Energy Efficient Light Bulbs: Estimating Your ROI

What's the return on investment for installing energy efficient lighting, like halogen, CFL and LED light bulbs? Here's how to find out.

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By Brian Clark Howard

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Replacing Incandescent Light Bulbs

Fortunately, there are a number of ways to get improved lighting, including better bulbs, but also with other efficiency technologies. Let's first take a look at a typical home energy bill, which totaled $2,200 in 2009, according to the Energy Star program. An average of 12% of that goes to home lighting, or $264. Let's say that you a typical homeowner and use only standard incandescent light bulbs, and you currently spend $264 a year to illuminate them.

Trouble is, regular old incandescent light bulbs are inefficient beasts, and up to 98% of the energy they consume is wasted as heat, not light. Compact fluorescent light bulbs, on the other hand, are on average 75% more efficient than incandescents. So if you made a complete switch over, you might cut your lighting energy bill by three-fourths, from $264 to $66. (CFLs like the Philips bulbs pictured here cost about $2 per bulb at amazon.com.)

Quite a few households have made such a wholesale switch, and they do start saving energy right away. However, there are a few cases where fluorescent tube and compact fluorescent light bulbs (CFLs) aren't optimal and will wear out quickly, so a somewhat more measured approach will give the highest payback, as well as most attractive and flexible light.

By the way, if you decide to go for more expensive LED (light emitting diode) lights, which are up to 90% more efficient than incandescents, you would end up with an annual lighting bill as low as $26.

When you are shopping for lighting, always look for the EPA's Energy Star logo, which certifies a wide range of quality criteria, as well as minimum efficiency. Among other specifications, an Energy Star CFL can't emit an audible noise, it must turn on in less than a second and reach at least 80% of its output within three minutes, and it cannot contain more than 5 milligrams of mercury. The EPA estimates that each Energy Star CFL, when properly used, saves about $40 over the lifetime of the bulb compared to an incandescent, and the payback time can be just months, depending on how much it is used.

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