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How Can You Save By Upgrading to LEDs? 

How Can You Save By Upgrading to LEDs? 

Last updated on January 28, 2025

Did you know the average Aussie household could slash their lighting bills by up to 80% by switching to LEDs?

With electricity prices soaring across states like NSW and Victoria, a typical family spending $300 annually on lighting could save up to $240 per year simply by replacing old halogen downlights with LEDs.

That’s enough for a family dinner out or a month’s worth of petrol! Plus, with most Australians having around 37 light fixtures per home, the environmental impact is significant – each LED bulb can prevent about 200kg of carbon emissions over its lifetime compared to traditional bulbs.

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 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 incandescent 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?

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.

Based on the chart, let me break down the cost savings comparison between a 6.5W LED bulb and a 60W incandescent bulb over time:

chart showing cost comparison between LED and incandescent

The graph shows the total cost over a period of 1000 days, comparing two types of light bulbs:

  • A 6.5W LED bulb (shown by the green line)
  • A 60W incandescent bulb (shown by the red line)

Key insights from the data:

Initial Investment vs Long-term Savings:

  • The LED bulb appears to have a higher initial cost (around £4-5)
  • The incandescent bulb starts with a lower initial cost (around £1-2)
  • However, the operating costs for the incandescent bulb increase much more rapidly

Payback Period:

  • The blue dotted line marks the payback period at 49 days
  • This is the point where the total cost of both bulbs intersects
  • After this point, the LED starts generating net savings

Long-term Cost Difference:

  • By 1000 days, the incandescent bulb costs approximately £75
  • In contrast, the LED bulb costs only about £12-13
  • This represents a significant saving of around £62-63 over this period

Cost Trajectory:

  • The LED’s cost line (green) shows a very gradual increase, indicating low operating costs.
  • The incandescent’s cost line (red) shows a much steeper increase, indicating higher ongoing electricity consumption and costs

This visualization effectively demonstrates how the higher initial investment in LED technology quickly recovers and leads to substantial long-term savings.

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.

Frequently Asked Questions: LED Upgrade Savings

How much money can I save by switching to LED lights in my home?

In a typical Australian home, replacing 10 traditional 60W incandescent bulbs with equivalent 8W LED bulbs can save approximately $200-250 per year on electricity bills, based on average usage of 6 hours per day and electricity rates of 30 cents per kWh.

The exact savings depend on your current electricity tariff and usage patterns.

What’s the payback period for LED upgrades in Australia?

Most LED upgrades pay for themselves within 6-18 months.

While a quality LED bulb might cost $8-15 compared to $2-3 for an incandescent bulb, the energy savings quickly offset the initial investment. Additionally, many states offer rebates through energy efficiency schemes that can reduce upfront costs.

How much can businesses save by upgrading to LED lighting?

Australian businesses can typically reduce their lighting electricity costs by 60-80% through LED upgrades.

For a medium-sized office of 500m², switching from fluorescent tubes to LEDs can save $1,500-2,000 annually in electricity costs while also reducing maintenance expenses due to longer bulb life.

Are LEDs eligible for energy efficiency incentives in Australia?

Yes, LED upgrades are eligible for various state-based incentives.

For example, the Victorian Energy Upgrades program offers discounts on LED installations, while NSW’s Energy Savings Scheme provides financial incentives for businesses upgrading to energy-efficient lighting.

These schemes can significantly reduce the upfront cost of LED upgrades.

How do LED maintenance costs compare to traditional lighting?

LEDs typically last 15,000-50,000 hours compared to 1,000-2,000 hours for incandescent bulbs. For a business operating 10 hours daily, this means replacing traditional bulbs every 6-12 months versus every 4-13 years for LEDs.

This translates to annual maintenance savings of $20-30 per fixture when accounting for material and labour costs.

What are the hidden cost benefits of switching to LEDs?

Beyond direct energy savings, LEDs offer additional financial benefits, including:
✓ Reduced air conditioning costs as LEDs generate less heat
✓ Lower maintenance costs due to fewer replacements needed
✓ Potential insurance premium reductions due to improved safety
✓ Increased property value through modern, efficient lighting
✓ Productivity gains from better-quality lighting

How much can solar-powered households save with LEDs?

For homes with solar panels, LED upgrades are particularly beneficial. By reducing lighting power consumption by up to 85%, households can direct more solar energy to other uses or increase their feed-in tariff earnings.

A typical 5kW solar system home can save an additional $100-150 annually by switching to LEDs and selling more power back to the grid.

What’s the impact of LED upgrades on businesses’ peak demand charges?

Commercial customers paying demand charges can significantly reduce these costs with LED upgrades. LEDs typically reduce lighting-related peak demand by 60-80%.

For a medium-sized retail store, this can translate to savings of $500-1,000 annually on demand charges alone, separate from energy consumption savings.

How do LED savings compare in different Australian climate zones?

LED savings are generally higher in warmer regions like Queensland and the Northern Territory due to reduced heat output and air conditioning loads.

A Brisbane household might save 10-15% more than a comparable Melbourne home due to additional cooling cost reductions. Conversely, the heating benefit from inefficient bulbs in colder regions is usually outweighed by higher electricity costs.

What are the warranty implications for LED cost savings?

Quality LED products in Australia typically come with 3-5-year warranties, compared to no warranty for traditional bulbs.

This warranty coverage can provide additional savings of $5-10 per bulb over the warranty period by protecting against early failure costs. When selecting LEDs, look for products with longer warranties as they generally indicate better quality and longer effective life.

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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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