My good friend and business partner Mark Schwinghamer has recently moved to Sarilia Country Estates. I joined him for a glass of wine overlooking the beautiful North Saskatchewan river valley.
As is our custom, the conversation eventually shifted to construction and our plans to build green homes at Sarilia.
Mark commented that he had recently seen an LED light bulb at Walmart. The package claimed that the bulb would replace a 40 watt bulb and used only 3 watts of electricity. Life expectancy of the bulb is 40,000 hours.
When I asked my friend if he bought the bulb, his comment was ‘I can’t afford a $15 LED light bulb’. He bought the incandescent 40 watt light bulb with an estimated life of 1000 hours for $1.
Being an accountant by training, I can’t resist the opportunity to analyze Mark’s decision: Lets assume that Mark uses the light bulb about 4 hours a day.
At 4 hours a day, the LED will last 10,000 days or just over 27 years. During that same time period, Mark would have to change his incandescent light bulb approximately every 9 months or 40 times in the 27 years. So, at today’s prices, the incandescent light bulb would actually cost $40 over the 27 years while the LED will cost $15 once. Total savings of $25 on the cost of the LED vs the incandescent bulbs.
The LED uses 3 watts per hour or 12 watts per day. In 27 years, the LED will burn 120 KWhs of electricity. The incandescent bulb burns 40 watts per hour or 160 watts per day. In 27 years, the incandescent will burn 1600 KWhs of electricity. Mark pays about 11.4 cents per KWh for electricity so at today’s prices, the LED will cost $13.64 for electricity and the incandescent will cost $182.40. Total savings of $168.76.















