The Stock Market and LED Lighting

As provided by CNN.com

At the end of trading on September 21, 2015, the Dow Jones Industrial Average ("the Dow") was down 7.37% for the year. This is a major index of 30 huge companies chosen to represent overall movement in the stock market. In other words, it's been a rough year for investments.

So what does that have to do with lighting? And specifically LED lighting? Something we talk about often at Lighting Supply: while many investments today come with a lot of risk, converting incandescent and halogen lighting to LED lighting does not. From energy savings alone, an LED bulb will often pay for itself in under two years, and then go on to put money in your pocket for years to come without the fluctuations of the stock market.

This is true on a larger scale when replacing high wattage HID bulbs like metal halides and high pressure sodium lamps. A corn cob LED replacement (named for their look when not lit) for a 400W metal halide, for instance, could save $150 to $200 per year in energy costs alone per the example on that page of our website. Never mind the maintenance savings of replacing the lamps less frequently and instant on lighting in parking lots and warehouse settings.

But even in home and office settings, LED lights make a ton of sense ... as long as you choose a quality brand. We throw in this caveat because a lot of companies are building LEDs with cheap components to drive prices down for the consumer market. But the result is that more bulbs will have shorter life spans, may not provide consistent color temperature (the look of the bulb when lit), and may have other issues. This is why we've linked to our selection of bulbs from quality brands at a 2700K color temperature designed to mimic the warmth of an incandescent bulb.

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Let's look at the home/office option from an investment standpoint. While electricity rates vary across the United States, they average about 13 cents per kWh, and this doesn't include delivery costs. Using a 60 watt incandescent bulb just 2.5 hours a day uses about 55 kWh of energy per year, costing an average of $7 per year. (Probably more with delivery costs.) A replacement LED would use just over $1 in energy. At today's LED prices, it would certainly take you less than 2 years to recover the cost of an LED bulb, and possibly under a year. (At the time of this writing, Lighting Supply sells this 6-pack of non-dimming LEDs at under $4 per bulb, and these are rated for a 25,000 hour life.)

In the world of investing, a nice long-term return of 7% will double your investment roughly every 10 years. An extraordinary long-term return of 14% would double it roughly every 5 years. But swapping your incandescent bulbs for LEDs can double your investment (i.e., pay you back the initial investment and then give you that investment back a second time) in 2-4 years in places where you regularly use your light bulbs.

The only problem with investing in LEDs? Once you've replaced all the lights in your home or office, you can't keep making the investment. Otherwise, it might be one of the wisest ongoing investments you could make.

Of course one final thought: this return on investment comes in the form of saving money from energy costs rather than sending you new cash as a business investment might. But as one smart fellow once said: a penny saved is a penny earned.

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