Are LED Lights Worth The Cost? How to calculate your LED Savings in 5 Easy Steps



Are LED Lights Worth it? When it comes to the lighting in your house, does the extra costs of LED lights justify the cost. Here's how to know

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Are LED Lights Worth The Cost? How to calculate your LED Savings in 5 Easy Steps

There has been a trend to switch from the old-style incandescent lightbuld to the new LED (Light Emiting Diodes).


The question always comes up is: Are LED Lights worth the money?


Is the extra savings of electricity going to cover the bulb?


What is an LED Light?


LED stands for Light-Emitting Diode. Simply it’s been around a long time but has only recently caught on in the light bulb market thanks to it’s high lumens (brightness) and low wattage used (translation less money). For more information you can check out the wikipedia page here.

Why Switch?


Lifetime of LED Lights can be up and beyond 20 years! If you hate the idea of changning lightbulbs, this is pure bliss.


This is great news knowing that I won’t have to be switching light bulbs in our high ceilings until after my kids are finished Univeristy.


Of course actual usage will vary, but if you’re like me there is a certain appeal to not have to switch light bulbs every year.


Are LED Lights Worth The Cost?


Crunching the numbers is the biggest thing. Here is how to crunch the numbers in the simplest way I can see it. We are only interested in the money we save.


Take the light bulb you will be replacing (in my case 90 watts), and subtract from it the wattage you will use with the new LED (15 Watts), for a difference of 75 watts.

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How to calculate your LED Savings in 5 Easy Steps


Step 1:  Calculate the Watt Difference

Current Lightbulb Wattage (90) minus New LED Wattage (15) If you are replacing a 90 watt bulb with a 15 watt bulb you are saving 75 watts per hour.


Step 2: Find out Your KiloWatts per hour rate


For us we live in part of the country that has some decent rates, it can range from $0.07 to $0.20 per kWh (kilowatt per hour). So you have your difference (75 watts), multiplied by your kilowatts (1000 watts) per hour rate. Where I live it’s $0.10.


STEP 3: Calculate what you save on an hourly basis


Take your Wattage difference in Step 1 (75 watts) and multiply it by your kilowatt rate per hour, then DIVIDE that by 1000, to get your watt per hour.


WATT DIFFERENCE x Kilowatts per hour / 1000


Here is what I save on an hourly basis: 75 watts *$0.10/1000=$0.0075 cents per hour   Not a huge savings when you break it down to an hourly rate. But as we all know, look after the pennies (or tenths of a penny in this case) and the dollars will take care of themselves.


STEP 4: Next figure out how much that light is actually on

Since I have the first snowfall today it’s safe to say we will be having lots of hours on the light bulb. On average I would say we use 5 hours of light use through the year.


STEP 5: Calculate your Annual Savings and if it is worth it.

So here is my annual savings:

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Hourly Savings (Step 3)* Daily usage  (Step 4)*365 (Days used in a year)

$0.0075*5*365 = $13.68


So in the course of one year I will save $13.68 for one of my BR40 LED lights 15 watt bulbs over the current 90 Watt incandescent lightbulb. Given that the cost of a light bulb was $14.99, I will start seeing savings in the second year.


Right now these bulbs are the same price as the normal Par 38 90 watt bulb too so it makes it an even easier decision.


Update: I found a great calculator online that will compare the costs and show you your lifetime savings. You can find it here.

Lifetime Savings and Hours of Use


Given that the packaging says the life of one of these LED lights is 3 hours of use a day for 22.8 years. I stand to get a total of (3 hours a day, for 365 days a year, 22.8 years) = 24966 hours of usage.


That means if the light bulb last that long, I will have a total savings of $187.25 over the life time of that one bulb based on Hours X Savings per Hour (24966 * $0.0075). I won’t subtract the lightbulb cost from it because I would have to buy 3 incandescant lightbulbs over that same time.


So the saving for me is actually greater. What do you think? Are LED worth the switch? tell me what you decide to do?


Final Formula Savings Shortcut

If you are wanting to do a quick calculation here is a quick one:


Hourly Savings X


Hours of Estimated Use

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MINUS Cost of the LED


PLUS Cost of Additional Bulbs over the Years

TIMES Average Lightbulb Cost (One last 1000 hours, so 25 lightbulbs @minimum $1.00), mine are the same as an LED so it’s $15.


My numbers look like this $0.0075 X24966 + (25*$15) – $15 = $547.25 Per Bulb


Conclusion: Are LED Lights Worth it?


From the above it looks like I will be saving a ton of money based on the above numbers. Even before including the cost of buying all the replacement bulbs.


Because of this I have decided to replace all of the lights in my upstairs with LED bulbs. How do the numbers work out for you?


Update since I wrote this I went out and bought 8 of these bulbs for our living room. Giving me a savings north of $4000 over the life of the bulb!


Let me know your thoughts below! If you are interested in LED Lights  check them out at Amazon (Note: the link are affiliate links so I do receive a commission, at no extra cost to you) which goes to supporting the site.

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