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Free calculator

Use this calculator to

  • Work out the annual kWh and cost saved by swapping halogen or incandescent lamps for LED
  • Calculate the payback period on an LED retrofit before signing off the spend
  • Compare lamp options fitting by fitting using real wattages and daily run hours
  • Estimate the CO2 saved to support sustainability reporting

LED vs Halogen Energy & Payback Calculator

Calculate energy savings and payback period when switching from halogen/incandescent to LED bulbs.

W
W
bulbs
hr/day
p/kWh
£
Results

Formulas

  • Annual saving = (Old W − New W) × bulbs × hours × 365 / 1000 × tariff
  • Payback (years) = Total LED cost / Annual saving
  • Typical LED lifespan: 15,000–25,000 hours vs 1,000–2,000 for halogen

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Common scenarios

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For business

Why this matters for businesses

Commercial LED retrofits typically pay back inside 18 to 36 months at current UK electricity rates, but the case only holds if you size the saving correctly. A 50 W halogen running 12 hours a day, replaced with a 7 W LED of equivalent output, saves around 188 kWh a year per fitting. Across a retail unit with 60 fittings, that is over 11 MWh a year, which at typical mid-market commercial rates is meaningful money before you factor in the avoided lamp replacements and maintenance access costs.

For a facilities or finance lead building the business case, the payback period is what unlocks capex sign-off, but the carbon line is what gives the project a second hearing. Each MWh of grid electricity avoided takes roughly 200 to 250 kgCO2e off the SECR scope 2 figure under the current UK grid carbon intensity. For an estate reporting under SECR or working toward a science-based target, a lighting refit is one of the cleanest interventions on the table, because the savings are real, the kWh is metered, and the carbon claim is defensible.

For hospitality and retail in particular, the operational case often beats the bare-bill case. Halogen lamps in display lighting fail on a 2,000 to 4,000 hour cycle. LED equivalents are rated for 25,000 hours and upward, which on a 12-hour daily duty is roughly six years between replacements. That removes a recurring service line, removes the ladder-and-access cost in trading hours, and removes the embodied carbon of the replacement lamps. None of which shows up in a simple kWh saving, but all of which lands on the operations P&L.

Common questions

How is the LED payback period calculated?

Payback (years) = total LED cost / annual saving. The annual saving comes from the wattage difference: kWh saved per year = (old W minus new W) x number of lamps x hours per day x 365 / 1000, multiplied by your unit rate for the cash figure. Replacing 40 lamps of 50 W with 7 W LEDs at 10 hours a day saves 6,278 kWh a year; divide the cost of the 40 LEDs by that saving priced at your rate.

What LED wattage replaces a 50 W halogen?

Match lumens, not watts. A 50 W halogen GU10 produces roughly the same light output as a 5 to 7 W LED GU10, because LEDs convert far more of their input power to light rather than heat. Similarly an 8 W LED replaces a 60 W incandescent and a 12 W LED replaces a 100 W one. Check the lumen figure on the packaging and the beam angle for spotlights, since a like-for-like beam keeps the lit effect consistent.

Does the payback figure account for lamp lifespan?

Not directly, which makes the result conservative. The calculator divides the upfront LED cost by the annual energy saving only. In practice LEDs last around 15,000 to 25,000 hours against roughly 1,000 to 2,000 for halogens, so over the LED's life you also avoid several rounds of replacement lamps and the labour to fit them. For a commercial site with access equipment costs, those avoided maintenance visits often shorten the effective payback noticeably.

How is the CO2 saving worked out?

The kWh saved each year is multiplied by a grid emission factor, the average kilograms of CO2 associated with each kWh of grid electricity. Every unit you no longer consume avoids the emissions of generating it. The factor falls over time as the grid decarbonises, so treat the figure as indicative. It is still a defensible input for sustainability reporting because it is derived from your own measured wattages and hours rather than a generic benchmark.

Should a business include installation costs in the LED unit cost?

Yes, if the retrofit needs more than a lamp swap. Like-for-like retrofit lamps in existing GU10 or bayonet fittings are usually a self-install, so the lamp price alone is fair. If the project involves replacing whole fittings, rewiring, removing transformers for 12 V halogen systems, or hiring access equipment for high bays, spread those costs across the lamp count and add them to the unit cost field so the payback reflects the full project spend.

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The conversions that procurement and engineering use alongside this one.

LED Payback Calculator | Purely Energy