The other day the light bulb on my porch finally gave up the ghost, so I ran down to my favorite hardware store to pick up a new one. When I got there I was presented with a choice that many people struggle with: Is it better to stick with the regular old incandescent bulb or spend significantly more money for the energy efficient compact fluorescent light (CFL) instead?
In 2009, 13-Watt CFLs were running in the neighborhood of $7.50 apiece; but over time the price tag has dropped by half. As such, I can buy the same CFLs today for just $3.75 each. Even so, that’s still three times more expensive than the inefficient 60-Watt incandescent equivalents being offered at $1.25 — so it’s not too hard to see why some people are still loathe to make the conversion to CFLs.
The big question, of course, is just how quickly it takes the energy savings provided by the CFL to cover the product’s purchase price.
How to Determine the Payback Period of Energy Efficient Bulbs
In order to figure out if the CFL was really worth the extra money, I first had to calculate the simple payback period, which in this case is defined as:
Simple Payback = (CFL Cost) / (Annual Electricity Savings)
By calculating simple payback you can easily determine how long it will take to show a return on your investment in the more expensive CFLs.
Although it’s true that simple payback does not take into account inflation rates, compounded savings, or replacement costs, it’s a very useful tool nevertheless and more than adequate for this particular purpose.
Looking at the simple payback equation, all one needs to know is the cost of the CFL and the annual electricity savings. I found the former by simply looking at the price tag, but to get the latter I had to know two things: 1) how many hours per day the light was in use; and 2) the number of watts saved by going from an incandescent bulb to a CFL.
For the first point, I conservatively assumed my porch light was on two hours per day — but in reality it’s less than that. To determine the second point, I simply looked at the labeled wattage ratings of the two bulbs; in my case, the incandescent bulb was rated at 60 Watts while the CFL’s rating was listed at a miserly 13 Watts, for a total power savings of 47 Watts.
Calculating Your Annual Energy Savings
With that information in hand, I could then calculate my annual energy savings using this formula:
Annual Electricity Savings = ((Daily Hours Used x 365 days/year) x (Watts Saved))/1000 x (Cost of Electricity)
In my case, the numbers looked like this:
Annual Electricity Savings = ((2 hrs x 365 days/yr) x (47 Watts))/1000 x ($0.15/kWh)
… for an annual savings of $5.15.
Calculating the Payback Period
With our annual energy savings figured out, we can now calculate the payback. If the energy efficient product costs $3.75, and the annual electricity savings is $5.15 as shown above, the simple payback is:
$3.75/$5.15 = 0.73 years
It’s interesting to note that if you intend on replacing all of the bulbs in your home with CFLs, increasing the number of bulbs being replaced doesn’t decrease the payback period (assuming there are no economies of scale for buying additional bulbs); in my case it would still be 0.73 years — or slightly less than nine months. It will, however, increase your annual energy savings.
Evaluating the Payback Period
As a financial rule of thumb, payback periods of five years or less are often generally worth implementing, while projects with payback periods greater than ten years are generally not cost effective. In my case, the 0.73 year payback period made the decision to go with the CFL an easy one.
Of course, that doesn’t mean I’m going to immediately replace all of my incandescent bulbs with CFLs, but I am transitioning over to CFLs as my incandescent bulbs burn out.
And For the Mathematically Challenged…
By the way, if you don’t feel like taking the time do the calculations yourself, you’re in luck: It turns out there are handy web-based savings calculators you can use to determine the payback periods and annual savings from using CFLs instead of incandescent bulbs too.
It’s okay. I’ll never tell.
***
(This is an updated version of an article originally published on July 20, 2009.)
Photo Credit: Paul Keller
CFLs are absolutely worth it! I’ve been using the same one in my living room for over 6 years and it’s been on every day from 6-14 hrs/day.
Wow! If I did my math correctly, and assuming an average of 10 hrs per day, that’s almost 20,000 hrs of operation! Incredible! 🙂
Shouldn’t the numerator be CFL – incandescent cost since that is the increased investment of purchasing a CFL?
John,
It’s a very very fine distinction, but ‘simple payback’ only considers the amount of time required for the benefits to pay back the cost of a project. For that reason the numerator should not include the subtracted cost of the incandescent bulb. Ticky tack, I know. 🙂
Len
Definitely worth the initial cost of $5 or $6, considering the amount of incandescents I would have used over 6 years. It’s also a 3-way bulb and just recently moved with me from Virginia to Georgia, and still going strong.
That’s awesome, Jennifer. I’m beginning to think I should be including gasoline savings from the reduced number of trips required to buy new incandescent bulbs too… 🙂
In my home the porch light may very well be on all night as I like the place lit up. If not all night – at least 4 -5 hours. We have made the switch in our home and are looking forward to the savings.
Good for you, Sadie! I’m the opposite of you, though. I like the darkness, so my porch light is set on a motion detector. As a result, I’ll bet my new CFL porch light will last for close to a thousand years. 😉
Great article! I know you were not considering it in your calculation, but CFLs also last 8 or more times longer than incandescents bulbs. So if you just figure on replacement cost alone, not electricity savings, (and excluding inflation, etc etc), you will save money over the lifetime of the CFL (1 CFL=$7.50, 8 incandescents bulbs= $10).
Hey, thanks, Emily! 🙂
And you are absolutely correct – and Jennifer’s CFLs are lasting even longer than that!
Len
CFL’s seem to be more resilient to power spikes etc. I haven’t had one blow from a power spike/lightning strike yet, but those event’s did successfully claim the lifes of several incandescent bulbs, nothing but CFL’s in the house now.
For living rooms use the warm whites for things like desklamps were you work by the light try cold whites(especially if you draw/paint)
In the philippines, a brand name 9 watt CFL like GE or phillips should cost around us$ 2.12. A chinese no-name brand maybe half that. Of course the chinese brands tend to die much earlier, maybe 1-2 years in my experience.
@S01: I just replaced two CFLs in two of my bathrooms that were almost 13 years old. They do last a long long time under the right conditions. 🙂
It’s truly great to see a cool blogpost , thx.
Keep in mind for indoor applications you have to consider in winter incandescents will reduce heat required, and in summer, if A/C is used will more then double the energy wasted, 75 watts of heat wasted may mean 150-300 watts of A/C usage to remove that heat
So then I guess for those of you who want to be as green as possible, use CFLs in the summertime and incandescent bulbs in the winter time. 😉
Even in the winter, electric resistance heat (an incandescent bulb) is an expensive way to heat.
I’d rather spend a kilowatt-hour on my heat pump to get 3 kW-hour equivalent (or use the gas furnace if the temperature is below freezing)
I believe that your math may be off somewhat. You use the ENTIRE cost of the CFL. However, we are comparing two different bulbs here…thus, just as you compare the electrical usage difference, you should ALSO use the cost difference in your numerator (the bulbs.) In this case the additional cost (not the entire cost) of the CFL. In your example it would be $7.50 minus $1.25 = $6.25. This would result in an shorter payback period.
Respectfully,
Bill
As I mentioned above to another reader, the numerator does not include the subtracted cost of the incandescent bulb because I calculated the “simple payback,” which only considers the amount of time required for the benefits to pay back the cost of a project.
It is definitely better to get the name brand CFL’s. I’ve used a couple of different off brands, and most of the bulbs lasted only about as long a incandescents! A total waste of money. I now only buy better CFL’s, even if they are a little more expensive than the off brands.
Interesting! It would be great if you would share some of the better and worse CFL brands. Care to share some names with us? 🙂
LED lights do not YET provide the same lighting as other light bulbs. But prices have decreased immensely. Good ones you can already get for $20.
What you always have to consider is that it is not only the electricity normal bulbs consume. They also add immense heat making your hvac work harder!
Just go into your kitchen and place your hand underneath those big light bulbs…
The funny thing is that the United States is not the only country where they have done this mistake.
In Europe there are even laws that force people to buy energy saving lamps from (I think) 2012 on.
Crazy…
I m German. We sometimes have long names 🙂
The laws are crazy.
Do you know anybody with a longer last name than you?
Wow, this article is almost two years old now and still so very current.
I mean nowadays we still have the same question, although LEDs are on the market and getting cheaper and cheaper.
In my opinion the main problem still is that CFLs are so toxic. You cant just throw them away. They have to be recycled. If that makes sense…
I agree about the toxicity of CFLs being a big problem. Personally, I think they have been blindly pushed without any regard for this.
In the end, in exchange for the more expensive CFLs, we are given lower-quality light (that take about a minute to reach their maximum brightness), and the looming problem of mercury disposal after they burn out.
(By the way, I’ve had over 6000 comments here, but no one has ever had a longer surname than you, Gottingen — and I suspect no one ever will… unless one of your relatives stops by, that is! LOL)
The mercury contained in the CFL’s is the main reason I have not switched over. I have broken a light bulb or 2 in my time, and what would be the ramifications if I didn’t get the mercury cleaned up sufficiently? Not worth the chance of my family or pets becoming sick. Light bulbs are such a SMALL portion of my budget that the savings would be null & void in the scheme of things. But that is just my humble opinion.
I agree; they definitely have their issues, Renee. Mercury is one of them, as is their performance.
I cant believe we are going to be forced to use these things. One more example of government intrusion into our lives. What would Thomas Edison think of this?
I think it is worth switching to CLF. It’s not just cost saving in the long run but energy saving too.
The payback doesn’t change based on the number of bulbs, but the random nature of the bulbs burning out sure does. With a 10 month payback, if you install 20 bulbs, over the long term your savings is enough to fund a new bulb every two weeks. So in week 8 when that odd first bulb burns out, you are still ahead, shrug, replace it and move on. Pretty soon the savings has paid for half the bulbs, then all of them, and you’re saving for the LEDs which are still pretty expensive.
.73 year is not bad at all. I got a bunch of CFL bulbs when they first came out. Those older ones are dying and it’s time to replace them. They don’t seem to last as long as advertised, but that’s just my feeling. Some of them takes a few minutes to warm up too.
Another great post!
I replace with CFLs in some areas of the house, but in others I stick with the incandescent as long as they continue to make them. Some of the CFLs have gotten better, but some are just awful in terms of heat up time and the type of light they put out.
As long as we are not forced to buy CFLs then I’m OK with it. They don’t work in applications where you turn a light on just for a few seconds to find something. They don’t get bright enough in that short of time. Some put out weird color light or to harsh of a white light. Have had a few burn out in way less than the 20,000 hours most are rated at. Have broken a few, the clean-up procedure is no fun.
I like the savings they provide in the long run (if it doesn’t burn out prematurely and if it doesn’t get broken on accident).
Some us save money by taking the bus or driving easy. Some save buy buying CFLs. This is America and it’s nice to have choices. Let people use what ever bulb suits them.
cfl’s contain MERCURY. Are you guys nuts???????????????? You break one of those babies in your house – good luck! And how many people do you think really properly dispose of them? Pony up a few more cents and be safe.
C’mon Len, you are such a dinosaur.
I switched to CFL years ago and they paid for themselves in the first couple of years. Not only do they use 1/4th of the power, they don’t burn out every 2 years. My electric bill went down about $20 per month.
I have recently purchased my first LED bulb and I love it. Not only is it non-toxic, it will last 22 years. They are still pretty steep at $12 each, but the prices are already dropping quickly. I plan to replace the CFLs as they burn out, but they rarely burn out. It will take a while.
I thought of a few more things. CFLs are more complex and require a hazardous chemical, mercury. It exposes the workers all they way down the line, the transporters, the sellers, then the consumer, and then those who dispose of them. They have more parts and take more energy to manufacture. They are heavier per watt than incandescent so take more green house gasses to transport. So some of that “green” savings is sucked up there. Some people leave them on since it takes a while for them to warm up, when normally they would turn off an incandescent. We have one in the garage like that. Takes quite a while to get going when it’s 50 or below.
Maybe someone else can find the faults with incandescent bulbs and list them as I did for CFLs to compare.
This was very helpful, Len. Thank you so much!
My pleasure, Van.
Wow, this is exactly what I was looking for! Thanks.