Quote:
Originally Posted by IndySam
People who have been around a while understand that when you are told a time to payback by somebody trying to sell something then you should increase that 50% to 400% in the real world.
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Or you can run the calculations yourself and figure it out.
Let's say you have an incandescent light bulb that just died, and you're considering replacing it with LED light bulb. Not replacing the light bulb is not an option. Any potential savings in cost from an LED bulb will be placed into an investment/401k/IRA/etc portfolio, where an average rate of return of 8% (over the life of the investment, obviously not during these past few years) is not uncommon.
The first step is to calculate the initial cost. The cost of a "long life" (20,000 hours life) 60W incandescent bulb is about $2, and the market price of an 7W LED bulb (40,000 hours life) is $25. Let's say a twin-pack of incandescent bulbs was purchased at the same time, so the net initial cost of an LED bulb over two incandescent bulbs required to meet the same lifespan is $21.
The second step is to calculate the annual cost. In Connecticut, electricity currently costs about $0.20/kWh for residential customers! (That's what happens when you let
NIMBYs block any new generating plants or transmission lines). Let's say the light bulb that died was on for eight hours a day, every day, which results in an on time of 2992 hours per year.
The 60W incandescent bulb will use 179.52 kWh of electricity, while the 7W LED bulb will use 20.944 kWh. Using the price of electricity above, the incandescent bulb will cost $35.91/year while the LED will cost $4.19. Switching to LED will yield an annual savings of $31.72 in CT. Redoing these calculations with the US national average of $0.1153/kWh results in an annual savings of $18.28.
The last part is to ascertain how long we will do these calculations for. At the above stated use levels, 40,000 hours / 2992 hours/year = 13.36 years. I'll round down to 13 years.
So now we can plug this into time-value-of-money economics equations to determine whether or not it's worth it to invest in LED bulbs. I'll calculate this using the annual worth method, and if the final value is greater than zero, the idea is profitable relative to the status quo and should be pursued.
AW
Connecticut(8%) = -$21(A/P, 8%, 13 years) + ($35.91) = -$2.66 + $35.91 = $33.25
AW
US Average(8%) = -$21(A/P, 8%, 13 years) + ($18.28) = -$2.66 + $18.28 = $15.62
Thus, in both cases, the LED bulbs both result in an positive annual profit over the status quo (incandescent bulbs), and depending on what area of the country you live in and how much you use light bulbs, they may even pay for themselves in less than a year.
Quote:
Originally Posted by IndySam
I can't afford spending hundreds of dollars on a new technology that has no other benefit other than potential costs savings in the future. Especially when that potential could be way off. It's just not gonna happen.
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No reason to replace every bulb at once. Replacement by attrition spreads the "initial price shock" out over a period of several years.
As for the "potential" part, that relies on the accuracy of the life-span characteristics of the new LED bulbs. Assuming the life span follows a normal distribution, a very large standard deviation in the mean life expectancy would be required to have a high sensitivity of the expected savings. Using a simple non time-value-of-money approach, the point at which a LED bulb breaks even against an incandescent is
(price of LED - price of incandescent) / ((watts of incandescent - watts of LED) * price per kWh)
($25-$2) / (0.06 - 0.007) * 0.1153) = 3763.76 hours.
Thus, the savings are only "potential" if the lifespan of the LED bulb is less than 3764 hours. There would have to be an
INCREDIBLY HUGE standard deviation in the life span of LED bulbs to lead to a even a 1% chance of not profiting off replacing an incandescent bulb with an LED bulb.
Quote:
Originally Posted by JesseK
Longer-term, these bulbs need to come down in price. The only way (at least in a way we have the power to influence, since no one knows how insane the margins are on a single bulb) to do so is to increase demand for the technology significantly. Looking around work today, I see hundreds and hundreds of 4' long fluorescent bulbs with a ~1" diameter -- the same standard bulb I see used almost everywhere (in the schools, corporate buildings, labs, etc). Maybe next year we can expand this program to sell light bulbs that fit into the same sockets our sponsors have so we may expand our fund raising efforts to them.
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While Brandon might provide a better answer to this, the fluorescent tube lights are different than the squiggly lights one puts in a residential light fixture, in that they have an external ballast to pump the voltage up to around 600V. Any drop in replacement bulb would therefore have to run at 600V, which presents a major challenge. Removing the ballast and wiring the tube fixture directly to 120 or 240 VAC would probably make it easier to make LED tube lights, but would eliminate the possibility of putting a fluorescent tube back in.