If you could get a 30% annual return on investment for the next 20 years and get all your money back in about three years, starting tomorrow, would you do it? Of course you would! But how?
The answer: ditch all of the light bulbs in your house and replace them with LED bulbs. While LED bulbs have a larger up-front cost they only consume about 10% as much energy as incandescent light bulbs (and about half as much as compact fluorescent bulbs). The savings on electricity costs every month will thus pay for the additional cost in a few years’ time. They also last far longer; about six times longer than compact fluorescent bulbs and over forty times longer than old-fashioned incandescent bulbs. As icing on the cake the lower energy usage will benefit the environment. If all of my readers did this and they encouraged their friends and families and so on, then the LED change over can start to make a real difference.
This is what I did. I changed about forty bulbs thus far, for a cost of about $350, or $8.75/bulb. For the sake of argument let’s assume the old bulbs were all incandescent. If the old bulbs averaged one hour of use per day at 75 watts that equates to about 2.25 kilowatt hours per month per bulb, or 90 Kilowatt hours for all 40 bulbs for the month. Switch over to LED and that consumption drops to 10% of that total, or 9 kilowatt hours. That’s a difference of 81 kWh per month, or 972 kWh per year. Assuming 11.69 cents per kilowatt hour (November 2015 estimate for Florida), my net saving equates to $114 per year. As such the energy savings alone will have paid for the cost of the bulbs in about three years’ time and will give you a 30% annual return on investment. And that’s not even taking into account that LED bulbs last much, much longer than other bulb types, meaning they will have to be replaced less frequently, saving you costs there as well.
OK, great! But shouldn’t I wait until my old light bulbs burn out? Absolutely not! You don’t start reaping the benefits until you start. Your old bulbs are ‘sunk costs’ that can never be recouped and just cost you more money every day.
LED technology has advanced tremendously in the last year or two. Not only can you find just about every oddball bulb type with a little research on Amazon, but now the light bulbs come in several light spectrums so you can avoid the glowing white light of the old LEDs.
The same change can be made in office buildings, shopping centers, industrial buildings, apartment complexes, etc. For landlords of commercial properties, lower energy bills will also prove to be well worth the investment. If you pass on your opportunity costs to your tenants you end up making your operating expenses more affordable and thus make your property more competitive.
Despite the obvious economic benefits, (albeit we’re not talking big numbers here) maybe you will benefit knowing you took an actionable step to help the environment!
DISCLAIMER: I do not own any stock in light bulb companies!
Sources:
http://www.designrecycleinc.com/led%20comp%20chart.html
https://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_6_a
