How Long Before an LED Light Bulb Pays for Itself?

By Elizabeth Sheer, Cheapism.com

As of January 1, 2014, standard 40- and 60-watt incandescent bulbs began their slow fade into obsolescence for both manufacture and sale. In their stead, consumers are turning to LED bulbs, a relatively recent entry into the realm of indoor lighting. LED bulb prices dipped into $10 territory this year, and we found some that are even cheaper.

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That's still a lot of dough for a light source. But LED bulbs last up to 25 times longer than traditional bulbs. And they are light years ahead of the CFL bulbs that constituted the first wave of replacement lighting. LEDs light up instantly, stay cool, work in low temperatures, and don't contain mercury, which requires responsible disposal. We researched five brands to see how long it would take for the cost of an LED bulb to break even with that of an old-school incandescent. Based on manufacturers' data for yearly operating costs, plus the upfront cost of the bulb, the cheap LEDs on our list break even with an incandescent within 18 months.

Let's start by assuming that a kilowatt hour costs 11 cents and the bulb (incandescent or LED) will stay on three hours a day for a full year. The estimated yearly energy cost of a traditional light bulb is $7.23 compared with average $1.25 for an LED bulb. (Your actual cost might be greater or lower, depending on local electric rates). Traditional bulbs go for about $1 apiece and have an average lifespan of about 1.5 years and then suddenly give out; an average LED bulb costs $10 and nearly all boast an expected working life of 25,000 hours, or 22.8 years, after which they begin to dim. During the first year, the average cost (price of the bulb plus energy costs) of an incandescent bulb is $8.23 and the five-year cost (figuring three bulbs) comes to $39.15. The first- and five-year costs for an LED bulb are $11.25 and $16.25, respectively (remember, no replacements necessary). The five-year total for using an LED bulb is less than half that of an incandescent bulb.

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We ran a similar set of calculations for five brands of LED bulbs that are equivalent to 60-watt incandescents. Each emits a warm, soft white light that is a close imitation of the old-time standby's slightly yellowish cast.

Cree is a line of LED bulbs available exclusively at Home Depot. It wins over consumers with its quality and familiarity (the size and shape are similar to an incandescent). A six-pack of soft white 9.5-watt dimmable bulbs goes for $56.82, or $9.47 per bulb. The annual operating cost of a Cree LED bulb is $1.14, and it begins to undercut the incandescent bulb at 17 months. Cree bulbs boast an Energy Star, which may make them eligible for a rebate from the utility company, and they come with a 10-year warranty.

The TCP 10-watt LED bulb also looks a lot like a regular light bulb. At $23.99 for a three-pack ($8 per bulb), this is the cheapest LED bulb we checked out. It is not dimmable but is Energy Star rated, and comes with a three-year warranty. The expected annual running cost is $1.20. After 14 months, the TCP bulb would become a cheaper light source than an incandescent.

The Philips Slim Style 60-watt equivalent assumes a very unusual shape -- flat -- which might make it suitable for wall fixtures. At 10.5 watts, this LED bulb uses slightly more energy than the others and costs $8.79 per bulb. It's dimmable and omni-directional (i.e., the light diffuses in all directions, which is what you want if the bulb is destined for a table lamp), and comes with a three-year warranty. The expected average energy cost is $1.26 per year and after 16 months, it keeps getting cheaper and cheaper than a traditional bulb.

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The 60-watt LED equivalent from Sylvania also uses 10 watts of energy and costs $9.99 apiece. While it looks similar to a standard light bulb, it is only semi-directional, with most of the light emitted in one direction; it's a good choice for can lights. The expected yearly operating cost is $1.20, pushing it into the cheaper-than-incandescent zone after 18 months.

Another LED Energy Star choice, the 9.5-watt Sunsun, fetches $9.88 per bulb. This one is dimmable, omni-directional, and backed by a three-year warranty. It should not be used in fully enclosed fixtures, but can tolerate damp environments and works well outdoors. The expected average annual running cost is $1.15. This one, too, hits the breakeven point with an incandescent in 18 months.

(Note: A dimmable bulb may require a new LED-compatible dimmer.)

Breakeven Point: LED vs Incandescent Light Bulbs

* All figures rounded to nearest penny; calculations for breakeven point added monthly operating cost to Year 1 estimated cost
** Yearly operating cost supplied by manufacturer

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