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Lower Cost and Higher Electric Rates Light the Way to Bulb Change

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By Jennifer Openshaw

RISMEDIA, Oct. 1, 2007-(MarketWatch)-By now you’ve seen — and probably tried — the so-called compact fluorescent bulbs designed to replace the 100-year old incandescent technology.

You’ve seen the funny-shaped white spirals almost everywhere. Once exotically priced at $7 to $8 each, now your home-improvement store has them for under $3.50, sometimes less. So I thought it worth 15 minutes of your time to study the choice.

Someday You’ll Have To

Brazil and Venezuela have already done it. Australia recently mandated conversion to fluorescents by the year 2010. The European Union and Canada are studying it, and I’d bet on mandates pretty soon. Closer to home, California, New Jersey and a handful of other states have taken the lead.

And as you read this, the U.S. House and Senate are looking at versions of a bill, following the California lead, phasing out incandescent bulbs by 2012.

“Mandate” sounds kind of onerous. But when the numbers make sense — you’ll probably want to.

How Much More Efficient?

- More heat than light. Only 10% or less of energy consumed by incandescent bulbs actually becomes light — the rest is heat (nice to hear as you deal with August air conditioning bills, right?).
- Compact fluorescents are more efficient. They turn 15% to 20% of energy used into light. Might not sound like much, but it’s about a 70% improvement. What once took 60 watts now takes 15; what once took 100 watts now takes 23.
- Compact fluorescents last longer. A typical incandescent bulb lasts 1,000 hours. Run a light 5 hours a day and it will last 8 months. Compact fluorescents last 8,000 to 12,000 hours — for years, effectively. Less time spent changing light bulbs too.

Running the numbers

So here’s the equation using EPA facts and figures, including an average electricity cost of 10.1 cents per kilowatt-hour (kWh) for electricity. This is over the 12,000-hour lifetime of a 15-watt compact fluorescent bulb, which is equivalent to 12 1000-hour lifetime 60-watt incandescent bulbs:

Bulb with Electric rates @10.1c/kWh Incandescent Compact Fluorescent
Lifetime usage 720 kWh 180 kWh
Lifetime electricity cost $72.72 $18.18
Replacement cost $6 (50 cents each) $3.50
Total cost $78.72 $21.68

Now, I don’t know how closely you read your electric bills, but with usage-based tiered pricing, my August electric bill averaged 20.4 cents per kWh. Rates vary across the country, but this really changes the equation:

Bulb with Electric rates @ 20.4c/kWh Incandescent Compact Fluorescent
Lifetime usage 720 kWh 180 kWh
Lifetime electricity cost $146.80 $36.72
Replacement cost $6 (50 cents each) $3.50
Total cost $152.80 $40.22

Now, at those electric rates, the numbers start to add up. Each compact fluorescent bulb, over its lifetime, saves $112.58. Using the assumption that the average U.S. home has 45 such lights, we’re starting to talk real money.

Doing your own math

So following the above example, here’s how you can calculate the savings yourself:

Compare wattage on the bulb of your choice. For a 100 100-watt incandescent bulb, the equivalent compact fluorescent wattage is about 23.

Find your electric rate. I know it’s not easy on today’s multipart electric bills, but somewhere there’s a figure for total electricity cost and watts used. Divide cost by watts used to get your average per-kWh cost (20.4 cents in my case.)

Calculate the cents-per-hour cost of the bulb. Easiest way is to divide the kWh usage of your bulb by 1,000, multiply the result by the cost per kWh (23/1000 multiplied by 20.4 = 0.47 cents per hour (compact fluorescent), 100/1000 multiplied by 20.4 = 2.04 cents per hour (incandescent).

Project the hours per day, per month, per year bulb usage. Two hours per day is 730 hours per year. Multiply by the cents-per-kWh just calculated. The compact fluorescent costs $3.43 to operate for a year, while the incandescent costs $14.89.

You get the idea.

The Bigger Picture

You might like these numbers but still question the ability to really save. What about your halogen spotlights? The outdoor floods? Are there replacements for these? The answer: not yet, but they’re working on it — -with specialized LED lights and modifications of existing technology.
And a recent Popular Mechanics study rates the quality of most compact fluorescents better than their equivalent incandescent, for the first time.

Meanwhile, the prospect of lower electricity cost — not to mention the social benefits — -makes it worth 15 minutes of my time.

Peter Sander contributed to this article.

Jennifer Openshaw is the author of ” The Millionaire Zone” and CEO of Openshaw’s Family Financial Network. She hosts ABC Radio’s Winning Advice and serves as an adviser to some of America’s top corporations. You can reach her at jopenshaw@themillionairezone.com.

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