Note: I wrote this article originally nearly three years ago. Since then, prices have changed drastically on LED bulbs so I’ve applied updates to the article in blue text. 

Yesterday, I finally bit the bullet and purchased my first set of LED Bulbs. In the past, I’ve been reluctant to make the switch because the bulbs are extremely expensive slightly more expensive when compared to traditional incandescent bulbs and I had always heard they weren’t as bright.

As part of the Energy Independence and Security Act of 2007, traditional incandescent light bulbs of 75-Watt and 100-watt were effectively phased out around the beginning of 2013. Beginning in 2014, that phase-out will include 40-watt and 60-watt bulbs. While you may still be able to purchase incandescent bulbs between 40 and 100 watts for some time, manufacturers are no longer producing them.

For most people, this will mean a gradual shift to compact fluorescent (CFL) bulbs, because they’re reasonably-priced and different shapes and sizes are made for different applications.

Forgotten in all of this are Led Bulbs. The main reason is because of the up-front cost. A typical 10-watt LED bulb (approximately the brightness of a 60-watt incandescent) currently costs about $4.50. When you were accustomed to paying 50 cents for a bulb, this can seem like sticker shock.

In reality, though, LED bulbs are the cheapest bulbs you can buy when you consider the energy savings – they’re even a little cheaper than CFL bulbs!

Depreciation Cost

The up-front cost of LEDs is scary, but when you consider that a typical LED lasts 20,000 hours whereas a typical incandescent (high quality) only lasts about 5,000 hours, and a typical CFL bulb lasts 8,000 hours, you can put the up-front cost in perspective by expressing it in terms of depreciation, which is essentially the up-front cost divided by the length of the bulb’s life. Consider the following table:

The easiest way to describe what this table is saying is this: since each bulb has a different expected lifespan, you have to find a way to put the cost into perspective. Since the LED bulb lasts about 18 years, that actually makes your $4.50 initial investment equal about 25 cents per year. This is still more expensive than the 11 cents for an incandescent bulb and even the 14 cents for a CFL, but it definitely seems less daunting. Besides, this is only part of the equation. Now, let’s consider the cost of the electricity to light these bulbs up.

Cost of Electricity

The simple math is pretty easy. The amount of lumens (think: brightness) produced by a 75-watt incandescent bulb can be achieved with 15 watts in an LED bulb and 20 watts in a CFL. It’s obvious here that LEDs and CFLs use less energy, but what does that amount to in a year, given a typical 12-cents per kilowatt-hour cost? Take a look at the following table:

Now we’re talking! Almost $10 annually to run a single 75-watt incandescent bulb versus about $1.32 for an LED bulb and about $1.68 for a CFL. Now we’re starting to see where the cost-savings are coming from.

So, What’s the Bottom Line?

Now, all we’ve got to do is add up the annual cost for depreciation and the annual cost of electricity to compare the true cost of each bulb.

Simply put: Over the long haul, the LED bulb and the CFL bulb have a pretty similar annual cost, and both are significantly cheaper than incandescent bulbs.

If they’re so similar in true annual cost, why spend the extra for LED bulbs?

This is the bigger question that most people ask. If the annual cost is about the same, then why would I spend $4.50 on a single LED bulb versus $1 on a CFL? There are a few other factors everyone should consider, and I’ll simply list them here:

• LED bulbs reach maximum brightness instantly, versus about 60 seconds for a CFL bulb. This leads to a much more simple (and satisfying) transition from incandescent bulbs. This is the major thing that turns most people off from CFL bulbs. 
• LED bulbs are dimmable, whereas you have to purchase special CFL bulbs (and pay more) if you want them to be dimmable. I have dimmers on almost all the lights in my house. Not only are they good for ambiance, but they help save on electricity.
• LED bulbs can be used outdoors in cold temperatures, which is untrue of most CFL bulbs (although again, you can pay more to purchase special outdoor CFLs).
• LED bulbs do not contain mercury, unlike CFL bulbs.
• LED bulbs generate very little heat, whereas CFL bulbs (especially the base) will usually become too hot to touch.

Overall, LED bulbs provide the best and most seamless transition away from incandescent bulbs. Transitioning to CFL bulbs can be frustrating, because they behave differently from incandescents, whereas the learning curve to using LED bulbs is relatively nonexistent.

Next time you’ve got a burned-out bulb in your socket, consider shopping around for an LED bulb for replacement. The cost is much easier to handle if you make your replacements one at a time. Once you’ve replaced 10 bulbs in your house, you’re saving about $90 annually on your electric bill – definitely nothing to turn your nose up at!