How Much Does LED Lighting Save in Energy Bills? (Helpful Calculator)

If you want to save hundreds of dollars every year, then keep reading.

I’m going to share with you how much you’re going to save in energy bill just by swapping all the lights in your home for LED bulbs.

We’re going to get into the specifics and try to dial in on how many hundred dollar bills will stay in your wallet just by making the switch.

You’re able to save up to $600 a year just by switching all the lights in your home. The upfront cost will be covered in less than half a year. Incandescents require replacement every 3-4 months, which is inefficient and costly. LED bulbs will last you for years and cost less to run.

In this guide, you’ll learn about:

  • The upfront cost of LED vs incandescent, and why it can be misleading
  • The energy consumption of LED bulbs
  • The savings you earn in a month and a year with handy calculator
  • Additional considerations to account when calculating savings

Sounds good?

Let’s start at the beginning investment you have to make…

LED Lighting Upfront Cost

You already know that it costs more than an incandescent bulb. Walk down the lighting aisle in a shopping store, and you’ll see a big difference between incandescent and LED.

Because of its growing technology, the price of LED bulbs is continually dropping, but there’s still a big difference compared to incandescents.

But, to really compare the two, you need to get them on an even playing field.

You see, a typical 60-watt incandescent bulb costs only $1.00. A 10-watt LED bulb that produces the equivalent amount of lighting to the incandescent bulb will cost you around $6.

But now you have to factor in the lifespan of the bulbs. An incandescent bulb will have a lifespan of 1,200 hours. An LED bulb, on the other hand, will last you for 20,000 hours. You’d have to buy 16.6 incandescent bulbs to last as long as 1 LED bulb!

So, at the end of the day, you’re spending around $16 for incandescent bulbs as opposed to $6 for LED bulbs.

And to give you a clearer picture:

If you turn on your lights at, say, 8 pm till 5 am, that’s 9 hours a day. An LED bulb with a 20,000-hour lifespan will be operational for 2,222 days, or around 6 years. An incandescent bulb, on the other hand, has to be replaced every 4 months!

Okay, I’m sure you’re saying to yourself, nothing works perfectly. Everything breaks, so what makes you sure LED bulbs will last for 6 years? You’re right there.

But I’m sure you’ll agree that even if it lasts for only 5 years, you’re still saving a lot of money!

In short, let’s put the upfront cost side-by-side for 20,000 hours of service:

  • LED bulb: $6
  • Incandescent bulb: $16

LED vs. Incandescent Energy Cost CalculatorLED light

Next, we’ll cover the cost of running these illuminating globes.

To find out the energy consumption of a bulb, you’ll have to use the formula wattage of lamp converted to kilowatts, multiplied by hours used. This gives you KWh. KWh is how your utility company measures your usage, and they charge you a certain amount per kilowatt-hour. So we have…

Total Energy Cost = average energy cost(c/KWh) * KWh

The average energy cost is dependant on where you live and can vary quite a bit. Here are a few examples to give you a clear picture:

  • Idaho, US: USD 0.08/KWh
  • New York, US: USD 0.18/KWh
  • London, UK: GBP 0.14/KWh (equiv. to USD 0.18)
  • Singapore: SGD 0.24/KWh (equiv. to USD 0.18)
  • Solomon Islands: USD 0.99/KWh

A Google search or a quick look at your utility bill will tell you how much they’re charging you for one KWh. Once you know the numbers, we can start measuring the cost of running our bulbs.

Let’s start with Thomas Edison’s baby, the incandescent light bulb. Let’s use Idaho for our example. Let’s also assume the lights are switched on for 9 hours a day, 7 days a week.

60W = 0.06KW

Total Energy Cost = USD 0.08 * 0.06KW * hours

Monthly (9 hours for 30 days, 270 hours)Yearly (9 hours for 365 days, 3285 hours)9 hours for 6 years (20,000 hours)
$1.296$15.768$96

Great. Now let’s do that for the LED bulb. We’ll use the same location and the same amount of usage time.

10W = 0.01KW

Monthly (9 hours for 30 days, 270 hours)Yearly (9 hours for 365 days, 3285 hours)9 hours for 6 years (20,000 hours)
$0.216$2.628$ 16

Total savings yearly = $15.77 – $2.63 = $ 13.14

Those numbers are clear as day. But, there are a few more things for you to consider.

Am I Really Saving Just A Dollar A Month By Swapping To LED?!dollar

Of course not. The numbers above are only for one bulb. The average US household has more than 40 sockets for light bulbs [source].

If we multiply the numbers by 40, we’ll get…

Incandescent Bulb Monthly Cost = $51.84

LED Bulb Monthly Cost = $8.64

Total savings per month = $43.20

$40 can get you 5 large Domino’s Pizza. You can subscribe to Netflix as a Premium user for 2 months at $40. That’s money you can spend on your hobbies, home improvement, or a dinner date.

And, if you set aside the money, not touching it for a year, you’ll have $526. That’s enough extra cash to buy a few of the luxuries in life to enjoy them. There’s no extra work to be done. All you have to do is replace dated bulbs with better technology, and you’ll start saving money.

I know, it is nice to have such a detailed explanation, but I wanted to get more for you.

Below, I have created the calculator that estimates the savings you will make by merely swapping old incandescent bulbs in your house. It uses exactly the same logic, as I have explained in this section.

The only difference is that it works for your specific situation. Input your electricity rate, average usage of lights and how many lights you want to swap and in a second you will know how much money you can expect to save.

Savings Calculator – Additional Considerations

The calculation above is a great estimate, however it is a simplified version. It didn’t factor in the cost of replacing incandescent bulbs every 4 months. It also doesn’t tell you when the upfront cost is covered and you start making savings from switching to LED.

So let’s take everything into account…

Incandescent

Yearly Electricity Cost = $630.72

A bulb has to be replaced 2.63 times each year.

Cost of replacements each year = $105.2

Total Cost = Yearly Electricity Cost + Cost of Replacements = $735.92

An LED setup will cost you only $105.12 yearly. That’s more than $600 that you get to keep in your wallet. Sure, it might cost you $240 to buy 40 LED bulbs initially. But you’ll break even in just after 5 months!

Everything saved afterward is a return of your investments. Throughout the lifespan of an LED bulb(20,000 hours), you’ll save a total of $3,640! Imagine what you can do with that kind of money. You’ll be able to treat yourself to a long-overdue holiday, or pay off your credit card debt, or set it aside and let compound interest do its work.

Step by Step Approach

Here’s the basic formula so you can calculate the costs of running LEDs in your home.

  1. Find out the electricity rate in the area you’re living in. Call your electric supplier company or find out here: US
  2. Calculate how many bulbs are used in your house.
  3. Shop around for the correct LED bulbs and total up the initial cost.
  4. Determine the KW and hours used. You can get the kilowattage of a light bulb by dividing the wattage by 1000. Next, take the number of hours you leave your light on and multiply it by 30(month) or 365(year).
  5. Multiply KWh by electricity rate to get the cost of running one LED bulb. Multiply that with the number of bulbs to get new cost of lighting your home, whether it’s for a month or a year.
  6. Do the same calculations for the current lighting you have. You might have a few incandescent bulbs with different wattages. You can either average them up or calculate them in groups of similar wattages. That will give you the old cost of lighting your home.
  7. Subtract the new cost out of old cost, and you’ll get the amount of your savings. From there, you can determine how long it’ll take for you to cover the initial costs and start profiting! Or skip steps 3 to 7 and let my calculator above do the heavy lifting for you and only subtract the initial purchase cost from the results.

Final Words

I hope this guide covers everything you need to know about the financial aspect of converting to an LED-lighted home.

I’m sure you see the transition will only bring positives to your life. You’re not just fighting global warming by reducing the carbon footprint and the energy wastage of your home. You’re also holding on to your hard-earned cash so that you can treat yourself or your family with it.

It’d be crazy not to do it!

Start calculating now how many hundred dollar bills will stay in your wallet just by taking this decision. Do the calculations above.

  • Are you saving more than the example I’ve given?
  • Do you have an idea of what you’re going to spend the saved money on?

Let me know in the comments below.

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