For example, a common household incandescent light bulb uses 60W of power.  If you left this light bulb on for 3 hours a day for a year, it would use 65.7 Kilowatt hours: $Total\ Energy = Power * Time$ $Total\ Energy = 60 W * {3\ h \over day} * {365\ days \over year}$ $Total\ Energy = {65,700\ Wh \over year} = {65.7 kWh \over year}$ Since Thomas Edison invented the incandescent bulb in 1879, however, there have been some improvements to the technology.  The latest is the bulb.  An LED bulb can create the same as an old incandescent light bulb using much less power.  For example, an LED replacement for a 60W incandescent bulb would typically use only 9W.  This creates a savings of 51W per bulb.
For example, let’s look at an average rate of $0.10 per kWh. Again, let’s assume a bulb we use for 3 hours a day. Therefore, reducing the power of that bulb from 60W to 9W leads to a savings of: $Annual\ Savings = (Old\ Watts\ – New\ Watts) * {hours \over year} * {1\ kW \over 1,000\ W} * Energy\ cost$ $Annual\ Savings = (60W\ –\ 9W) * {3\ h \over day} * {365\ days \over year} * {1\ kW \over 1,000\ W} * {0.10 \over kWh}$ $Annual\ Savings = {5.10 \over year}$ In this example, if the new bulb costs less than$5.10, we’d make the money back in less than a year.  If your energy rate is higher, the payback will be quicker.  Bulbs in locations that are used more often are more obvious candidates for replacement.