Efficiency of the light source, expressed as "efficacy", is the rate at which a lamp is able to convert electrical power (Watts) into light (Lumens), measured in terms of lumens per watt (LPW). Put simply, a watt or electricity is the amount of power in, and a lumen or light is the amount of power out. Life, normally expressed as "average life", is the time at which 50% of the lamps in the original installation are still operating. Basically, 50% of the lamps will reach and exceed their "average life" rating, while the other 50% will not.

Lighting represents 30% to 50% of the total operating cost of a typical installation. Energy (electricity) accounts for 88% of the cost of an average lighting investment and has a major impact on the overall operating costs. Maintenance and the actual lamps themselves only account for 12%. With this in mind, it becomes very apparent that efficacy is far more important than life when evaluating a lamp. A longer life lamp really only compliments a lamp's features unless it is being installed in hard to reach areas.