LED Recessed Lighting ROI: How Much Can You Actually Save?

Bottom line upfront: A typical Chicago home with 8 LED recessed lights in the kitchen will save approximately $96 per year on ComEd bills compared to incandescent bulbs. With installation costs around $1,700, the payback period is less than 2 years. After that, you pocket the savings—roughly $2,400 over 25 years per room.

Let's break down the exact numbers so you can calculate your own savings.

The Real Cost of Operating Recessed Lights in Chicago

As of 2025, ComEd residential electricity rates in the Chicago area average approximately $0.15 per kilowatt-hour (kWh). This includes delivery charges and supply costs.

Here's what that means for your light bulbs:

Energy Consumption Comparison: LED vs. Incandescent

Light Type	Wattage	Cost per Hour	Cost per Year*
Incandescent (65W)	65W	$0.00975	$17.80
LED (10W)	10W	$0.0015	$2.74
Annual Savings Per Bulb	—	—	$15.06

* Based on 5 hours of daily use at $0.15 per kWh

Real-World Savings by Room

Let's calculate actual savings for common Chicago home lighting scenarios:

Kitchen (8 Lights)

• Installation Cost: $1,700 (includes all labor, materials, patching, painting)
• Annual Energy Savings: $120.48 (8 lights × $15.06)
• Payback Period: 14 months
• 25-Year Savings: $3,012

Living Room (12 Lights)

• Installation Cost: $2,700
• Annual Energy Savings: $180.72
• Payback Period: 15 months
• 25-Year Savings: $4,518

Basement (16 Lights)

• Installation Cost: $3,500
• Annual Energy Savings: $240.96
• Payback Period: 17 months
• 25-Year Savings: $6,024

Whole Home (40 Lights Across Multiple Rooms)

• Installation Cost: $7,200 (with 10% multi-room discount)
• Annual Energy Savings: $602.40
• Payback Period: 12 months
• 25-Year Savings: $15,060

Hidden Savings: Beyond Electricity Costs

Energy savings are just part of the story. LED recessed lights provide additional financial benefits:

1. Bulb Replacement Costs

Incandescent bulbs last approximately 1,000 hours. LED recessed lights last 25,000-50,000 hours.

For 8 kitchen lights over 25 years:

• Incandescent bulbs needed: ~365 bulbs (assuming 5 hours/day)
• Cost at $2/bulb: $730
• LED bulbs needed: 0 (fixtures last 25+ years)
• Additional Savings: $730

2. Cooling Cost Reduction

Incandescent bulbs waste 90% of their energy as heat. In Chicago summers, this heat forces your AC to work harder.

For 8 kitchen lights:

• Heat reduction: ~440 watts (8 lights × 55W difference)
• Summer AC savings (June-Sept): ~$25/year
• 25-Year Savings: $625

3. Home Value Increase

LED recessed lighting is a selling feature for Chicago homes. Real estate agents report that homes with professional lighting upgrades sell 4-7% faster and can command slightly higher prices.

Total 25-Year ROI: Kitchen Example

Interactive Savings Calculator

Case Study: Real Chicago Home

Naperville Homeowner - 3-Room Installation (24 Lights)

"We installed LED recessed lights in our kitchen, living room, and master bedroom in January 2023. Our ComEd bill dropped by an average of $18/month immediately. Over the past two years, we've saved over $400 in electricity costs alone. The lights look fantastic, and knowing they'll last 25+ years means we'll never have to replace a bulb again. Best home improvement we've made."

— Jennifer M., Naperville

Frequently Asked Questions

Do LED lights really save that much money?

Yes. LED recessed lights use 85% less electricity than incandescent bulbs. A single LED recessed light costs about $2.74/year to operate vs. $17.80/year for incandescent—a savings of $15.06 per bulb annually.

What about the higher upfront cost of LEDs?

LED fixtures do cost more initially, but the payback period is 12-18 months for most installations. After that, you're saving money every single month for the next 20+ years.

Will ComEd rates increase over time?

Historically, electricity rates increase 2-3% annually. Our calculations use today's rates, which means your actual savings will likely be higher as rates increase over the next 25 years.

Can I install LED bulbs in my existing recessed lights instead?

Yes, but you won't get the same quality or longevity. Retrofit LED bulbs in old fixtures can have heat issues, shorter lifespans, and inconsistent light quality. Purpose-built LED recessed fixtures are designed for optimal performance and maximum lifespan.

The Bottom Line

LED recessed lighting is one of the few home improvements that literally pays for itself. With a payback period of 12-18 months and 25+ years of savings ahead, it's a financially smart decision for Chicago homeowners.

Key Takeaways:

• ✓ LED recessed lights save $15+ per bulb per year on energy costs
• ✓ Typical 8-light kitchen installation pays for itself in under 2 years
• ✓ 25-year savings exceed $2,500 per room (including replacement costs)
• ✓ Additional benefits include reduced AC costs and improved home value
• ✓ Zero maintenance for 25+ years (no bulb changes)