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When Jason Chroman relocated from San Francisco to the suburbs, he and his family moved into a bigger, newer house. It was all very exciting until their first electric bill arrived.

"The house was maybe 30 percent bigger, but the electric bill was something like 200 percent more," Chroman said. So he started looking to see what could be using so much power. He found the answer when he looked up: most of the lights were incandescent.

Chroman is the vice president of finance at a Silicon Valley startup called Tubular Labs, so he put his money skills to work. The question: Since LED light bulbs cost more but use less energy, how soon would they pay for themselves? He found that because of California's high energy prices, he could recoup his costs in less than two months.

"When I figured out the economics of each bulb, I upgraded all the bulbs in the house," Chroman said. "It cost me a bundle, but my power bill went down by about half."

Chroman's home is big and his power rate high, but the numbers are compelling even for an average home, which uses 40 light bulbs. The average rate for electricity is 13 cents per kilowatt hour. If all 40 light bulbs were 75 watt incandescent, which is pretty typical, you could convert to 11 watt LEDs to get the same amount of light.

If you leave all 40 lights on five hours a day, homeowners would save $600 a year by switching bulbs from incandescent to LED.

But what about the cost of the bulbs themselves? When LEDs came on the market, there was serious sticker shock. But I found plenty of LED bulbs available online for $5 apiece. Let's say the difference in cost between a basic LED and an incandescent bulb is $4. According to the math above, the monthly usage savings for a single bulb is $1.25. So most people will be able to recoup the cost of a new LED bulb in just over three months.

LEDs can save not only money but time, with fewer trips to the store and up the ladder, since they last about 25,000 hours. That's more than 13 years, if you keep your lights on five hours a day. Incandescent bulbs last just 1,200 hours; compact fluorescents, 8,000 hours.

Color: Early LEDs often shed a cold, bright-white light. Newer LED bulbs are branded as "soft white" or "warm white" and glow like old-fashioned incandescents. Look for a color temperature of 2,700 Kelvin.

Shape: LED bulbs are now available for almost any purpose. Regular bulbs and spotlight-style bulbs, chandelier-shaped bulbs, three-way bulbs and even Christmas lights are on the market.

Dimming: Many LED bulbs are dimmable, unlike compact fluorescent light bulbs (CFLs), the vast majority of which still are not dimmable.

Quality: Not all LEDs are created equal. Look for the Energy Star label, which means they meet standards for brightness, color quality, efficiency, steadiness and immediate lighting.