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How Much Money Can I Save by Switching to LEDs?

How Much Money Can I Save by Switching to LEDs?

Last updated on February 17, 2025

On average, lighting consumption accounts for about 15% of the electric expenses of a typical facility. However, when discussing energy savings and the implementation of energy-related cost reduction measures, most facilities focus only on the big appliances.

Energy-efficient lighting measures are equally instrumental in helping facilities and households greatly save on huge electric bills.

Different options can be proposed to introduce energy-efficient lighting in a certain space.

One way is to consider the type of lighting bulbs used in a home. Houses that use incandescent lighting bulbs spend more on their electric bills compared to similar households that use LED lighting.

The energy efficiency and resulting cost savings also extend to industries and commercial entities that require relatively large investments.

Another effective approach to reducing the energy from lighting and the costs spent in households is by installing timers and dimmers. With automated timers, lights can be turned off when not in use, and dimmers minimize the amount of energy spent by the bulbs by reducing the light levels.

Also read: How To Choose a Dimmer Switch

LED Lighting

Light-emitting diodes are solid-state lighting technologies that use semiconductors to produce light from electric current. LED products are energy-efficient lighting alternatives, with an efficiency of up to 90% compared to incandescent lighting bulbs.

LED bulbs, unlike incandescent bulbs and compact fluorescent lighting (CFL), do not burn out but instead gradually lose their brightness over time when their lumen depreciates. The advantage of this feature is an indication for you to consider replacing the bulb.

The proper moment to replace the fixture is when you notice the light brightness has depreciated by 30%. Considering their shelf life, they last 25 times longer than traditional lighting alternatives like incandescent bulbs.

LED lighting technology is available in a variety of options, including typical bulb wattage like incandescent bulbs, reflector bulbs, step lights, track lights, porch lights, outdoor lighting, undercabinet lights, pathway lights, and flood lights.

The options also include a variety of colours and hues of the colours. The timer and dimming options that can be tied to LED bulbs make them a great solution for any environment, including indoors and outdoors.

LED lighting can also be solar-powered, providing a reliable option for people seeking sustainable approaches.

Cost of LED lighting

LED light bulb costs have decreased considerably since they were introduced on the market, and the prices are continuously dropping as more products are introduced. However, LED light bulbs are still relatively more expensive than incandescent bulbs. 

While this may easily sway opinion towards incandescent bulbs, it would be a wrong choice.

Also, read;

LED lighting bulbs are the best alternative when assessing both the initial investment cost and the long-term benefits because of their long lifetime, efficiency, versatility, low energy consumption and reduced total energy cost.

Estimating how much money you can save from using LED lights.

However, the other noticeable detail is that LED bulbs have a longer lifespan than incandescent bulbs. While the incandescent bulb has a lifespan of about 40 days, the LED bulb can last up to a year and a half.

E-GREEN ELECTRICAL SAVINGS CALCULATOR

How much will you Save with LED’s

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Disclaimer

These calculations are indicative figures only and should not be the basis of any major investment.

These calculation don’t consider the labour invested to change the lamps, nor the price of the lamps.

Some lighting upgrades could be subject for Energy Savings Certificates, resulting in more savings.

For a more accurate assessment please contact an energy efficiency professional.

These calculations are indicative figures only and should not be the basis of any major investment.

These calculation don’t consider the labour invested to change the lamps, nor the price of the lamps.

Some lighting upgrades could be subject for Energy Savings Certificates, resulting in more savings.

For a more accurate assessment please contact an energy efficiency professional.

Let us look at savings. How much can one save by opting for an LED bulb instead of an incandescent one? When considered in a year after acquiring the bulb, the cost of an incandescent bulb is $10.95 while the cost of the LED bulb is $1.83. 

Considered over a span of 20 years, for a household with five bulbs of 60 watts, the cumulative expenses rise to $1000 for the incandescent bulb and $100 for the LED bulb. So, in 20 years, a household using 5 LED bulbs saves approximately $900 compared to a household that uses five incandescent bulbs.

Also read: How to Choose LED Light Bulbs For Your Home

If you consider huge factories and industries that use more energy, the estimate over 50,000 hours of lighting with an incandescent bulb is $300, while that for an LED bulb is $50, with each using 50 bulbs and five bulbs, respectively. 

If you consider that these spaces have about 20 different bulbs, then that means for 50,000 hours, the incandescent bulbs cost rises to $6,000 from 1,000 bulbs, while the cost for LED lighting rises to $1,000 from 100 bulbs.

Overall, to run a factory for 50,000 hours with  20 different bulb spots, using the LED bulbs saves the factory $5,000 dollars.

How Much Energy Do LEDs Save (Technical Overview)

To understand the savings potential, let’s first look at the energy consumption of LED bulbs compared to older lighting technologies. To generate around 800lm

  • Incandescent=> 60 watts
  • Halogen bulb => 43 watts
  • CFLs bulb => 14 watts
  • LEDs = 9 watts 

Assuming you have 10 bulbs and use them for about 5 hours a day, let’s compute the annual energy consumption for each bulb type. Assume an electricity rate of $0.40 per kWh

  1. Incandescent vs. LEDs:
    • Annual energy consumption difference: 1,095 kWh – 164.25 kWh = 930.75 kWh
    • Annual cost difference: 930.75 kWh × $0.40 = $372.30 saved per year
  2. Halogen vs. LEDs:
    • Annual energy consumption difference: 785.5 kWh – 164.25 kWh = 621.25 kWh
    • Annual cost difference: 621.25 kWh × $0.40 = $248.50 saved per year
  3. CFLs vs. LEDs:
    • Annual energy consumption difference: 255.5 kWh – 164.25 kWh = 91.25 kWh
    • Annual cost difference: 91.25 kWh × $0.40 = $36.50 saved per year

So, at $0.40 per kWh, the savings become:

Switching from incandescent to LEDs could save you $372.30 annually
Switching from halogen to LEDs could save you $248.50 annually
Even switching from CFLs to LEDs could save you $36.50 annually

These calculations assume:

  • 10 bulbs
  • 5 hours of use per day
  • Electricity rate of $0.40 per kWh

The higher electricity rate makes the energy savings even more attractive, providing a strong financial incentive to switch to LED bulbs.

How Do Bulb Lifespans Affect Costs And Savings?

Incandescent light bulbs have an average lifespan of 1,200 hours. If used for 2 hours daily, they would need replacement approximately every 1.64 years. This results in an annual cost of around $30 solely for the bulbs.

In contrast, LED light bulbs last about 25,000 hours. At the same usage rate of 2 hours per day, a single LED bulb would only need replacement once every 34.25 years—essentially a lifetime for many.

Over that 34.25-year span, using incandescent would cost over $1,000 in replacement bulbs alone.

In Conclusion

LED lighting is used almost everywhere. Its energy efficiency and versatility make it the ideal lighting solution for households and industries that are looking to save and use green energy.

Also read: NSW Schemes For LED Upgrades – $33 LED Upgrade

The prices for LED bulbs have significantly dropped, and they are now available in a wide variety of options for almost every lighting need. 

As highlighted, the long-term benefits of adopting LED lights far outweigh any alternatives that are cheaper. Furthermore, the quality control options and energy-saving enhancing measures such as automation and dimming make this a must-have technology.

How much energy do LEDs save compared to traditional bulbs?

Compared to incandescent bulbs, modern LEDs consume less energy – almost 90% and 70% when compared against Halogen bulbs. This makes LEDs the best low-cost lighting available.

How much money can I save annually by switching to LED lighting?

Depending on usage, one can save a lot of money by switching to LEDs. For instance, 10 incandescent bulbs changed to LEDs will reduce the budget for electricity by $372 annually on a usage period of 5 hours a day and on an electricity rate of $0.40 per kWh. These savings can rise with energy rates and usage.

What is the typical lifespan of an LED bulb?

In comparison to the incandescent bulb duration of up to 1,200 hours and the halogen bulb period of 2,000 hours, LEDs live up to 25,000 hours. This means you’ll have to replace incandescent bulbs 20 times and halogen lights 13 times before replacing LED lights.

Are LED bulbs dimmable, and do they require special switches?

While most LED bulbs are readily dimmable, they will require a dimmable switch to function properly. The packaging will have information regarding switch compatibility.

Can LEDs be used outdoors or in extreme temperatures?

Yes, LEDs can be used outdoors since they can survive in extreme temperatures. However, when buying, check their waterproofing capabilities just to be sure of where to use them. 

What is the impact of timers and dimmers on the efficiency of LEDs?

Correct installation and functionality of timers switch lights off at times when they are not required. On the flip side, dimmers enable users to reduce the intensity of light, thus saving energy and prolonging the life of the bulbs.

How does the initial cost of LEDs vs. traditional bulbs compare?

The initial costs of LED bulbs will be high. It will cost between AUD 10 to 14, whereas traditional bulbs will cost AUD 2 to 3. But the best part of LED’s high costs is that it will consume less energy and outlive traditional bulbs. If you switch to LED from incandescent, you have a potential saving of $900+

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E-Green Electrical

E-Green Electrical is a top tier energy efficiency company based in Sydney. We focus on utilising government rebates to help reduce our clients energy consumption by installing energy efficient solutions. E-Green boasts a rich heritage within the realm of energy efficiency, consistently staying up to date with cutting-edge technologies to deliver optimal results for our valued customers.

We don't just sell products and services; we also provides tips and information on how to help reduce energy consumption. We believe in using energy wisely and teaching others how to do the same. For E-Green, it’s important to share knowledge with the community. That's why we regularly write articles about saving energy, new government rebates available and increasing sustainability.

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