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The Real Reason You Should Change to LED Lighting

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The Real Reason You Should Change to LED Lighting

Sure we all know LED lighting is more efficient so changing your existing incandescent and halogen lighting to LED will help save the planet.  But have you stopped to think about more immediate benefits to you?  Money, yes efficiency translates to lower electricity bills and more money in your pocket.  How much, well a lot actually.  It’s not hard to appreciate the efficiency advantages of LEDs over halogen lighting but looking at the wattage comparisons below, for example a halogen light bulb outputting the same light intensity as a 50W halogen uses on 20% of the power.  

Light Output


12V Halogen












In order to calculate the extra dollars in your pocket using LED lighting we need to make some assumptions. Lets stay with the 50W Halogen light bulb exampe, outputting 750 Lumens with the LED drawing only 10W of electrical energy.  Our usage and electricity cost assumptions are included in the table below.


Lighting requirement

750 lumens approx.

Bulb wattage-Halogen


Bulb wattage-LED


Light operating

5 hours/day

Electricity cost  AUD $

Assumed average from the table below

30 c/kWh


Approximate electricity costs in Australia (Eastern States only)














Let’s calculate the annual cost for both bulb types

  • Electricity cost – Halogen $AUD/yr                :           AUD $27.38
  • Electricity cost – LED $AUD/yr                       :          AUD $5.48


The saving per year by swapping from halogen to LED is $21.90, for just one bulb!!    Think about that, it costs almost $22 per year to operate one single 50 W halogen light bulb for 5 hours per day.  Houses have lots of bulbs, sure they don’t all operate for 5 hours a day, but many do.  Now multiply the single bulb cost of electricity by the number of bulbs used frequently in the home e.g.  bedrooms, kitchen, living area.  For a typical house that may be 20 bulbs, in which case the saving in electricity over one year is $438!  Wow. 

I know but what about the cost of swapping the lights over to LED?  Well the good news is that in most cases there are options to replace only the bulb and not the entire fitting.  This is true for the standard incandescent bulbs, and also for most, but not all, downlight bulbs.   In fact it gets a little tricky for down lighting, because low voltage lights have transformers, and there are a lot of different types of transformers currently installed in houses around Australia, and also there are many different types of LED bulbs now on the market.  So finding the right option for replacing your current down lights can be confusing.  The important technical considerations of swapping halogen downlights to LED are covered in The Midlife Man article “How to Change Your Home Lighting to LED” .


Australian Government REES Scheme

The Australian government Retailer Energy Efficiency Scheme (REES) offers rebates to encourage both business and residential (yes residential is included despite what the name implies) to change to the more efficient LED lighting.  This scheme is offered through approved companies.  Each company has a slightly different pricing structure, however as an example one company has offered:

  • AUD $5.00 / downlight bulb replaced
  • AUD $13.00 / light kit replaced

These prices including labor.  Comparing these prices to those in the local hardware store it appears as though the REES scheme covers about 50% of the hardware cost, and all of the installation cost, by an approved Electrician.  You only need an Electrician if you want to undertake the lighting upgrade to LED under the REES scheme.  If you want to change your lighting over yourself it is perfectly legal,  as downlights are typically installed with a connector to a standard 3 pin socket in the ceiling (well they should be). 

So, based on the REES costs quoted above, in the case of my house (48 downlights)  I have assumed 21 replaced as bulb only, and 27 as whole light kit, mostly because some are on dimmers and a bulb only swap from LED to halogen will not work for lights on dimmers.  The total cost is then $456.  My estimated annual saving in electricity costs is AUD $500-600 so payout will be less than one year.  Seems like a good deal to me and I believe the Australian Government is keeping the REES scheme running until 2020. 


LED Costs

The economics are so compelling in Australia right now (well mostly because of the high electricity costs) that you don’t need a government rebate scheme to justify changing the LED.  If you only have a few lights that are high demand, then only change these to LED, and you can do it yourself.  

Approximate costs for some of the many light bulb and light kit options available in the local hardware store:

Replacement LED bulbs (5W) designed to swap with halogen bulbs

AUD $10

Replacement LED fitting (7W) designed to swap with halogen fitting (retain halogen transformer)        

AUD $39

GU10 LED (5W) kit 240 V MR16

AUD $20

GU10 LED (9W) kit 240 V MR16

AUD $30

MR16 LED (7W) dimmable

AUD $40

12V 60W dimmable transformer

AUD $10

So at current typical Australian eastern state electricity costs, which is expected to rise significantly over the next year or two, payout for downlight change over to LED would be:

  • Bulb only             :   6 months
  • Entire fitting         :   12- 24 months

depending on brand and light configuration selected as replacements, and your electricity costs of course.

Keep in mind that LED lighting technology gets better and cheaper every day, and when you consider that LED bulbs have an incredibly long life expectancy often around 50,000 hours (over 5 years of continuous operation!!) the bulb and/or fitting purchase cost becomes only a small part of lifetime total cost for a frequently used bulb.


The Take Away

  1. Government scheme or not, with rising cost of electricity changing your home lighting, or at least the high use lights, can save you a lot of money
  2. In the case of downlights, changing the bulb only will be the cheapest option in most cases, but make sure the new LED bulb is designed to function as a halogen replacement.   If you intend to change a large number of downlight bulbs to LED and they have the same type of transformer, it is suggested you try one bulb first to see if the result is acceptable before purchasing the remainder of the bulbs.
  3. Whether you intend swapping the bulb only or the entire light kit, it is an easy job and does not require an Electrician, and can be legally done by the home owner. 
  4. If you want to take advantage of the Australian Government REES scheme then the changeover needs to be organized through a government approved scheme provider



Disclaimer: The content of this article and other articles on this website are for informational purposes only and do not constitute professional advice. Please seek advice from a professional in the relevant field, in relation to any specific matter. Refer to the website Terms and Conditions. 



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