs and you could be dead before you break even.

By MSN Money Partner Sep 6, 2013 10:29AM

This post comes from Stacy Johnson at partner site Money Talks News. 

MTN logoThe power bills for my South Florida home average more than $300 a month year-round. So, as you might imagine, I'm all about saving energy.

A few years ago I spent close to $5,000 to replace an old central air system. I've installed extra insulation, a programmable thermostat, dimmer switches and energy-efficient appliances. You name it, I've done it.

So when one of my buddies opened a business specializing in LEDs, I lit up. My home is now awash in low-energy lighting. The dark side: My bank account is lighter by more than $400.

Worth it? Well, let's say I wish I knew then what I know now.

Don't do what I did

Before I replaced my lighting with LEDs, I knew what you probably know: They use a fraction of the electricity of incandescent bulbs, last a lot longer and generate less heat. How can you go wrong?

Here's how: not prioritizing.

The bulbs I replaced were the ones I could point to and say, "Look! I just put in LED lighting!" In other words, I put LEDs where you can see the exposed bulbs -- in the recessed ceiling fixtures in my kitchen, along with similar fixtures in the living room and master bedroom. Altogether, eight bulbs in the kitchen ($15 each), six in the living room ($20 each), and four in the bedroom (two at $20, two at $15). Total cost? $310.

The bulbs I didn't replace were the main light in the middle of my kitchen ceiling, the light in the laundry/pet room, and the light below the ceiling fan in the master bedroom. Those bulbs don't show. They're within glass fixtures.

As you saw in the video above, the more a bulb is used, the more LEDs make sense. The bulbs I should have changed were the ones I didn't -- the primary lights in the kitchen, the laundry room and the master bedroom. These are the lights that are on most often. The ones I changed aren't on nearly as much. They're basically accent lights.

Earth encircled by money (© Bob Jacobson/Corbis)

To rub a little salt in the wound, I also learned after the fact that LEDs require different dimmer switches than those I was using. I had to replace six, at a cost of $22 each.

Computing break-even on LEDs

Shortly after installing my new LEDs and dimmers, I read an article called "Are LED and CFL bulbs worth the money? Don't be left in the dark" from Simple Family Finance.

In this post, author Chris Tecmire did what I should have done -- computed exactly how much LEDs save and how long it takes for those savings to offset the cost of the more expensive bulbs.

To do his comparison, he first computed the cost in both electricity and bulbs for 25,000 hours' worth of incandescent, compact fluorescent and LED light.

His assumptions:

  • Electricity cost -- 13.5 cents per KwH (you can get the price you pay from your electric bill).
  • Incandescent -- Cost is 50 cents a bulb, life 800 hours.
  • Compact fluorescent -- Cost is $2 a bulb, life 4,000 hours.
  • LED -- Cost is $20 a bulb, life 25,000 hours.

His results for the total cost for 25,000 hours of electricity, including the bulbs:

  • Incandescent -- $218.50.
  • Compact fluorescent -- $64.63.
  • LED -- $53.75.

Conclusion? LEDs cost 40 times more than incandescent, but since they use about 75% less electricity, they win in the long run.

But, as my accounting professor used to say, in the long run we're all dead.

If you use a light five hours a day -- as I do for the ones I didn't replace -- 25,000 hours translates to 5,000 days or about 14 years. But if you use the light only 30 minutes a day (like the ones I did replace), 25,000 hours becomes 50,000 days or 137 years.

Let's rearrange Chris' math to reveal the break-even cost:

  • At 30 minutes a day, an incandescent bulb uses $1.48 in electricity annually. The LED bulb uses only 25 cents' worth. So the LED saves $1.23 per year. Since it costs $20, it will take 16 years to recoup the cost in electricity savings.
  • At five hours a day, the incandescent uses $15.42 in electricity annually. The LED bulb uses only $2.42 worth. So the LED saves $13 per year in electricity, meaning you'll break even in less than two years.

The bottom line

Granted, there's more to LEDs than breaking even. All of us presumably want to reduce our carbon footprint and be a pal to Mother Earth. But if you're focusing on cost, the conclusion is inescapable: If you're going with LEDs, forget aesthetics. Replace the incandescents you use the most.

Unless, of course, your goal is lowering the power bills for your heirs.

More on Money Talks News:

Sep 9, 2013 11:24AM
Your Economics professor should have said "In the long run we're all dead."
Sep 8, 2013 11:56AM
20$ seems a high estimate of the LED cost.Go to Ebay much cheaper.
Well, Stacy, at least your buddy is smiling, for all the money s/he made off you.
Nov 11, 2013 7:37PM
I buy my LED light bulbs at Costco... they are amazing and I have already had them for about 2 years... they are 3 for 19.99 and are only 7.5 watts per bulb (Amounts to a regular 40 watt bulb... but who needs anything brighter?) I love them and have saved over 450 dollars on my energy costs per year... but when you figure I only spent about 200 on the bulbs for the whole house... I am really making out. I broke even in less than 6 months!
Sep 8, 2013 3:26PM
I have replaced some of cfl's wth LED's. I have x10 system and all 3 barlights would not dim with LED so I use 2 incandescent and 1 LED. Dims great! I think it depends on the load,wheather it is inductive or capacitive, from an electricians point of view.
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