When it comes to lighting, I’m no early adopter. For the last 20 years, I’ve annoyed my energy efficiency friends by arguing that those curlicue compact fluorescent bulbs (CFLs) were overhyped. The light quality is still inferior; they still warm to full brightness too slowly; and the claims of 10-year life are vastly overstated.
And then when they burn out (after a year or two) we are supposed to wrap them in a cloth and drive them to the local hazardous waste disposal site, because they contain mercury. Sure they use less electricity, but they don’t offer the value to get most people to switch.
So I hope I have the cred to convince you that now is the time to trash (almost) all of the incandescent bulbs that are still lighting your house and replace them with light-emitting diode (LED) bulbs. If you are like me, you probably hesitate to throw away a perfectly good working bulb, but you should. Really. Don’t fall victim to the sunk cost fallacy. Both your wallet and the environment will thank you.
A standard LED bulb now costs only about $3, less if you buy in bulk or live in an area where they are subsidized by the local utility. And the LED uses 8.5 watts to produce the same amount of light as a 60-watt incandescent. The Department of Energy generally calculates costs based on assuming a light bulb is used 3 hours per day, but let’s be super conservative and assume it’s only used one hour a day. And let’s assume you pay the average residential retail rate for electricity in the U.S., 12.73 cents per kilowatt-hour. If that’s the case, then in the first year you would save $2.39, 80% of the purchase cost.
That’s in the first year. These bulbs are touted to last for more than 20 years (at which point it is just fine to throw them in the regular trash). The spreadsheet I keep of every light bulb in my house (yes, I really do, which is how I know that my old CFLs lasted 1-2 years on average) shows that none of the LED bulbs I’ve installed, going back to 2009, has yet failed. As long as the LED lasts even a bit over a year, screwing it in today and throwing away the working incandescent bulb will still save you money. (If you want to do your own calculation with different assumptions, here is a spreadsheet to figure out the savings and payback period.)
And the numbers will be better than that if you have the light bulb on more than one hour per day. But if you know you use a particular bulb very infrequently — the one in the cellar that you only turn on for a few minutes every week or two — you might skip that one and focus on the bulbs that get regular use. In fact, you could save all the incandescents that you removed from the other fixtures in your house to replace that one in the cellar every few years for the next century or two. (Though you may have a better use for storage space than that.)
On the other hand, if you live in a high cost area such as California, where the electricity you save could very well cost 30 cents per kilowatt-hour or more, you either throw away nearly all the incandescent bulbs today or you are throwing away real money every day.
But you aren’t just saving money with LEDs, you’re also saving energy and the planet. Sure, some energy does go into making an LED, but that is a small fraction of the $3 cost. Compare that to the $2.39 (or more) savings each year, which is all energy. The math for saving energy is even more compelling than it is for saving money.
So if this is such a no-brainer, why are you still reading this article instead of replacing your incandescent bulbs?
“LED bulbs have gotten less expensive, but a year from now they will be even cheaper, so by delaying I will save even more money.” LEDs are indeed going to get cheaper, but not fast enough to justify waiting. You will save so much in the first year after you replace an incandescent that unless LEDs are going to be virtually free a year from now (they aren’t), you’d still be better off doing it today rather than waiting.
“I really like the light quality from the traditional incandescent bulbs. I don’t like LEDs as much.” With the old CFLs, the difference was so obvious that even your hipster nephew who always wears sunglasses could tell the difference. Distinguishing LED from incandescent lighting is much more difficult, and the difference is much less likely to bother you. Still, if you are a photophile (the lighting equivalent of the audiophile who can’t stand listening to an MP3 file because it has less complexity than the larger digital file on a CD) then ignore everything I’ve said. You should get out there and scoop up all the incandescent bulbs the rest of us will be throwing away.
“My parents taught me `waste not, want not’. I just can’t throw away a working lightbulb.” OK, if it will make you feel better, put them all in a box and store them away until you meet the photophile from the previous paragraph. But seriously, that view misses the big point: by not wasting the visible and tangible incandescent bulb, you are instead wasting electricity, which may be invisible, but still uses more of the world’s scarce resources than the bulb.
“It’s a hassle to replace a lightbulb. I know it costs more money, but I’m putting it off until it burns out and I have to replace it.” Fair enough. But waiting a year until it burns out is going to cost you a few dollars in additional electricity while saving you just the interest you earn over a year by delaying the purchase of the LED bulb, which at today’s interest rates is practically nothing. Replacing all of the incandescents in your house is likely to save you $50 per year or more. Of course, nearly all of us procrastinate on some task that would save us that kind of money. Still, next time you have the ladder out to replace one bulb take the opportunity to do them all. And then you won’t have to do it again for many years.
While you are at it, should you also throw away all those curlicue CFLs? Not unless the light is really bugging you. They save almost as much money as an LED, until they burn out that is (and you have to deal with disposing of them). Just don’t buy any more. Actually, that’s not really a concern: LEDs have taken over the market so completely that many stores no longer sell CFLs.
Decades after CFLs were supposed to displace the incandescent bulb, LEDs have finally done it!
I’m still tweeting interesting energy news articles, research, and stats @BorensteinS
 Yes, I am implicitly assuming that you and the LED bulb manufacturer pay the same price for electricity. That’s not right — industrial customers pay about 45% less on average — but energy is such a small part of the cost of manufacturing LED bulbs that even doubling it won’t come close to matching the energy savings in your home.
Severin Borenstein is E.T. Grether Professor of Business Administration and Public Policy at the Haas School of Business. He has published extensively on the oil and gasoline industries, electricity markets and pricing greenhouse gases. His current research projects include the economics of renewable energy, economic policies for reducing greenhouse gases, and alternative models of retail electricity pricing. In 2012-13, he served on the Emissions Market Assessment Committee that advised the California Air Resources Board on the operation of California’s Cap and Trade market for greenhouse gases. Currently, he chairs the California Energy Commission's Petroleum Market Advisory Committee and is a member of the Bay Area Air Quality Management District's Advisory Council.