Lighting the Future: The Sustainable Choice Saves More Than Energy

Psychology at Play in Energy Efficiency

Studies have shown that the ability to delay gratification, resisting the temptation of a smaller but more immediate reward in order to receive a larger more enduring reward, has been linked to everything from better academic performance to future financial success.  The inability to resist the immediate temptation could be due to the environmental reliability of a situation or the vagueness of future rewards.  Whichever the case, applying these neuroeconomic principles to the realm of climate change may help explain the polarizing position that people take on the issue in the United States.

One example of this dynamic in action can be seen in the revolution that has taken place in lighting without most people even being aware that it is happening.  The lightbulb is a mundane part of daily living; so much so that most of us give them no consideration until a burnt out lamp sends us begrudgingly to the basement to fetch a replacement and stepstool.  And when our value-pack of incandescent replacement bulbs runs out, the choice at the hardware store is typically simple: buy the cheapest option.  It’s only a lightbulb after all.

Or is it?  When Congress passed the Energy Independence and Security Act of 2007, an instant backlash arose over the misconception that incandescent light bulbs would subsequently be banned.  While some people were so upset that they started to hoard the bulbs, others were excited for the prospect of such a simple solution to building energy efficiency.  For many though, the $50 price tag for 1 light-emitting diode (LED) bulb was prohibitively expensive and the monetary savings in energy usage would never make up the difference in initial price.

Lighting the Science on Bulbs

What many people (including myself) were unaware of at the time was that LED bulbs work differently than incandescent bulbs or even compact fluorescent lightbulbs (CFLs) and were subject to different laws of economics.  Incandescent bulbs pass an electric current through a wire filament until it becomes so hot that it glows and produces light.  These types of bulbs stop working once the integrity of the filament is compromised from repeated heating and cooling and ultimately break.  When you shake a burnt out standard lightbulb, you can hear the tingle of the filament fragment bouncing around inside the glass.  While effective and certainly inexpensive to produce, incandescent lights are incredibly energy inefficient; the University of Wisconsin estimates that only 5-10% of the electricity used in a bulb contributes to producing the light while the other 90-95% of energy is dissipated as heat.

CFLs work on a similar principle to incandescent lights. In a CFL, an electric current is passed through a tube containing reactive gases (argon with a smaller amount of mercury). The interaction of electricity and gas produces invisible ultraviolet light that passes through a fluorescent coating on the glass to make it visible to the naked eye.  This is why CFLs are always built in the long spiral shape: to create a greater surface area through which visible light can pass through this special coating.  The next time you are in your office building or a hospital, look up at the long, thin bulbs used for light.  These fluorescent lights are the precursor to CFLs.  And while CFLs use about 70% less electricity than standard incandescent bulbs and last up to 10 times as long, there are several drawbacks to their usage.  A typical CFL can cost about twice as much as a standard incandescent light and due to the mercury inside, have to be disposed of properly to ensure this toxic gas does not contaminate your home, business, or the environment.  Many people often find the light emitted from CFLs to be “sterile” and uninviting in a home or restaurant.

The light-emitting diodes (LEDs) are the latest entry into the $15 billion U.S. lighting market and are rapidly carving out more than a niche in the industry.  While incandescent bulbs use heat to product light and CFLs use gas, LEDs are technically not light bulbs at all.  They are semiconductors that produce light when electrons move around inside of them.  Think of them as computer chips that glow.  This means that they are subject to Moore’s Law, which essentially states that computing power per chip doubles every two years.  And as the power of LEDs grows with innovation, the price of production decreases as well.  Coupled with the increasing uptake of LEDs in homes and businesses, this has led to a more than 600% drop in price from the unimaginable $50 per bulb to a more reasonable $8 per bulb today.  And while this still may seem too high to many of you (incandescent bulbs cost $1.25), this is where the principle of delayed gratification really pays off.

Lightbulbs Decoded

Besides being one of the most boring items on the planet to shop for, the packaging that light bulbs come in is covered in all sorts of electrician jargon.  What’s the difference between ‘lumens’ and ‘watts’? What is this ‘K’ measurement? What do ‘hours’ matter? These are the questions that I used to frustratingly ask myself when shopping for bulbs.  Fortunately, the answers are pretty easy.

Let’s go in order.  For years, most people have talked about light bulbs in terms of watts: 100W, 75W, and 60W were standard terms on the rare occasion lights came up in conversation.  I used to buy 100W bulbs thinking that I was getting more bang for my buck by having the higher wattage bulb.  As it turns out, watts are the amount of energy consumed by the bulb to produce light while lumens measure how bright the light is.  It actually cost me more in the long run to buy the “fancy” bulbs.

As other options of lighting have come out over the years, a new measurement was put on the package to measure the color temperature.  This is the bar on the front of the box that goes from blue on one end to red on the other with a hash mark to determine where this particular bulb falls on the spectrum of color.  Measurements typically are anywhere between 5000K and 2700K.  The ‘K’ is for Kelvin, which is a unit of absolute temperature.  This measurement was used to give consumers an idea of how ‘warm’ or ‘cold’ a light is; the higher the degrees Kelvin, the whiter the color temperature.  For instance, the standard ‘soft white’ incandescent light that has been used for decades ranges between 2700K-3000K while the typical ‘daylight’ CFL (read harsh white) is 5000K.

The simplest measurement on the packaging is the ‘hours’ of life.  This is simply the average amount of time that a bulb will produce light before burning out.  While incandescent bulbs will last about 1000 hours, CFLs can last up to 10,000 hours and LEDs will last for 25,000 hours with newer models stretching to as long as 50,000 hours.  And while the standard bulb’s 1000 hours may seem like plenty of time, the average light bulb is used for 3 hours per day.  This means that you will be replacing that bulb once every 11 months.  And with the average home having 45 light bulb sockets, this is a lot of shopping and replacing.  But inconvenience is not a good enough reason to spend almost $7 more per bulb, is it?

Money Spent is More Money Saved

Well, for most people not as the sole factor in the decision making process. But this is where the ability to delay gratification (you knew I would get back to it eventually) can pay you back and then some.  In order to understand the true cost of the different lighting options on the market, it is important to consider other factors besides the price per bulb.  These factors are the watts needed to generate light, the lifetime of each bulb, and the average hourly energy cost. 

I will save you from the research and math involved and tell you that the average hourly energy cost in kilowatt hours (kWh) in the United States is $0.12.  Knowing this, we can determine the approximate yearly cost of operating a 60-watt incandescent bulb as $7.88, a 13-watt CFL as $1.71, and a 8.5-watt LED as $1.12.  And while these calculations may be approximations, the money is real: it costs more than seven times as much money to operate a standard bulb as a LED.  Now add this up over a long time horizon and you can see how much money you are throwing away by buying the “less expensive” bulb at the store:

Let’s be clear that the money that you save at the store on incandescent bulbs you are paying back with interest to your utility company.  And this is just the cost of operating one bulb: Remembering that the average home has 45 such bulbs and you are looking at over $800 to light your home for two years with incandescent bulbs compared to about $500 for the equivalent LED option.  With these prices, your energy efficient light bulbs are paying for themselves in just over a year.  Or maybe even sooner…

Public Policy to the Rescue

As global issues such as climate change and air pollution have become increasingly important to government leaders, policies have emerged to encourage individuals and businesses to be more resource efficient in their energy expenditures.  On the consumer side, the Energy Information Administration’s ENERGY STAR labeling program is one of the more common programs.  In order to qualify a product for ENERGY STAR certification, it must use 20 to 30 percent less energy than federal standards require.  The labeling process simplifies the decision for the consumer while shopping: If an appliance has an ENERGY STAR label on it, you can be assured that it will consume less energy (and therefore less of your money) than an equivalent product without the label. 

Besides this obvious advantage, there are lesser known benefits to opting for energy efficiency. Purchasing a product with the ENERGY STAR label can also qualify you for rebates from your local utility.  Pepco, the electric service provider for Washington DC and parts of Maryland, offers rebates on certified purchases of ENERGY STAR lighting products: $3 per bulb on select CFLs, $7 per bulb on select LEDs, and $10 on select CFL/LED fixtures.  And Pepco is far from alone; if you research your local utility online, most offer some sort of financial incentive to install energy efficient products in your home or business.  Rebate options like those offered by Pepco cut the payback time on LED lighting from just over a year to between 6 and 7 months.

But why would a utility company, that makes money by selling you more energy, want to incentivize people to use less energy?  One lesser known results of the Energy Independence and Security Act of 2007 has been energy efficiency mandates from federal and state agencies.  One such mandate is the requirement that a utility take a small percentage of total revenue (typically 1 percent) and use that money to fund their energy efficiency programs.  In order to make these programs more palatable to the utilities, milestones are often built into them that allow the company a rate hike if they hit their efficiency targets (though the rate hike is always less than the savings).  Traditional utilities see the reality set before them: either encourage participation in energy efficiency programs and boost revenue per customer while selling less energy or sell less energy at the same rate while customers slowly migrate toward energy efficient products anyway.  Utility companies are helping to accelerate the trend toward an energy efficient economy by boosting their own programs.

Other entities exist outside of your direct energy supplier exist to offer incentives for energy efficient lighting.  Sticking with the Washington DC metro area, in 2008 the Council of the District of Columbia passed the Clean and Affordable Energy Act which established a Sustainable Energy Trust Fund.  This public fund led to the creation of a “Sustainable Energy Utility” to be operated by a private company under contract to the District Department of the Environment.  The DC Sustainable Energy Utility offers many of the same financial benefits for energy efficiency as a standard utility does for both residences and businesses.  As an example, a restaurant owner in Washington DC can claim rebates between $15 and $200 for select lighting fixtures and $8 to $20 per select LED bulb.  Between the Restaurant Association of Metropolitan Washington’s claim of 4,000 restaurants in the DC metro area and the Energy Information Administration’s ENERGY STAR Guide for Restaurants, having each restaurant replace one standard light with an energy efficient one would save $160,000 annually in energy costs (not including bulb replacement costs and rebates) while avoiding nearly 2.6 million pounds of CO emissions.

An Unstoppable Trend

The convergence of regulatory pressures, technological improvement, and economic forces is driving boring old light bulbs into the modern era.  If you believe in climate change and saving the planet, you can feel good that by making a simple inexpensive switch at home or work can cut greenhouse gas emissions by 75 to 90 percent over the standard bulb.  If you believe on the other hand that climate change science is a hoax or inconclusive, it is hard to argue with the financial benefits of LED bulbs at this point (and everybody likes to save money).  No matter what your scientific or political belief, it is clear that switching from the lighting option first patented in 1879 to more modern efficient options is inevitable.  As long as you can delay gratification for just a little bit longer.