3. Potential for Savings

Household-Level Savings

Households in the U. S. contain a total of 523 million lights that are on 1 or more hours a day--282 million of these are on 4 or more hours a day. The majority of these lights are incandescent--88 percent of those on 1 to 4 hours and 85 percent of those on 4 or more hours. Given the greater efficiency of compact fluorescent lights, how much would households save if they replaced their incandescent lights with compact fluorescents? Replacing incandescent lights that are on for a short period of time with compact fluorescents is not very cost effective, because compact fluorescents cost so much more than incandescents (about 22 dollars compared to 75 cents). However, at longer periods of use, compact fluorescents do become cost effective, in spite of their high initial cost. Figures 3.1 through 3.3 compare the total cost of an incandescent light with a compact fluorescent light, using the assumptions listed in Table 3.1.

Table 3.1 Assumptions Used in the Comparison Between Compact Fluorescent
and Incandescent Lights

Incandescent
Compact Fluorescent
Initial Cost of Bulb 75 cents22 dollars
Wattage 75 watts26 watts
Life of Bulb (hours) 750 hours10,000 hours
Hours Used per Day 6.7 hours6.7 hours

Sources: Energy Information Administration, Office of Energy Markets and End Use; Lighting Research
Center, Rensselaer Polytechnic Institute, The Lighting Pattern Book for Homes, 1993.

Assumptions Used in the Calculation of Potential Savings

Cost and Life of Bulb

A 75-watt incandescent bulb costs about 75 cents and has a rated life of 750 hours. A 26-watt compact fluorescent bulb costs about 22 dollars and has a rated life of 10,000 hours. The calculations in this report assume there are no additional costs involved in the replacement of incandescent lights, such as bulb breakage or the purchase of new fixtures. They also assume the bulbs last their rated number of hours, although the actual life of light bulbs varies from bulb to bulb.

Light Output

Light output is measured in lumens. A 75-watt incandescent bulb emits approximately 1,190 to 1,220 lumens while a 26-watt compact fluorescent bulb emits about 1,550 lumens. Although an 18-watt compact fluorescent has the same light output rating as a 75-watt incandescent (1,100 to 1,250 lumens), a bulb's rated light output is not the only consideration in choosing a replacement bulb. The location and position of the fixture affect the actual output of compact fluorescent bulbs, and the quality of the light may differ between compact fluorescents and incandescents. Consequently, for satisfactory light output, a compact fluorescent bulb may need a higher rated light output than the incandescent it is replacing. For these reasons, a 26-watt compact fluorescent bulb is used in the calculations, rather than an 18 watt bulb.

Hours of Use

Repeatedly switching a compact fluorescent light on and off reduces the life of the bulb. Therefore, compact fluorescent lights provide the biggest savings when they are used to replace incandescent lights that are used several hours per day. The calculations in this report are based on lights that are used four or more hours per day. According to the Lighting Supplement data, these lights are on an average of 6.7 hours per day.

Simple Payback

The calculations are based on 1993 dollars. They do not take into account changes in energy costs or changes in the value of the dollar over the lifespan of a compact fluorescent bulb.

Universal Replacement

This report assumes that all incandescent lights used four or more hours per day can easily be replaced by compact fluorescent lights. This assumption ignores the fact that some compact fluorescent bulbs may not fit into fixtures designed for incandescent bulbs. The EIA does not have data on the percent of fixtures that could be successfully converted to compact fluorescent lights, so it is unclear how erroneous this assumption is.

Calculation of Savings

At a rate of use of 6.7 hours per day, a compact fluorescent bulb lasts, on average, about 4.1 years. By contrast, an incandescent bulb lasts about 3.5 months. Figures 3.1 through 3.3 show the savings that accrue over the expected life span of a compact fluorescent bulb. The figures include the cost of repeatedly replacing the incandescent bulb. The cost comparisons are calculated for three different electric rates--5, 10, and 15 cents per kWh.

When electricity costs 5 cents per kWh, compact fluorescent bulbs save money after about 2.5 years and result in a total savings of approximately 12 dollars by the end of the life span of the compact fluorescent bulb (Figure 3.1). At a cost of 10 cents per kWh, compact fluorescents save money after 1.5 years and result in a total savings of 36 dollars (Figure 3.2). With the highest priced electricity--15 cents per kWh, compact fluorescents save money after only 1.1 years and result in a total savings of 60 dollars per bulb (Figure 3.3). The average household has only 2.5 incandescent lights that are on 4 hours or more, so assuming the same amount of savings per light, their total savings due to replacement would be twice the savings listed above. Therefore, even at the most expensive electric rates, an average household would save only about 120 dollars over a period of 4 years. For many households, this may not be incentive enough for them to purchase compact fluorescent bulbs.

Although these comparisons do not show a tremendous dollar savings in using compact fluorescent lights, they do show a sizable savings in electricity. In each of these three figures, the line plotting the cost of the incandescent bulb has a steeper slope than the line plotting the cost of the compact fluorescent, especially at higher electric rates. What this shows is that with incandescent bulbs, the life-cycle cost is composed largely of electricity costs. On the other hand, the life-cycle cost of compact fluorescent bulbs is made up mostly of the cost of the bulb itself.

For example, over a period of 4.1 years, at 5 cents per kWh, the price of electricity accounts for 37 percent of the life-cycle cost of a compact fluorescent light, but for 78 percent of the life-cycle cost of an incandescent light. Table 3.2 shows the cost of electricity and the cost of bulbs for fluorescent and incandescent lights, over a period of 4.1 years, by the price of electricity. The cost of powering a compact fluorescent bulb at the highest electric rate is little more than the cost of powering an incandescent at the lowest electric rate.

Another advantage of compact fluorescent bulbs is convenience. Incandescent bulbs need to be replaced about 13 times more frequently than compact fluorescent bulbs. In areas such as hallways, where bulbs are hard to reach, and light quality is not of utmost importance, the convenience of compact fluorescent bulbs is a particular advantage.

Table 3.2 Electricity Costs Versus Bulb Costs of Compact Fluorescent and Incandescent
Light Bulbs, by Cost of Electricity

Compact Fluorescent
Incandescent
Cost of Electricity (cents per kWh)
Bulb Cost
(dollars)
Electricity Cost
(dollars)
Bulb Cost
(dollars)
Electricity Cost
(dollars)
5 22 12.6810.5a 36.56
10 22 25.3510.5 73.13
15 22 38.0310.5 109.69

a Over a period of 4.1 years, a 75-watt incandescent bulb would have to be replaced 13 times. The initial cost of the first bulb, plus 13
replacement bulbs, times the cost of each bulb equals $10.5 (i.e., 14 bulbs at 75 cents each).
Source: Energy Information Administration, Office of Energy Markets and End Use
.

Aggregate-Level Savings

Potential aggregate U.S. household energy savings for replacement of all incandescent bulbs used more than 4 hours per day amounts to 31.7 billion kWh annually. [15] This assumes that the average incandescent bulb is 75 watts and is replaced by a 26-watt compact fluorescent bulb. Thirty-eight percent of this savings, or 12 billion kWh, would come from replacing the 44.1 million bulbs used 12 or more hours per day and 62 percent, or 19.7 billion kWh, would come from replacing the 196.6 million lights used 4 to 12 hours per day. These potential energy savings are 35 percent of the electricity used for lighting in 1993 (91 billion kWh).

Two programs designed to encourage households to use compact fluorescent lights found that most of the participating households would not be willing to pay more than 10 dollars for a compact fluorescent bulb. [16] Given compact fluorescent bulbs cost 20 dollars or more, individual households may need some incentive to use them and to contribute to the aggregate savings in electricity.

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