Economic profitability and ROI of a compact fluorescent bulb

How much money does the purchase of a compact fluorescent bulb earn you and what is its return on investment, i.e. after how long does it pay for itself? by C.Martz, February 2008.

Many consumers hesitate to equip themselves with compact fluorescent bulbs because they find their price too high. Indeed, these prices may seem high compared to conventional bulbs but the reality is simply the opposite: a classic bulb will make you lose money compared to an equivalent compact fluorescent model, provided that this one is of good quality!

So we “had fun” doing a little financial profitability calculation on the purchase of a compact fluorescent bulb, the results are amazing… but read on!

Hypotheses

To simplify we have retained the following assumptions:
- the bulb rotates 24h / 24h (continuously)
- lifespan of 15h (nothing prevents it from exceeding this lifespan)
- the electric kWh costs 0.1 € TTC (subscription included, it can be even a little more expensive in Belgium in particular)
- calculation based on the fluorescent spot E14 R50 bulb
- the bulb costs 17.50 € TTC
- a classic replacement bulb costs around 2.35 € including tax and has a lifespan of 1000 hours.

Bulbs of the comparative

a) Megaman high performance bulb R50 9W sold 17.50 € TTC

compact fluorescent bulb spot R50

b) R50 Philipps classic 40W bulb sold 4.69 € TTC 2.

spot light bulb R50

A) Cost of equipment: estimate of savings on bulb changes.

- Assuming that on average the manufacturer data is correct: 15 h = 000 x 15 h (yes yes!)
- Savings on material change: 15 * 2.35 - 17.50 = 17.75 €
- Cost per hour of operation of the classic: 2.35 € / 1000 = 0,00235 € / h = 0,235 € cents per hour.
- Cost per hour of operation of the fluorescent on the cost of the material: 17.50 € / 15 = 000 € / h or 0,001167 € cents per hour.

We see that the purchase cost compared to the operating hours of a conventional bulb is already more than 2 times more expensive than that of a compact fluorescent and this without taking into account the energy saving (and the cost of changing bulbs: transport, time spent doing something else, etc.).

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Now calculate the energy gain!

B) Gain on saved electrical energy

- Already the calculation is made in comparison with a classic bulb of 40W whereas the fluorescent given in example will produce the equivalent of 50W (I did not find classic R50 in 50W!). It does not matter, we will therefore take 40W equivalent since if I have trouble finding a 50W R50, consumers probably too!
- Each hour of operation we therefore gain 40 - 9 = 31 W equivalent
- Over 15h, that makes: 000 * 31 = 15 kWh
- Or in €: 465 * 0.1 = 46.50 € saved over 15 hours
- Energy cost per hour of the classic: 40/1000 * 0,1 = 0,004 € / h or 0,4 € cents per hour.
- Energy cost per hour of fluo: 9/1000 * 0,1 = 0.0009 € / h or 0,09 € cents per hour.

It is interesting to note that the operating cost per hour (or energy) is respectively for the classic 0,4 / 0,235 = 1,7 and for the fluo 0,09 / 0,1167 = 0,77 times higher than the investment cost.

C) Cumulative gains and return on investment

To summarize, we have:

- for the classic: 0,235 + 0,4 = 0,635 € cents per hour of operation.
- for fluo: 0,1167 + 0,09 = 0,207 € cents per hour of operation.

How many hours to make the compact fluorescent profitable = extra cost of the fluo / Gain per hour, in our case (the * 100 is because the hourly cost is in cents):

(17,50 - 2,35) * 100 / (0,635 - 0,207) = 3540 h.

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We therefore find a longer life than that of a conventional bulb. This result is therefore not true since the result depends on the equation, so to solve it, you have to either iterate or solve it graphically.

We chose the graphical method because it is more visible and understandable quickly.

comparative cost economic compact fluorescent bulb and incandescent

Each "jump" on the curve of the classic bulb corresponds to a change.

It therefore takes 3000 hours to make this model profitable, replacing a classic 40W model., this compact fluorescent bulb is profitable after the 3rd replacement. In other words, the compact fluorescent bulb is pure benefit for 4/5 of the rest of its life.

On the other hand, if the CFL bulb “breaks” before you lose money! You must therefore be careful not to buy low-end bulbs even if their cost seems attractive. Indeed a fluorescent bulb with the same characteristics at 10 € (assuming it exists) still takes 1200 hours to be profitable ! Now no one is safe from a network disruption and an unlucky flash of lightning (which should in theory be supported by EDF but we can always dream…).

D) Financial profitability of a fluorescent bulb

- We have just seen it: the hourly gain of a CFL in operation is 0,635 - 0,207 € cents per hour, ie 0,428 € cents per hour.
- Number of hours in the year: 24 * 365,25 = 8766 h
- By turning 24/24 the bulb would therefore save you: 8766 * 0,428 / 100 = 37.50 € the 1st year.
- Lifespan 15 hours or 000 years continuously.
- The 2nd year therefore remains: 15000-8766 = 6234 h. That is a gain of € 26,68.

By taking into account the initial investment of 17.50 € we therefore have a “virtual” financial return of: (37,50 + 17,50) / 17,50 = 314% per year the first year.

The 2nd year we obtain, more "modestly": (37,50 + 17,50 + 26,68) / (37,50 + 17,50) = 48,5% per year the 2ieme year.

In the end, the yield on 15 000h is: (17,50 + 37,50 + 26,68) / 17,50 = 466% on less than 21 months.

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C) Conclusions

Buying the compact fluorescent bulb is therefore clearly saving money compared to its filament equivalent, in our case:

- the financial gains amount to the life of the bulb at 64,18 € for an investment of 17,50 €

- So you win 64,18 / 17,50 = 3,66 times your investment. It's better than at the casino ...

- in comparison with a bank placement, this compact fluorescent bulb burning 24/24 is 314% efficiency the first year and 1% the second year. Your banker will have a hard time doing even a tenth (1/10) of this performance ...

- a bulb of lower quality may never be profitable if it breaks first. In our case the return on investment is 3500h.

- before putting your money in the bank at lousy rates (compared to those assessed here), think about this kind of very small investments ...Hey yes spending money buying better it can be an investment!

D) Remarks and limits of reasoning

- some will laugh by saying that it is ridiculous sums on a light bulb, it's true: but what about the tens of billions that can be changed in the world, how many light bulbs are there classics in France? What a mess ...

- some will laugh by saying that it is virtual and that it does not really allow you to earn money in your bank account. Certainly but to these people, surely too close to their money (or their banker or both), I say to go back to school to relearn the definition of an "economy".

- these calculations are only valid if the lifespan of the bulbs given by the manufacturer are realistic. Statistically, there is just as much chance that an incandescent bulb breaks prematurely as a fluorescent bulb ...

Finally, here are some models of high-end economical light bulbs.

More: test our compact fluorescent and classic bulb comparator simulator
Discuss the method and reasoning on forums: financial profitability of a compact fluorescent bulb

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