Question

Light emitting diode (LEDs) light bulbs have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.53 and lasts for 1,000 hours. A 15-watt LED, which provides the same light, costs $3.80 and lasts for 12,000 hours. A kilowatt hour of electricity costs $.129. A kilowatt-hour is 1,000 watts for 1 hour. However, electricity costs actually vary quite a bit depending on location and user type. An industrial user in West Virginia might pay $.04 per kilowatt-hour whereas a residential user in Hawaii might pay $.25.

Answer 1

To understand if LED bulbs make financial sense, we need to compare the initial cost and the electricity cost consumed by each bulb per hour.

For initial cost per hour we divide cost by numbers of hours, we can see that cost of LED bulbs is lower (figures highlighted in yellow)

For Electricity cost

As electricity cost is given per KWH we need to convert the watt in KWH by dividing watt by 1000.

The bulb uses KWH of power per hour so to calculate the power consumption per hour we have multiplied cost per KWH and divided it by number of total hours.

Working with formulas is given in excel

A. В C E F Incandescent light bulb LED Bulb 2 Particulars formula 3 Watt 60 15 4 Life span in hours 1000 12000 0.53 S $ 5 Initial cost 3.80 0.00032B5/B4 C5/C4 6 Initial cost per hour 0.00053 S 7 0.015 B3/1000 -С3/1000 8 Conversion to KWH 0.06 9 Total power consumption in KWH 180B8*B4 -C8*C4 60 10 11 Electricity cost per KWH 0.129 0.129 0.002(B9*B11)/B4 (C9*C11)/c4 12 Electricity cost per hour 0.008 $ 13 14 For user in West Virginia 15 Electricity cost per KWH 0.04 0.04 16 Electricity cost per hour 0.0006(B15*B9)/B4(C15*C9)/C4 0.0024 $ 17 18 For user in Hawaii 19 Electricity cost per KWH 0.25 0.25 0.004(B19 B9)/B4 (C19*C9) / c4 20 Electricity cost per hour 0.015 $ 21 22

Based on the working we can say LED bulbs make financial sense in any given cost as the cost is lower for LED Bulb in all the cases.