LED lighting technology opens the door to the first truly "super-efficient, cost-effective" lighting solutions for commercial, institutional, and residential applications.  The newest generation of LED bulbs have been designed to use the same lighting fixtures as incandescent and compact fluorescent bulbs.  In the case of standard fluorescent bulbs the installer needs to cut the ballast wire as it is not utilized with the LED replacement bulbs.  An added bonus to this generation of LED bulbs is that, in most cases, they are dimmable, unlike many of the bulbs they are designed to replace.

An industry insider who did not wish to be identified said “For the first time, this type of LED bulb offers dramatic energy savings at a sensible cost, which will enable rapid customer payback and ongoing energy savings.  We anticipate very high customer interest and significant demand, especially in the retail and hospitality industries.  This is particularly true when businesses realize the substantial additional savings of 90% or more in labor costs associated with frequent changing of incandescent bulbs."

The new LED bulbs have many of the usual advantages of solid-state lighting technology, such as low power consumption (the bulbs consume as little as 3.0-5.6 watts), robustness (they have a polycarbonate housing) and a long service utilization life (claimed to be 50,000-100,000 hours). 

The key appears to be in the thermal dissipation technology being employed in the new LED bulbs that significantly reduces heat generated by the bulb, leading to cooler operation and longer life.  Also, by utilizing the new smaller, brighter LEDs packed in the same area, the bulb produces more light without increasing the size of the bulb package.  This produces a bulb with superior light quality and consistency while producing up to 30% greater light output per LED which translates to fewer LEDs per bulb; and since LEDs account for the majority of a bulb's cost, this translates into a lower cost per bulb.

The newer bulbs also seem to have resolved the problem of color shift over time (caused, for example, when phosphors degrade in white LEDs) by using red, green and blue chips in the bulbs.

Looking at the ROI –

Return on Investment comparisons between standard incandescent R-30 floodlights and the new LEDs generates a startling set of numbers…

The standard incandescent R-30 costs about $3.50 per bulb and lasts about 2,000 hours.  The new LED replacement costs about $35 but lasts between 50,000-100,000 hours.

Using the 50,000 LED life, to equal one LED bulb, a customer would have to purchase 25 incandescent bulbs for $87.50 (versus one LED bulb for $35).

When you factor in the additional labor of replacing the 25 incandescent bulbs the savings becomes potentially astronomical.  In a commercial or an institutional location, the cost of labor to change a light bulb must be factored into the total cost comparison.  A 300-room hotel using LED bulbs could save as much as $60,000 annually in costs for light bulbs, electricity, and labor.

Looking at the energy efficiencies generates similar savings…

A series of incandescent bulbs delivering a total of 50,000 hours of use would cost $276 to operate at a cost of $0.085 per kilowatt-hour for the electricity.

One LED bulb would use only $28 of electricity over the same period, a saving of almost 90%.

LED bulbs are available today in almost any existing bulb design or configuration.  They emit a variety of temperatures in the warm to bright white light or amber light for indoor or outdoor use, sometimes found in facilities such as parking garages.  Incandescent and fluorescent bulbs may be tinted yellow or amber, but they still emit light outside the desired color range.

CFL vs. LED

It is interesting to note that CFL (compact fluorescent light) offers a 10x savings on energy over standard bulbs, which is good, but characteristically they do not dim well.  LED bulbs offer a 10X over CFL and typically 25X over standard incandescent bulbs (without the dimming problems).

With the mercury in florescent lighting, LEDs are an environmentally obvious choice. A 25 Watt CFL is equal to a 100 Watt incandescent while a 16 Watt LED will produce the same light output. A CFL lasts 10 times as long as an incandescent, but an LED will last 100 times as long.

The Bottom Line

As with most business decisions even the green we spend to green the planet often comes down to the bottom line. In these tough economic times, people need to see that the ROI is so compelling that the savings alone make the decision a no-brainer.  Saving the planet is a bonus we all get to enjoy.


Editors note: Howard Lubert is the Managing Partner and Senior Analyst of SafeHatch LLC, a technology consulting firm in Wayne, PA that works with the private equity community and startup technology companies. He is so enamored with this concept he has taken an Executive Director position with a Philadelphia area company called GreenandSave, LLC which specializes in this type of green energy savings programs.