Better Budget: LED Lighting

Replacing old incandescent or halogen bulbs with LEDs is one of the simplest home improvements you can make. The savings are modest on a per bulb basis, but across an entire home they add up to meaningful reductions in your power bill. LED bulbs also last far longer, reducing the hassle and cost of replacements.

How Much Can You Actually Save

LED bulbs use up to 85% less electricity than traditional incandescent bulbs and around 75% less than halogen bulbs. According to EECA, the savings are real but proportional to your usage.

For a single bulb used four hours per day, the annual electricity saving is approximately $15 to $20 when replacing a 60 watt incandescent with a 10 watt LED equivalent. That may not sound like much, but the average New Zealand home has 20 to 30 light fittings. Replacing them all could save $150 to $300 per year.

Rooms with lights that run for extended periods offer the biggest returns. Living rooms, kitchens, and home offices where lights may run four to eight hours daily are priority targets. Hallway or closet lights that run for minutes per day offer minimal savings.

Based on electricity at 30 cents per kWh.

LED Bulb Costs

LED bulbs typically cost $3 to $15 depending on the type and quality. Standard screw in bulbs (E27 or B22 bases) are the cheapest at $3 to $8 each. Specialty bulbs like GU10 spotlights or candle shapes cost $5 to $12 each.

For a typical home with 25 bulbs, the total replacement cost ranges from $75 to $200. At savings of $150 to $300 per year, most homes recover their investment within six to twelve months.

Higher quality LED bulbs from reputable brands tend to perform better and last longer than budget options. Look for bulbs with a minimum five year warranty, which indicates manufacturer confidence in longevity.

Understanding LED Specifications

LED packaging includes several specifications worth understanding:

Lumens measure brightness. For reference, a 60 watt incandescent produces around 800 lumens. LED wattage is much lower but lumen output should match the old bulb for equivalent brightness.

Colour temperature is measured in Kelvin (K). Warm white (2700K to 3000K) matches traditional incandescent colour. Cool white (4000K to 5000K) appears more clinical and is often preferred in kitchens and bathrooms. Daylight (5500K to 6500K) is very bright and blue toned.

CRI (Colour Rendering Index) measures how accurately colours appear under the light. CRI above 80 is acceptable for most home use. CRI above 90 is better for areas where colour accuracy matters, such as art display or makeup application.

Replacing Halogen Downlights

Halogen downlights deserve special attention because they consume significant electricity and generate substantial heat. Each halogen downlight typically uses 35 to 50 watts, and homes often have eight to fifteen of them.

Two approaches exist for halogen replacement:

Retrofit LED bulbs replace only the bulb, keeping the existing fitting. Ensure you buy the correct type: MR16 (GU5.3) bulbs for 12 volt systems with two sharp pins, or GU10 bulbs for 240 volt mains systems with two studs.

For 12 volt MR16 systems, check whether your existing transformer is compatible with LED bulbs. Older transformers designed for halogen may not work correctly with the lower wattage of LEDs, causing flickering or failure. Compatible LED drivers cost $15 to $30 each.

Complete fitting replacement installs new LED downlight fittings. This costs more initially ($30 to $80 per fitting including installation) but provides better efficiency, reduces ceiling heat loss, and eliminates transformer compatibility concerns. For homes undergoing renovation, complete replacement is usually the better choice.

Dimmable LEDs

Not all LED bulbs work with dimmer switches. If you have dimmable lights, you must purchase LEDs specifically marked as dimmable, which typically cost $2 to $5 more than standard bulbs.

Even dimmable LEDs may not work with all dimmer switches. Older dimmers designed for incandescent bulbs can cause LED flickering, buzzing, or limited dimming range. LED compatible dimmers cost $25 to $60 and resolve these issues.

If dimming is important to you, replace the dimmer switch at the same time as the bulbs to ensure compatibility.

Smart LED Bulbs

Smart LED bulbs connect to wifi and can be controlled via smartphone apps or voice assistants. Features include dimming, colour changing, scheduling, and integration with home automation systems.

Smart bulbs cost $15 to $50 each, considerably more than standard LEDs. The energy savings are identical to standard LEDs, so the premium is purely for convenience and features rather than efficiency.

For most households focused on budget optimisation, standard dimmable LEDs provide better value than smart bulbs.

Practical Replacement Strategy

Rather than replacing every bulb at once, consider a staged approach:

Start with high use rooms where lights run for extended periods daily. Living rooms, kitchens, and home offices offer the best returns.

Replace halogen downlights next, as these consume the most electricity per fitting.

Finally, replace low use areas like bedrooms, hallways, and closets. These offer minimal savings, so you might simply replace bulbs as they fail rather than proactively.

Keep packaging from new LED bulbs so you can match specifications when adding to the same room later. Mixing different colour temperatures in one room creates an unpleasant visual effect.

Quality and Lifespan

LED bulbs are rated to last 15,000 to 50,000 hours, compared to 1,000 to 2,000 hours for incandescent bulbs. At four hours of use per day, a 25,000 hour LED should last over 17 years.

In practice, cheap LED bulbs sometimes fail earlier than rated. Purchasing from reputable brands with warranty backing provides better assurance of longevity. The small price premium is typically justified by longer lifespan and better light quality.

Small Savings That Compound

LED replacement is not a transformative financial decision. The savings are genuine but modest, perhaps $150 to $300 per year for a typical home. Over ten years, that amounts to $1,500 to $3,000 in reduced electricity costs from an initial investment of $100 to $200.

The real value lies in LED lighting being completely passive savings. Once installed, you capture the benefit every day without thinking about it. Combined with other small efficiency improvements, these savings contribute to a lower cost household that has more capacity for mortgage repayments or savings.

Every dollar saved on electricity is a dollar that could instead reduce your mortgage or build your financial security.