Family Finance Help

You’re probably expecting the usual fluffy “how to” article – the sort that opens with a few insipid generalisations before meandering into a less than thunderously convincing argument vaguely related to the title. If so, prepare to be disappointed/pleasantly surprised (delete as appropriate); I have neither the time nor inclination and frankly the data speaks for itself. So let’s pitch in and start doing some math.

A typical mains powered halogen lamp (as commonly found recessed into ceilings) consumes 50 watts, can be purchased for about 2, lasts up to 2,000 hours, and will cost 12 to run for those 2,000 hours. The running cost is worked out using the standard rate of 0.12 per kWh and assumes modest average use of 3 hours per day which equates to roughly 1,000 hours per year.

An equivalent GU10 format LED (in other words a quality LED such as Sharp’s Zenigata that is functionally almost identical) requires just 4W and will run for 40,000 hours or more; the purchase price is at the moment 24 but over 2,000 hours it costs just 0.96 in electricity to run.

Looks like the LED has priced itself out due to the much higher purchase cost, doesn’t it? But let’s add a bit more “real world” perspective into this picture.

To begin with, to compete against the lifespan of a single LED requires replacing the halogen 20 times, which brings the true purchase price up to 40 (20 x 2) which is nearly double the LED’s 24 price tag.

Additionally, if instead of comparing the two over the rather unimpressive lifespan of the halogen we use that of the LED (40,000 hours) then the LED costs 19.20 to run whereas the halogen lamp is a whopping 240.

Lastly, let’s also account for that “real” difference in purchase price; so over 40,000 hours a single halogen (plus its 19 replacements) will run up a bill of 280 but swapping it for an LED will instead incur a total of 43.20. Forget looking for 10% savings here or 25% there, we’re staring at the reality that halogen lamps are over 1000% (yes, one thousand percent) more expensive to own and run than equivalent LEDs.

Even with the initial investment figures added back in, halogen lighting is easily 700% more expensive. Interestingly also, in this example the LED actually costs less to run than to buy. The halogen lamp is superficially cheap to buy (but as we saw ends up costing nearly twice as much as the LED due to constant replacement costs) yet hugely expensive to run. It’s a totally different ball game.

Of course, this example is deliberately small-scale and designed to illustrate the differences at the level of a single, modestly used light bulb. In passing from my kitchen (which faces North and has poor daylight) I counted 10 halogen down lights that get switched on at 07:00 and off again at 24:00; in the hall were 4 more; and back in my office I can see 6 that must average 6 hours each evening.

Adding up the total for just these 3 rooms produces an alarming annual figure of 100,000 hours in total. That’s worked out as: 10 * 17 hours plus 4 * 17 hours plus 6 * 6 hours all times 365 days. In financial terms it comes out as: 100,000 hours * 50 watts * 0.12 all divided by 1000 (we want kilowatt hours) which is 600. Or at least it does for halogen lamps; the LEDs come in at a more modest 48 per year.

Let’s examine some slightly more real world examples where artificial light operates almost constantly (hospitals, hotels, shops, offices, airports etc). Stir in some currency symbols and presto, simple mathematics is transformed into economics and all of a sudden we’re talking really big bucks.

We have shown that it actually costs considerably less to purchase one “high priced” LED than to replace a “cheap” halogen lamp 20 times over to match the LEDs lifespan. We have also shown that the total cost of ownership for halogen lamps is 12 times that of their LED counterparts. So one has to ask: why would anyone NOT make the switch to LED?