In an earlier post on lighting, LEDs—You’ve Come A Long Way, Baby, Sam Leppanen outlined the many advantages of brightening up with LEDs. This post zooms in on lighting’s total cost of ownership, so you can directly compare the tab for LED bulbs with those for Compact Fluorescents (CFLs) and incandescent bulbs.

I’ve called the math Xtreme, not because it’s hard, but because the payback on LEDs is dramatic.

We’ll walk through the savings calculations using a model adapted from the LED Starlight website. To adjust the model for your situation, feel free to substitute assumptions, such as the cost of bulbs, the cost of electricity, or the number of bulbs in your household—the results will still be dramatic, I promise.

Let’s start with the bottom-line lighting costs for your household. Assuming you have a total of 30 light bulbs operating over a period of 60,000 hours each (the lifespan of the average LED), your total direct savings would be more than $20,000 if you used LEDs versus incandescent bulbs.

That’s the Xtreme part.

OK, now for the easy-peasy part. Let’s break it down step-by-step using grade-school arithmetic. The total direct savings is the sum of your savings on bulbs plus electricity. Using the chart below, let’s look at the savings on bulbs first.

COMPARISON OF LIGHTING TYPES BY TOTAL COST
BULB COST		LED	CFL	Incandescent
1	Lifespan of bulb (total hours of operation)	60,000	10,000	1,200
2	Bulbs needed for 60,000 hours of use	1	6	50
3	Cost per bulb	$15.98	$2.98	$1.25
4	Total bulb cost	$15.98	$17.88	$62.50
ELECTRICITY COST		LED	CFL	Incandescent
5	Watts per bulb (equivalent to 60w incandescent)	6	14	60
6	Kilowatt hours (Kwh) of electricity used over 60,000 hours	360	840	3,600
7	Total electricity cost (at $0.20 per Kwh)	$72.00	$168.00	$720.00
TOTAL COST PER FIXTURE		LED	CFL	Incandescent
8	Bulb cost plus electricity cost	$87.98	$185.88	$782.00
TOTAL COST PER HOUSEHOLD		LED	CFL	Incandescent
9	Number of bulbs per household	30	30	30
10	Total cost of bulbs per household	$479.40	$536.40	$1,875.00
11	Total cost of electricity per household	$2,160.00	$5,040.00	$21,600.00
12	Total cost per household	$2,639.40	$5,576,40	$23,475.00
13	Savings versus incandescent	$20,835.60	$17,898.60	$0

The difference in the lifespan of the three bulb types is huge (line 1 of the chart): it takes 50 incandescent bulbs to operate for 60,000 hours versus only 1 LED bulb (line 2 = 60,000 ÷ line 1).

So despite the fact that the LED bulbs have a higher up-front cost (line 3), the true cost of the bulbs alone is one-fourth that of incandescents (line 4 = line 2 x line 3).

Now let’s look at the cost of electricity. LED bulbs use only one-tenth the electricity of incandescent bulbs to produce the same amount of illumination. For example, it takes 60 watts to power a 60w incandescent bulb, but only 6 watts to produce the same amount of light with an LED bulb (line 5).

Over a 60,000-hour operating period, the incandescent bulb will use 10 times the power (line 6 = line 5 x 60,000 ÷ 1,000), costing ten times as much as an LED (line 7 = line 6 x $0.20).

Therefore, on a per-fixture basis, the LED light costs less than $90 to operate over the life of a single bulb compared to $780 for a pile of 50 incandescents (line 8= Line 4 + line 7).

And on a whole-house basis, assuming 30 bulbs per house (line 9), the total bulb cost (line 10 = line 4 x line 9) plus the total electricity cost (line 11 = line 7 x line 9) is the total lighting cost for the household (line 12 = line 10 + line 11).

The savings of over $20,000 (line 12, column 3 - line 12 column 1) may seem hard to believe. What’s the catch? The savings are calculated over the life of an LED bulb, which is very long—60,000 hours. If you use the bulb four hours a day, it lasts 41 years. So the $20,000 savings can be broken down to $500 per year, which is still very substantial. Even if you only convert three bulbs this year, you’ll save $50 if you consider the lifetime costs.

Remember that these calculations look only at the consumer’s direct out-of-pocket costs. There are many other costs that, taken together, are even greater—the greenhouse gases produced by manufacturing and powering incandescent bulbs, the environmental costs of mercury and argon waste from CFLs, the time it takes to purchase and install new bulbs (got any impossible-to-reach places?), and the increased heat and fire risk of incandescents.

All in all, LEDs look like the way to go in terms of the big, green picture. We’ll take on more of their pros and cons in a future blog, but for now hold this thought—LEDs are Xtremely smart.

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