At what cost per kilowatt-hour does make sense to replace

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Question: Compact fluorescent lamps (CFLs) have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent lightbulb costs $.41 and lasts for 1,000 hours. A 15-watt CFL, which provides the same light, costs $3.20 and lasts for 12,000 hours. A kilowatt-hour is 1,000 watts for 1 hour. Suppose you have a residence with a lot of incandescent bulbs that are used on average 500 hours a year. The average bulb will be about halfway through its life, so it will have 500 hours remaining (and you can't tell which bulbs are older or newer). If you require a 9 percent return, at what cost per kilowatt-hour does it make sense to replace your incandescent bulbs today?

Reference no: EM131956666

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