Modern LED lightbulbs are over 80% more energy-efficient than incandescents and over 10% more energy-efficient than compact fluorescents (CFL). Nowadays, LED are so affordable that they can boast a payback period as low as 1 month. They are also more durable, reliable, long-lasting, non-toxic, dimmable, and temperature-resistant.
Break-even energy is the amount of energy that a lightbulb needs to save in order to pay for itself.
(break-even energy) = (lightbulb cost) / (electricity cost per kilowatt-hour)
Consider a $2 LED lightbulb. Assume that electricity in the area costs an average of 10 cents per kilowatt-hour.
$2 / ($0.10 per kWh) = 20 kWh
The lightbulb in the example must save 20 kWh of energy to pay for itself.
Lifetime Cost Savings
Lifetime cost savings is the total amount of money that a lightbulb will save you during its use until failure.
(lifetime cost savings) = (cost per kWh) * (lifetime energy savings)
Consider the same lightbulb in the previous example. It emits light equal to a 60W incandescent but only consumes 10W. Therefore, the power saving rate is 50W. The lightbulb will fail after about 10,000 hours. Lifetime energy savings is hence 500kWh.
($0.10 per kWh) * (500 kWh) = $50
The lightbulb will save you $50 over its lifetime.
Rate of Return
(rate of return) = [(operational hours per period) * (lifetime cost savings) / (lifetime hours)] / (lightbulb cost)
Consider the same lightbulb in the previous example. Suppose it will be used 12 hours per day, which adds up to about 360 hours per month.
[(360 hours per month) * ($50 / 10kh)] / $2 = 90% per month
The lightbulb yields a monthly rate of return of 90%.