# Lighting and displays: Unit economics

Why a USD 7.60 halogen habit shrinks to USD 1.50

Source page: https://www.materialinsights.org/energy/e_lighting/economics/

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/W^[15](https://www.eia.gov/todayinenergy/detail.php?id=15471) | EIA, 2014 |
| **Efficacy, halogen lamp** | About 20 lm/W^[1](https://www.iea.org/commentaries/the-next-wave-of-led-lighting-smarter-circular-and-more-efficient) |  |
| **Efficacy, compact fluorescent lamp** | About 50-67 lm/W^[1](https://www.iea.org/commentaries/the-next-wave-of-led-lighting-smarter-circular-and-more-efficient)^[15](https://www.eia.gov/todayinenergy/detail.php?id=15471) | 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/W^[16](https://www.energy.gov/sites/prod/files/2020/02/f72/2019_ssl-energy-savings-forecast.pdf) | 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/W^[1](https://www.iea.org/commentaries/the-next-wave-of-led-lighting-smarter-circular-and-more-efficient) | Average has roughly doubled since 2015 |
| **US residential electricity price** | 17.30 US cents/kWh (2025)^[5](https://www.eia.gov/outlooks/steo/tables/pdf/7ctab.pdf) |  |
| **Electricity cost of 1 million lumen-hours, average LED** | About 1.73 USD (2025, calculated)^[1](https://www.iea.org/commentaries/the-next-wave-of-led-lighting-smarter-circular-and-more-efficient)^[5](https://www.eia.gov/outlooks/steo/tables/pdf/7ctab.pdf) | 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](https://www.iea.org/commentaries/the-next-wave-of-led-lighting-smarter-circular-and-more-efficient) | More than 500 TWh residential and about 800 TWh services |
| **Lifetime of early-generation LEDs** | 10-15 years^[1](https://www.iea.org/commentaries/the-next-wave-of-led-lighting-smarter-circular-and-more-efficient) |  |

#### 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

1. [The next wave of LED lighting: smarter, circular and more efficient (commentary)](https://www.iea.org/commentaries/the-next-wave-of-led-lighting-smarter-circular-and-more-efficient) International Energy Agency, 2026
2. [Short-Term Energy Outlook, Table 7c: US regional electricity prices (October 2026)](https://www.eia.gov/outlooks/steo/tables/pdf/7ctab.pdf) US Energy Information Administration, 2026
3. [LED bulb efficiency expected to continue improving as cost declines (Today in Energy, 19 March 2014)](https://www.eia.gov/todayinenergy/detail.php?id=15471) US Energy Information Administration, 2014
4. [Energy Savings Forecast of Solid-State Lighting in General Illumination Applications (2019)](https://www.energy.gov/sites/prod/files/2020/02/f72/2019_ssl-energy-savings-forecast.pdf) US Department of Energy, 2019

## Other sections

- [Summary](https://www.materialinsights.org/energy/e_lighting/index.md)
- [Overview](https://www.materialinsights.org/energy/e_lighting/overview/index.md)
- [Correlation](https://www.materialinsights.org/energy/e_lighting/correlation/index.md)
- [Science and limits](https://www.materialinsights.org/energy/e_lighting/science/index.md)
- [Value chain](https://www.materialinsights.org/energy/e_lighting/valuechain/index.md)
- [Engineering methods](https://www.materialinsights.org/energy/e_lighting/methods/index.md)
- [Equipment and suppliers](https://www.materialinsights.org/energy/e_lighting/equipment/index.md)
- [Relationships](https://www.materialinsights.org/energy/e_lighting/links/index.md)