Wednesday, February 3, 2010

LED Lighting Reaches 1-Year Threshold

LED technology for interior lighting improved energy efficiency by 30 percent last year, and now, it is on the verge of a key pricing threshold.

The energy cost of operating a 60-watt incandescent light bulb continuously for a year is, according to a rule of thumb, about $60. The price of an LED array to replace a 60-watt light bulb is now about $65 to $85. At the low end, the price could fall below $60 any day now.

The cost of installing a traditional light bulb and operating it for one year is now about the same as that of installing an LED array and operating it for one year. The comparison is particularly relevant for lights that have to be on all the time. The one-year comparison is important because it reflects a common budget window. In many places, if you can put a cost-cutting measure in place and have it pay back within the budget year, that’s when it will start to happen. A lower-level manager can go ahead and do it without special budget approval.

Only a small fraction of lights are on all the time, of course, and most of the energy in lighting goes into lights that are on about half of the time. It may be another two years before we can see a mass movement to convert these lights to LED arrays. But for lights that are on almost all the time, that’s a transition we will start to see this year.