How far out do you calculate ROI?

[SteveinMN]

About a month ago, DW said she wanted a better reading lamp. I scouted craigslist and found a beautiful lamp that supplied about twice the light DW had for reading. Score! Everybody's happy. She likes the light and I like to look at it and it was about 1/20 of the price of that same lamp new.

The lamp uses eight incandescent bulbs. As we've used the lamp, a couple of the bulbs have burned out, apparently traumatized by their crosstown trip in the back of a station wagon. Even if we had to buy another eight, though, incandescent bulbs are dirt cheap. To buy, not to operate.

I looked at buying LED replacement bulbs. A set of eight bulbs which will provide an equivalent amount of light will run about $150. At first I said, no way that's going to happen. But then I ran the numbers and found that -- based on current electricity prices and an estimated usage of four hours a day (more on weekends; fewer in summer) and including the cost of the bulbs (including replacement incandescents at their rated life) -- the reduced energy use of LEDs will pay us back in 3.5 years. We're quite likely to have this lamp at least that long. Suddenly it pays to do this -- assuming the household budget can handle the outlay.

But that got me thinking about other times I've paid more up front to save money later. I don't always do it. I'm wondering where others put that ROI line. Does it depend on the item? Do you only figure it for big-ticket items? Have you ever gone back and run the numbers to verify your payback period?

[catherine]

I was just thinking about that. I just got out of the shower after washing my hair and reached for my Redken Smooth Down Heat Glide. I don't use "conditioner" anymore because I think it's a scam (use shampoo to strip the natural oils out of your hair and then replace them with another product.).

However, my Redken product is used after I wash my hair prior to blowing it out. I bought it in a Burlington VT salon two YEARS ago!!! I use it regularly. You only need a teeny bit, and my hair is shiny and smooth. And the product was under $20. That's good ROI.

That's my example. Calculate the ROI on $20 divided by two years' worth of hair washings. Not bad.

[fidgiegirl]

The LEDs would be $150? We got a pack of 3 at Costco for $18. Maybe they don't have the equivalent light output to what the incandescents were putting out.

I don't really calculate ROI on much stuff, well, not officially. The only time we decided something wasn't worth it on the basis of initial cost v. payback was a tankless water heater. It would have taken so long to recoup the initial costs that we decided to pass on it.

[SteveinMN]

Yeah, I was (figuratively) shocked when I totaled it up, too. But the replacements must have a candelabra base and be dimmable; both of which drive up the price. Some LED bulbs do not produce light omnidirectionally; they broadcast it in a narrower arc. I might be able to get by with them if I know that when I tighten the bulbs in their sockets, they'll be oriented properly. But I'm not sure I can count on that. So there's a cost to that. And I'm noticing that even though the LED bulbs are called "40-watt" equivalents, they are not really because they do not put out as many lumens as typical 40-watt candelabra-base incandescents do. So I have to bump up a "size" in bulbs. Now we're up to $17-18 a bulb, times 8. I might be able to get them a bit cheaper if I go with some Web vendor I've never dealt with before or maybe gamble on the narrow-arc bulbs.

It has occurred to me that the money we saved on this lamp is going into bulbs. Or could. I'm of a mixed mind on that. It's a really nice lamp -- it fits into the decor quite nicely. A slightly-updated version of this lamp still sells for $400-600 depending on where you buy it; we got this one for $30. I'm not sure I would have spent even $150-200 on any lamp that addressed DW's wishes. But it's here and life isn't just about buying the cheapest thing you can find. We'll look at this and use it pretty much every day.

The weird thing is, if I bought another $8 in incandescent bulbs, we'd spend the difference in electricity month by month and barely notice.

[ToomuchStuff]

I've got a bug about the whole light bulb thing, personally. I don't normally do the ROI thing on small stuff, and light bulbs I consider small stuff. My problem with the light bulb thing, is they pushed for CFL's with no consideration for those who did early adoption of use what you need, by putting in dimmers (almost every room of the house).
LED bulbs have potential, and I bought my first one the other day, to test it. Reading the partial directions (can't believe that is needed for a light bulb), is a PITA, since they are not all on the package (there is a list of dimmers that they will and won't work with). Directionality is a big problem with so many of them. And lastly, much to my surprise and bewilderment, they say do not use in an enclosed fixture??? Uhm, define enclosed, as so many fixtures completely contain the bulb with a globe? There are just too many situations, where CFL's don't work well, that I deal with, such as workshops/garages, with sharp objects or things that could fall on you, security lighting (that should always be instant on and full illumination), etc. And the quality of so many incandescent bulbs has gone WAY down.

[SteveinMN]

I remember when CFLs were The Next Big Thing. And I remember the CFLs which didn't reach full brightness for a minute or so (not bad for a bedside lamp; a PitA for a kitchen light). The CFLs which could not be used in a lamp which placed the shade/harp on the bulb. The CFLs which were not to be used in enclosed fixtures or upside-down or outside (that is, all of them). The generally-horrible color rendition which turned beautiful objects into muddy masses of color (and, yes, I'm anal enough to hate when one bulb out of four in a fixture is a different shade of white). LEDs seem to be where CFLs were then.

I had no problem spending another 10% on my car to get the diesel engine that almost doubled my fuel mileage. Over hundreds of thousands of miles, getting 45-50 mpg instead of 25-30 gets paid back with interest. Ditto with the dishwasher and washing machine, to use less (hot) water and detergent. But given the state of LEDs today and the likelihood that the significant investment now may not turn out to be a happy one, I think I'll just pick up a few more incandescent bulbs when I next get to Target or the hardware store. Maybe in a couple of years (or when these bulbs are outlawed) I'll revisit it.

[kib]

I am somewhat leery of ROI, primarily because I think there's a big potential on the part of marketing to promise things that don't come true with products that have no track record yet. I was never going to have to replace that $17 CFL bulb in my lifetime! Except that the conditions apparently weren't ideal, and four months later I was out $17. (maybe that was just my prayers coming true, begging the universe to deliver me guilt-free from a life of flickering gray green depression.)

I have been replacing with LEDs as I go and have to say I'm impressed so far. The prices are coming down - check the big box home improvement stores for sales, I paid $11 each for 800 lumen bulbs that I'm very pleased with. Hopefully they last as many years as promised and this isn't Charlie Brown and the football all over again.

eta: Steve, do those saucers turn on individually? Maybe you could just replace two at a time in the ones you use the most.

[SteveinMN]

eta: Steve, do those saucers turn on individually? Maybe you could just replace two at a time in the ones you use the most.

They don't switch on independently. I'd even be ahead if they weren't dimmable, because that would make it simpler (cheaper) to buy bulbs. I've concluded this lamp is the Maserati of lamps: beautiful to look at, but not necessarily cheap to maintain. I can't yet bring myself to replace it with something more efficient, though.

I even thought of maybe going with LED bulbs for other frequently-used fixtures (the "carbon-offset" model), but all of our most-frequently-used fixtures are already CFLs or poor candidates for an LED bulb. All this is further compounded by the fact that even though I've lived in this house for 11 years, there are some incandescent bulbs I've not yet had to replace.

[pcooley]

I haven't read through the entire thread -- my family is putting on shoes to go out -- but I love our LED bulbs. It's not so much ROI for me. The incandescent is just more emblematic of wasted energy to me. That they do save money over the long run makes my compulsion to buy them seem OK. We're slowly replacing our CFLs as they slowly burn out. Thirty bucks a bulb every few months doesn't seem too bad. I wouldn't do the whole house all at once.

[reader99]

My outer limit is the lesser of my expected life or the expected life of the item. That's the outer limit; for some things I would go shorter. I nixed replacing the windows in my condo because the payback period seemed like it would exceed my lifetime. I will eventually replace the air conditioning system because it will probably crap out before I do so I'll have to.

Reviews I've read on Amazon of CFL bulbs indicate that their vaunted long life is often not true. Reviews indicated they last longest in plain fixtures where they will be on for a long time. They don't seem to last well where there is vibration, like a garage door or ceiling fan and they don't do well in recessed fixtures or things on a dimmer, even if you don't use the dimmer feature.