When it comes to economic stimuli, most of us assume that the only things that can affect it are things like stocks. However, all it takes to boost the American economy is a little bit of ingenuity and creativity. One small invention can transform entire industries, which will impact the financial security of the country in profound ways.
Although we may seem to be getting a bit technical here, the fact is that we’re talking about a standard household item. Odds are that you have several of them in your home already. No, we’re not referring to mobile devices and smartphones; we’re talking about LED bulbs.
Yes, it’s hard to believe that something so small and seemingly inconsequential can have such an impact on the US (and the world’s) economy.
Today we’re going to take a look at why LED has become such a remarkable cog in the financial wheels of the country, and discuss what we can expect in the future.
U.S. Energy Usage is Falling
You probably didn’t know this, but back in 2007, we hit a milestone that has stood to this day. A decade ago, the United States hit a peak of energy usage. That year, we consumed more electricity and other sources of power than any other in our nation’s history.
That seems like both a remarkable thing and also a bit puzzling. If 2007 was our peak, then where has our energy been going?
Although many different factors led to the decline of our overall usage, one thing that has shifted dramatically is the prevalence of energy-efficient devices. Whether it’s home appliances or LED bulbs, Americans are saving more electricity than we have in the last decade.
As you can imagine, this is a good thing. Considering that energy production and the side effects that come with it (i.e., climate change) are at the forefront of our national attention, knowing that we’re using less energy with each passing year is a comforting thought.
LED Lighting Was a Game-Changer
It’s hard to believe that it wasn’t too long ago when the majority of bulbs in the US were made of the traditional incandescent filament. These lights were highly inefficient (over half of the energy produced was heat), but they were everywhere.
It wasn’t until around 2009 when LED bulb prices started to drop substantially, which drove a significant push for consumers to adopt them. Even with exponential growth and adoption of LED technology, it took until 2016 when they finally unseated incandescent bulbs as the go-to technology for consumers of all types (61% of market share).
In fact, when compared to most other devices, this fundamental shift has been one of the fastest and most impactful to both the way we live and the way we consume energy. As prices continue to drop, LED will surge ahead and account for up to 70% of all light bulb sales, according to a report by Goldman Sachs.
Putting the Two Together
So, we know that our overall energy usage is down and still in decline, and we also know that the proliferation of LED bulbs started to skyrocket around the same time. However, is this an example of causation or correlation? Just because two things can be correlated does not mean that one causes the other.
To better understand this, let’s look at some hard numbers.
- When comparing LED bulbs to incandescent, the former uses 85% less energy overall
- Right now, it’s estimated that there about one billion LED and CFL bulbs in circulation
- At just three hours of operation per day (a highly conservative number), we can determine that Americans are saving up to 50 billion kilowatt-hours per year
- Per capita, this translates to about 160 kWh annually
- Since 2007, the overall decline in energy usage has been approximately 1,161 kWh per capita
As we can see, although switching to LED bulbs doesn’t account for the bulk of our reduced energy usage, it is a huge piece of the puzzle. Considering that up to 80% of households use energy-efficient lighting, it’s safe to say that this represents a fundamental economic shift.
The Financial Benefits of Switching to LED
When talking about such large numbers, it’s easy to get lost and not understand how it affects you personally. As such, we want to show you what you can expect when you switch to LED lighting.
Longer Lasting Bulbs
Unlike incandescent options that usually last a year or so, LEDs are often rated to keep shining for up to a decade or more. Thus, even with a slightly higher price tag, you won’t have to replace them as often. Overall, you can save up to $50-100 per year on replacement lighting costs, depending on how many bulbs you use.
Lower Energy Bills
As we mentioned, LED lights use about 85% less energy than incandescent. This means that your average price of electricity is going to be less than a quarter of what it would be with traditional lighting. Comparatively speaking, you can expect to save $80-$160 per year on utility costs.
Total Savings: Overall, by switching to LED bulbs, you should be able to save anywhere from $130-$260 per year. When you consider that you have at least ten years before you have to replace the bulbs, that number swells to $1,300-$2,600 during that same period.
With so much money in energy savings and product costs, it’s no wonder that LED bulbs are having such an impact on the economy. As our thirst for energy-efficient lighting continues to grow, these numbers will increase with it.
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