Lighting and displays: Unit economics
Why a USD 7.60 halogen habit shrinks to USD 1.50
What this tab covers What it costs to move a unit of energy this way: capital and operating costs, tariffs, utilisation and how it compares with the alternatives.For lighting, electricity is the main running cost and LEDs cut it by a factor of about five against halogen. The cost of light is best expressed per million lumen-hours.
Key costs
| Measure | Value | Note |
|---|---|---|
| Efficacy, standard incandescent lamp (60 W type) | About 16 lm/W15 | EIA, 2014 |
| Efficacy, halogen lamp | About 20 lm/W1 | |
| Efficacy, compact fluorescent lamp | About 50-67 lm/W115 | IEA gives about 50 today; EIA gave about 67 in 2014 (sources differ on product mix) |
| Efficacy, modern linear fluorescent system (lamp plus ballast) | Up to 108 lm/W16 | Best case, DOE 2019; high-intensity discharge lamps not covered in the sources checked |
| Efficacy, average LED sold today | About 100 (best up to 230) lm/W1 | Average has roughly doubled since 2015 |
| US residential electricity price | 17.30 US cents/kWh (2025)5 | |
| Electricity cost of 1 million lumen-hours, average LED | About 1.73 USD (2025, calculated)15 | 10 kWh at 17.30 cents; halogen about 8.65 USD (50 kWh) |
| Electricity avoided by LED gains | Indoor building lighting would use about 70% more without them%1 | More than 500 TWh residential and about 800 TWh services |
| Lifetime of early-generation LEDs | 10-15 years1 |
Where the money goes
| Item | Share or amount |
|---|---|
| Electricity | Dominant lifetime cost for most lamps; no published global share found |
| Lamp or luminaire purchase | Not published in the sources used |
Worked example (calculated, 2025 USD): a room needs about 800 lumens for 3 hours a day. A halogen lamp at 20 lm/W draws 40 W and uses about 44 kWh a year, costing about USD 7.60 at the US residential price of 17.30 cents/kWh. An average LED at 100 lm/W draws 8 W and uses about 8.8 kWh, costing about USD 1.50. A best-in-class 230 lm/W LED would need under 3.5 W. Multiplied across billions of lamps, this is why lighting electricity use has stayed roughly flat while floor area grew by more than 20% in a decade.
Sources
- The next wave of LED lighting: smarter, circular and more efficient (commentary) International Energy Agency, 2026
- Short-Term Energy Outlook, Table 7c: US regional electricity prices (October 2026) US Energy Information Administration, 2026
- LED bulb efficiency expected to continue improving as cost declines (Today in Energy, 19 March 2014) US Energy Information Administration, 2014
- Energy Savings Forecast of Solid-State Lighting in General Illumination Applications (2019) US Department of Energy, 2019