Take LED light bulbs for example!

The average LED light bulb that is used 5 hours per day will save $10-$20 dollars per year in energy costs versus an incandescent bulb.

LED lights are highly energy-efficient compared to other types of lighting products. Residential LED lighting products use at least 75% less energy than incandescent or CFL lighting products. In fact, most LED light bulbs only use between two to 17 watts of electricity, which is around 60% to 90% lesser than incandescent or CFL lighting.

When measuring how much energy you can save using LED lights, you also need to consider the lumens, which is the amount of light or the level of brightness lighting products can provide. For example, a 60-watt incandescent light bulb can emit up to 800 lumens of light. On the other hand, LED light bulbs can deliver the same amount of brightness using only 10 watts. The lesser your energy usage is, the lesser your cost will be.

Given these considerations, LED lights are generally more energy-efficient and cost-effective.

Energy rating chart with light bulbs. Energy efficiency concept

To understand how much money you can save when using LED lights, you need to first understand how the kilowatt hours work. A kilowatt hour (kWh) refers to the unit of energy that is equal to 1000-watt hours. Most electric companies bill consumers based on the number of kilowatt hours used each month. Thus, your monthly electric cost will depend on how much kilowatt hours you have consumed in a month.

The number of kilowatt hours you consume in a month will be multiplied by a rate, which determines the cost of your energy usage. Because LED lights use lesser amount of energy compared to incandescent and CFL lights, people who switch to LED lighting products will see a significant decrease in their monthly electric bill.

Let’s compare a 10-watt LED light and a 60-watt incandescent light bulb, both of which can give off up to 800 lumens of light. Considering the average electricity rate of $13.31 per kWh , the following table shows the cost to run one LED light for eight hours per day compared to the cost of using one incandescent light for the same number of hours per day.

Given the above example, you can save up to $1.64 per month or $20.02 per year if you choose to use LED lighting instead of incandescent light bulbs.