Knowledge Base

How Much Do LED Lights Save Per Year?

You have probably heard before that LED lights are more cost-efficient than any other type of light. Is this really true or is it only an urban myth?

You’ll be glad to know that LED manufacturers have not been lying to you – LED lights are quantifiably more affordable than halogen, CFL, incandescent and fluorescent lights.

The Difference in Purchasing Price

LED Light Bulb Saving

The first thing that buyers look at when buying a new light bulb is the price of a single bulb. The initial purchasing price of an LED light bulb tends to be higher than an incandescent, CFL or halogen light for the same purpose.

If this is the only cost that you want to look at, then yes, an LED costs more than other light types. However, only looking at the purchasing price ignores the actual cost of using the light.

When you factor in the longer lifespan and energy-efficiency of LEDs, then the overall cost of an LED is lower compared to other lighting technologies.

So How Much Do LED Lights Save Per Year?

A typical LED light bulb will save you between $3-$5 per year compared to an incandescent bulb. Whilst this may not sound like a considerable amount, when you multiply this over the 20-40 lights bulbs typically found in an American home, you can potentially save $100 per year on your electricity.

Of course, for a business where there may be 100’s, if not 1000’s of bulbs on the premises, the cost saving can be HUGE.

So back to the math. How did we come to this cost saving? To make a fair comparison between LED lights and incandescent, CFL, fluorescent and halogen lights, take a look at the purchasing price and the lifespan of each.

LED Light Box Packaging Truths

This is how you calculate what it costs to use an LED light versus a comparable different kind of light bulb.

There are three important numbers you need to note down to make the calculations. The first one being the kilowatts per hour or kWh which you can easily read off the product information.

The second figure that you need to know is how many hours the light is used per year. Commonly, this number is calculated as 3 hours per day for 365 days or 1095 hours per year.

The final figure you need to know is how much electricity costs. For the example below, we’ve taken the average cost of $0,12 / kWh (source: NPR) for electricity in the United States.

  1. Find the wattage of the light. Divide this number by 1000 to get the kWh.
  2. Multiply the kWh by the number of hours used per year.
  3. Multiply the figure of step 2 by the cost of electricity.
  4. This final number is an average cost of using the light over a one year time period, excluding the purchasing price.

Here is a comparison table of running costs for Amazon’s top reviewed LED household light bulb and incandescent household light bulb.

LED Household Bulb $3,62 (8-pack for $28,99) 15,000 13 $1.71 $4,43
Incandescent Household Bulb $1,87 (24-pack for $44,99) 5000 60 $7.89

As you can see, despite the LED light bulbs costing more per piece, the overall cost is cheaper than the incandescent light bulb.

The next time your lights need replacing, make this quick calculation before you make your choice to come out cheaper in the long run.

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Kazi Ehsan March 18, 2019 at 12:55 pm

Very interesting insight. Is this a common saving for all LED lights or only renowned brands are good at saving energy?

David Willis March 18, 2019 at 3:57 pm

Hi Kazi,

LED technology is pretty good regardless of brand or quality, the money LED lights save is likely quite equal across the board.


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