How Can You Save By Upgrading to LEDs? 

Key Takeaways:

• LEDs consume up to 75% less energy than traditional incandescent bulbs, significantly reducing electricity bills.
• LEDs last much longer (25,000 to 50,000 hours) than incandescent bulbs, reducing replacement costs.
• LEDs emit minimal heat, lowering cooling costs in warmer climates.
• Financial incentives and rebates are available to offset the cost of upgrading to LEDs in Australia.

Would you believe that you spend 10% and 40% more on your utility bills due to residential and business lighting needs respectively? Yes, this is confirmed by the Australian Government Energy Department.

Fortunately, it is possible to bring this cost down, but how? The straightforward answer is switching to energy-saving LED lights.

In this post, we will go deep into what LED lights are, how they work, and the specific amounts they can help you save. Pay attention and you will find the exact solution you need to start paying lower utility costs while enjoying maximum benefits.

What is LED Lighting?

In simplest terms, LEDs or Light Emitting Diodes are special types of semiconductors that give out light whenever current flows through them. Unlike traditional incandescent lights, LEDs consume very little electricity because they don’t need to heat any filaments to produce heat – they only need current to flow through them. 

Below are the specific ways you can save with LEDs:

LEDs Save Energy with Higher Efficiency

One thing you will love regarding LEDs is their low electrical power demand in contrast to incandescent and compact fluorescent lamps. The Energy Department in Australia says LEDs have a saving potential of up to 75% compared to traditional lights. 

The reason for this is simply that traditional lights rely on filaments to produce light. These filaments require a lot of electrical energy to heat up until they are hot enough to give out lights.

On the other hand, LEDs have no filaments to heat. As mentioned, they only need electricity to flow through them and dislodge electrons which then undergo an energy transition process to give out light. This process requires far less energy than heating filaments in incandescent lamps. 

The savings through energy efficiency translate into cost savings. When you use less energy, your power bills also go down by the corresponding amount. So, if you used to pay, say $1000 for your lighting alone, now you will only pay 35% of that which translates to $350. Some huge savings there! 

Less Replacement and Durability

Another way through which LEDs save money is their durability which leads to less need for replacement. To be precise, the Australian Government, via the Energy Department, says, LEDs run for about 25,000 hours to 50,000 hours. Incandescent lights, on the other hand, will just last between 1,000 to 1,500 hours.

This means you will require more replacements when using incandescent lamps compared to using LEDs. On average, you will replace your incandescents 25 to 50 times more than if you use LEDs.

Let’s consider the case where an incandescent bulb costs $5 in Australia and the price tag on LEDs is $75. By the time your LED bulbs stop working, you have spent somewhere between $125 to $250 on replacements, which is quite a large sum when we’re all trying to be more economical!

Savings on Your Cooling Unit

Additional savings can be achieved on air conditioning costs, after upgrading to LEDs. According to experts, incandescent bulbs waste about 90% of their electrical consumption in the form of heat.

This heat adds to the overall temperature in your home raising it to uncomfortable levels, especially during the hot summer months.

As a result, the cooling unit in your home must work harder to keep the temperature within comfortable levels. This further adds to your already escalating energy bills pushing them higher. 

On the contrary, LEDs use nearly all energy on light and emit no heat. This means they will never tamper with your indoor temperature or comfort. Consequently, the burden on your air conditioner will be much lower helping you achieve more savings on utility bills. 

Fewer Lights Needed

When it comes to the number of lights you need to properly illuminate a room, you will mostly require fewer lights with LEDs than traditional bulbs. The reason for this is simply that LEDs distribute heat uniformly and only shed light where it’s needed. 

With traditional bulbs, light is uniformly distributed and doesn’t focus on target areas. This means a homeowner using these lights will end up wasting light all over, and this can lead to light pollution and energy waste. 

Potential Savings on Electrical Repairs

Another advantage of LED lighting is the potential savings on electrical repairs and services.

As indicated earlier, traditional incandescent bulbs are notorious for their short life—they often burn out and need frequent replacements. 

This not only means new bulbs to buy but may also lead to frequent calls to your electrician.

On the other hand, LED lights are designed with durability in mind. They have a very long lifespan and are much more durable, with less replacement needed, thus saving you money in the process.

Moreover, the energy efficiency of the LEDs means that they draw less power from your electrical system, hence reducing strain on circuits and the entire wiring system. This reduces the risks of short circuiting, which would result in electrical appliance damage and extensive electrical repairs.

Savings with Australia’s LEDs Government Rebates

The Australian government realizes the benefits associated with LED lighting and hence encourages people to switch to this technology.

One way through which it promotes the adoption of LED technology is through rebates and incentives. These rebates can largely lower the upfront cost of acquiring and installing LED lighting systems.

Some noted examples include:

ESS New South Wales: This program extends subsidies to eligible Aussies, helping them upgrade from existing fluorescent lighting to energy-efficient LEDs. Whether you are upgrading 10 or 200 lights, the value will be $33 as a one-time payment.

VEET Victoria Victorian Energy Efficiency Target: This one takes care of improving energy efficiency and hence provides incentives for switching to LED lighting.

REES—South Australian Retailer Energy Efficiency Scheme: Offers rebates and discounts to both households and business enterprises for switching over to LED lighting. These rebates are particularly meant to cover a significant portion of the installation cost.

The Queensland Energy Savings Scheme: Incentives are provided for the upgrade to higher efficiency products and installation of energy-saving equipment, such as switching to LED lighting in residential and commercial properties.

How Much Can You Save by Upgrading to LEDs?

Over the past years, Australians have increasingly moved to more energy-efficient lighting solutions, with LEDs leading the way. Traditional lighting technologies such as incandescent, halogen, and CFL bulbs are paving the way for LEDs, which promise massive savings in energy, cost, and environmental impact. 

But how much do LED lights save?

This article breaks down the numbers to give you a clear view of savings potential for Australian households. 

How Much Energy Do LEDs Save?

To understand the savings potential, let’s  first look at the energy consumption of LED bulbs compared to older lighting technologies: 

• 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. 

Incandescent Bulbs

Daily energy consumption = Wattage x working hours x number of bulbs ÷ 1000

=> 60 x 5 x 10 ÷ 1000

=> 3kWh/ day

Annual Energy Consumption:

Daily consumption x 365 = 3 x 365 

= 1095kWh/year

Halogen Bulbs

Use the same formula but substitute the wattage with that of halogen bulbs. You will get the following 

Halogen bulb Annual Energy Consumption = (43 x 5 x 10 ÷1000) x 365

=> 785.5 kWh/year

CFL Bulbs

 Wattage: 14 watts

CFL Annual Energy Consumption => (14 x 5 x 10 ÷ 1000) x 365

=> 255.5 kWh/year

LED Bulbs

Wattage:  9 watts

LEDs Annual Energy Consumption:

(9 x 5 x 10 ÷ 1000) x 365

= 164 kWh/year

Comparing the Energy savings

Energy savings = Traditional Bulbs Energy Consumption – LED bulb energy consumption 

Therefore;

Switching from Incandescent to LEDs = 1095kWh –164kWh  = 931kWh

Switching from Halogen to LEDs = 785.5kWh –164kWh =621.5kWh

Switching from CFLs to LEDs = 255.5kWh – 164kWh = 91.5kWh

How Much Do You Save on Electricity Bills?

The savings on electricity bills are where the benefits of LEDs become tangible. The savings potential is significant since lighting accounts for approximately 10% of an average Australian household’s electricity usage.

Let’s break it down further.

Assuming the average electricity price in Australia is $0.30 per kWh, below is how the annual cost of electricity for each bulb type would look like:

Annual Electricity Costs = kWh/year x Costs 

Substituting these figures for:

1. Incandescent Bulbs

 Annual Cost = 1,095 x 0.30 = $328.50

2. Halogen Bulbs

Annual Cost = 785.5 x 0.30 = $235.65

3. CFL Bulbs

Annual Cost = 255.5 x 0.30 = $76.65

4. LED Bulbs

Annual Cost = 164 x 0.30 = $49.20

Savings Comparison

Let’s compare the annual savings if you switch to LEDs from each type of bulb:

1. Incandescent to LED

Annual Cost Savings = Annual cost of Incandescent bulbs – Annual cost of LEDs 

= $328.50 – $49.20 = $279.30

2. Halogen to LED

Annual Cost Savings = Annual cost of halogen bulbs – Annual cost of LEDs

Annual Savings = $235.65 –$49.20 = $186.45

3. CFL to LED

Annual Cost Savings vs CFL  = Annual cost of Incandescent bulbs – Annual cost of LEDs

Annual LEDs savings vs CFL   = $76.65 – $49.20 = $27.45

Cost of Bulbs: Upfront Investment vs Long-Term Savings

While the upfront cost of LED bulbs is higher, they last much longer compared to other types and can recoup their initial costs through savings. Let’s find out how they do this.

Cost of Bulbs in Australia vs Lifespan 

1. LED Bulbs

Cost per Bulb: $8

Lifespan:25,000 hours

Number of Replacements for 25,000 Hours:

Total replacement over the LED lifespan = Total hours for LED ÷ LED 

Number of Replacements = 25000/25000

= 1

Total Cost for 25,000 hours = Number of replacing x cost of each LED bulb

Total Cost = 1 x 8 = $8

Installing 10 LED lights= $8×10

= $80

2. Incandescent Bulbs:

 Cost per Bulb: Approximately $1

 Lifespan: 1,000 hours

Number of Replacements over 25,000 Hours of LEDs 

 Number of Replacements = 25,000/1,000 = 25

Total Cost for 25,000 Hours:

Total Cost = 25 x 1 = $25

Total cost for 10 incandescent = $250

3. Halogen Bulbs:

Cost per Bulb: $2

Lifespan: 2,000 hours

Number of Replacements over 25,000 Hours for LEDs 

Number of Replacements = 25,00/2,000 = 12.5 (13 for simplicity)

Total Cost for 25,000 Hours:

Total Cost = 13 x 2 = $26

Total costs for 10 halogens = $260

4. CFL Bulbs:

Cost per Bulb: $3

Lifespan: 8,000 hours

Number of Replacements over 25,000 Hours for LEDs 

Number of Replacements = 25,000/8,000 approx 3.125 ( let’s just say 3)

Total Cost for 25,000 Hours over 

Total Cost = $3 x 3 = $9

Total costs for 10 CFL replacements = $90

Payback Time for LEDs Compared to Each of The Above Bulbs

Payback Period = Initial Costs ÷ Annual Savings 

1. Payback Period For LEDs vs Incandescent 

Payback Period = initial costs for LEDs ÷ Total savings for LEDs vs Incandescent 

80 ÷ 279.3 = 0.29 years  = 3.44 months 

That’s approximately less than 4 months

2. Payback Period For LEDs vs Halogen

Payback Period = initial costs for LEDs ÷ Total savings for LEDs vs Halogen bulbs 

= $80 ÷ $186.45

= 0.43 years = 5.2 months

That’s less than half a year! 

3. Payback Period For LEDs vs CFLs

Payback Period = initial costs for LEDs ÷ Total savings for LEDs vs CFL bulbs

Using the same formula we used above, we get

= $80÷ $27.45

= 2.91 years 

That’s roughly 3 years

Long-Term Savings

Calculating the long-term savings for a typical Australian household with 10 bulbs over 5, 10, and 15 years:

1. Incandescent to LED:

• 5 Years

5-Year Savings= 279.30 x 5 = $1,396.50

•  10 Years

10-Year Savings = 279.30 x10 = $2,793

•    15 Years

 15-Year Savings= 279.30x 15 =$4,189.5    

2. Halogen to LED

•    5 Years

 5-Year Savings = 186.45×5 = $932.25

•    10 Years

 10-Year Savings= 186.45×10 =$1,864.50  

•    15 Years

15-Year Savings= 186.45 x 15 =$2,796.75

3. CFL to LED

•    5 Years

5-Year Savings = 27.45x 5 = $137.25

•    10 Years

 10-Year Savings= 27.45 x 10 = $274.50

•   15 Years

 15-Year Savings = 27.45 x 15 = $411.75

Environmental Savings – Quantifying Carbon Reduction

Switching to LEDs saves energy and money and has a substantial environmental impact by reducing carbon emissions. For each kWh saved, around 0.6256 kg of CO₂ emissions are estimated to be avoided. Let’s break down the carbon savings based on the energy savings calculated earlier: 

• Incandescent to LED

Energy Savings: 931 kWh/year

Carbon Savings: 931 kWh/year × 0.6256 kg CO₂/kWh = 582.4 kg CO₂/year

• Halogen to LED

Energy Savings: 621.5 kWh/year

Carbon Savings: 621.5 kWh/year × 0.6256 kg CO₂/kWh = 388.7 kg CO₂/year

• CFL to LED

Energy Savings: 91.5 kWh/year

Carbon Savings:  91.5 kWh/year × 0.6256 kg CO₂/kWh = 57.2 kg CO₂/year

These reductions in carbon emissions add up over time, contributing significantly to lowering household carbon footprints and combating climate change.

Wrap Up

Upgrading to LED lighting presents substantial financial, energy, and environmental benefits for Australian households. As shown here, LEDs significantly reduce energy consumption compared to incandescent, halogen, and CFL bulbs, leading to immediate savings on electricity bills despite a higher upfront cost.

The payback period for switching to LEDs is short, especially when replacing incandescent and halogen bulbs. Over time, households can save thousands of dollars and reduce their carbon footprint by hundreds of kilograms of CO2 emissions annually.

By adopting LEDs, Australians can make a smart, sustainable choice that benefits their wallets and the planet.

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