Calculating the Return on Investment of an LED

Determining the return on investment of an LED light can be hard to calculate but useful if you are considering making the switch from conventional lighting methods to LED lights.

return on investment of an LED

The upfront cost of LED lights can be a deterrent for many people when they are considering making the switch from conventional lighting options like incandescent, fluorescent or CFLs to LED lights. But homes and businesses can save huge amounts of money on their electrical bills by switching to LED lights. An LED bulb typically uses 80 to 90 percent less energy than other lighting options. Plus, that LED bulb will last four to five times longer than other lighting options, putting, even more, money back in consumer’s pockets.

Return on investment for an LED light – things to consider

Of course, when you are calculating what your return on investment for an LED light, there are multiple factors you’ll need to take into consideration. Below are some of the main things to consider.

Existing bulb usage

You will need to consider the wattage, unit cost and bulb life of the bulbs you are currently using, the number of those types of bulbs that you have in your home or business and the amount that you use them. All of those amounts factor into the usage costs of your existing bulbs.

Energy costs

The amount that you currently pay for your energy isn’t something that you will be able to easily change and will remain constant regardless of what light bulbs you are using. However, you should be able to reduce the amount of energy you consume by factoring in the amount you are paying per kilowatt hour.

Another consideration, especially for a business, is the cost of labor that will be involved in installing and replacing existing bulbs with LED lights, including the labor rate, estimated time to replace bulbs and the number of workers it will take.

Initial LED cost

LED lights used to be significantly more expensive than their more conventional counterparts, but as technology has improved the cost of an LED bulbs has dropped. Today, you can buy a standard LED bulb for about 5 dollars. Of course, there are more expensive options depending on the type of fixture you have and if you’d like you bulb to have any special features, like dimming options or smartphone connectivity. You will also want to factor in the LED bulbs wattage and the estimated lifespan of the bulb.

Return on investment of an LED

By taking all those factors into consideration, you should be able to get an idea about the amount that switching to LED lights will be able to save you over their lifespan. If doing that math is a bit intimidating, you can use this calculator to get an estimate for what your return on investment of an LED could be.

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