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December 13, 2010

LED Light Bulbs to Replace CFL or Standard? Not There Yet.

Category: Economics,Household,Save Electricity – Tom Harrison – 5:59 am

LED Lighting, Not Quite Ready for Prime Time

Surprisingly Close To Incandescent

I have written about LED lighting before, saying “Not there yet” — my most recent checkup was about 18 months ago.

There’s some progress, but we’re still not quite there. Home Depot is selling a Philips LED light bulb: same brightness as a 60W incandescent bulb (in other words, dim), same shape as standard A19 bulb, same color temperature and color rendering index, and dimmable, uses 12W, and lasts for 25,000 hours — Cost: $40.

A comparable CFL, (although not dimmable) costs about $1.50 and uses 13W and lasts 8,000 hours.

A comparable incandescent costs around $1 and uses 60W and lasts about 1,000 hours.

Some math. Compared to incandescent:

  • CFL and LED both use about 1/5th as much electricity
  • LED lasts 25x longer, CFL lasts 8x longer

So let’s think about lifetime cost. There are two parts to this: store price and electricity price. Assuming the current average price of electricity in the US stays about $0.10/kWh we can calculate cost per 1000 hours (kh). 60W is .06kW.

  • Inc: ($1.00/1kh) + (0.060kW * 1000h * $0.10/kWh) == $1.00/kh + $6.00/kh == $7.00/kh
  • LED: ($40./25kh) + (0.012kW * 1000h * $0.10/kWh) == $1.60/kh + $1.20/kh == $2.80/kh
  • CFL: ($1.25/8kh) + (0.013kW * 1000h * $0.10/kWh) == $0.16/kh + $1.30/kh == $1.46/kh

So, this Philips LED would cost less (a lot) than the incandescent it replaces. And the CFL is still big winner on price.

CFL is by far the least expensive and uses a fraction of the electricity.

But let’s get real. CFL ain’t happening. And there are reasons LED won’t, either, even though both are far less expensive than incandescent.

Getting Real

But of course, there’s way more to this. Here’s the way things work in real life.

Real People Don’t Do Math

Unit pricing ($/ounce, or something) works when you’re deciding to buy the small or large tube of toothpaste. But there’s no “dollars per thousand hours” unit pricing for light bulbs. Perhaps there should be.

Real People Don’t Pay $40 for a Light Bulb

People will shell out $1000 for a big-ass TV that will probably last less long than the LED bulb.

But $40 for a light bulb — come on, that’s ridiculous! Let’s say that next year the LED price was $20, it would be close to the CFL.

But $20 for a light bulb — come on, that’s ridiculous!

1000 Hours Is Abstract, 25,000 Hours is Abstracter

Of course my cost calculation assumes that you use all 25,000 hours of your bulb. If you left it on all the time, that’s about 3 years of hours. But lets say you use it four hours a day instead. That’s 18 years.

An MBA/Financial Advisor would also hasten to point out that that $40, invested in a reasonably performing stock should be expected to yield about 8% per year. I think future value is the proper calculation (FV = P * (1 + i)n) — my $40 bulb would have to save me $159 ($40 * (1 + .08)18). So at a savings of $4.80/1000 hours … gold star to the first person who does this math and comments!

Because you know, when people shop, they’re all calculating the time value of money in their heads. Yeah, get real. The $40 they spend on the fancy bulb puts them $39 further away from the big-ass flat screen TV they want.

Real People Don’t Believe Manufacturer Claims

It has become painfully obvious from one of the most popular posts on the blog, my CFL review, that people don’t like CFLs.

People don’t believe that CFLs last. This is because people who tried CFLs bought the cheap ones. It is true: cheap CFLs break; good CFLs do last. I have been using them for more than 5 years, and even some of the cheap ones are still in action. And stores still sell cheap CFLs, next to the good ones.

People perceive that CFLs are dimmer than regular bulbs. This is because the industry started out with 60W equivalent bulbs, and most people use 100W or 75W bulbs. Also CFLs (especially cheap ones) take a 15 seconds or so to come up to full brightness — they are seen as being dim.

People perceive the light quality from CFLs is not as good. This is because the first years of CFLs were mostly “cool white”, and even when they sorted out color temperature retailers described the light helpfully as 2700 Kelvins. Somebody finally figured out “warm white” is a better term. They still haven’t figured out to stop selling the ugly ones.

People believe that CFL lights don’t dim well. On that point, they’re right. (Challenge to any retailer — please send a pair of PAR 30 or PAR 38 dimmable CFL bulbs that my wife will not replace in disgust. I have tried ten or 20 different dimmable CFLs, and they have all been terrible.)

I have talked to scores of people who discount all manufacturer claims. Many people turned off, especially when CFLs were new. The manufacturers and resellers did a terrible job of marketing CFLs — people tried them and they were worse in many ways. People formed impressions, and first impressions are hard to reset. And many of the problems are still around if you buy cheap CFLs today.

Today’s CFL light bulbs are far less expensive, high quality, warm white, and start much faster. But real people don’t believe that.

On many of these measures, LED light bulbs are better: instant on, dimmable, high quality, good light.

But $40 for a light bulb — come on, that’s ridiculous! :-)

Real People Don’t Want To Change

Real people don’t want to change unless they are getting something that is bigger, better, cheaper, cooler or more fun. It is probably a mistake for CFL or LED makers to try to create “comparable” lighting products, or suggest this is what people want. GM has got it right on the messaging for the new Volt: “It’s more car than electric.” — nice.

Real People Don’t Use 60W Bulbs

A 60W bulb is pretty dim. But 60W is as bright as retail LED bulbs get today — you can buy brighter, but they are usually specialty bulbs. I do think LED makers seem to be avoiding some of the traps the CFL makers fell into.

But the brightness thing is an issue. It probably won’t be resolved for another year or two.

We’re Not Really There Yet

Philips seems to be on the right track. But until we get a few more choices, and lower price, this specific LED bulb doesn’t make sense. But then again, most people said that our Prius wouldn’t make sense, either.

18 Comments

  1. Tom. I’m a tech geek. As your post points out, it’s hard to pencil out the economic benefit of these LEDs as they’re currently priced. It’ll probably be 10 years before we see an actual payoff. I’m hoping my “investment” in these bulbs will eventually result in the price of them coming down.

    I bought the bulbs in much the same way some people buy new flatscreen TVs or computers. They’re kind of new “gadgets” to me, with a positive benefit. There are still 10 incandescents around my house that are on dimmers that I eventually want to replace. I think I’m going to do them in stages.

    My wife has essentially come to terms with my irrational affinity to geeky green things, but there is still a minor amount of cajoling that has to happen.

    Comment by Edward — December 23, 2010 @ 3:25 pm

  2. I have a confession, too. I am a geek (that’s not the confession) and used to work for a company that did eCommerce for consumer electronics. As flatscreen TVs came out and were beginning to be affordable, I felt I must have the required knowledge … for the company.

    I bought one (a 26″ one because the big 32″ models were just too much). It cost around $1,300. We still have it in our living room, but could get a better and slightly larger one today for $150.

    I am as bad as anyone else on this score — even though I am a geek, I can’t get used to the idea of spending $40 on something that will be better and cheaper next year. Unless it’s a TV, I guess.

    I’ll vicariously live through your enjoyment of your new LEDs. Others should follow your lead: you’re doing the right thing.

    Comment by Tom Harrison — December 23, 2010 @ 3:50 pm

  3. **UPDATE**
    Well, I furtively replaced three more incandescents with the Philips “geek bulbs.” Wife hasn’t even noticed yet. That’s how natural the light is. I admit the price is steep, but I just look at it as me doing my part to make them cheaper for everyone else a year from now. :-)

    Comment by Edward — December 24, 2010 @ 1:31 am

  4. The most important advantage using LED bulbs is they are recyclable and consume less heat.

    Comment by mr16 led bulbs — February 16, 2011 @ 4:43 am

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