Luminous efficacy indicates how much light a lamp generates from the energy consumed. It is thus the measure of an artificial light source's efficiency. Luminous efficacy is the ratio of luminous flux (in lumens, lm) to power consumption (in watts, W). The higher the ratio of lumens to watts, the more energy-efficient the lamp is.

Conventional incandescent lamps convert only around five percent of the electricity consumed into light; the rest is dissipated in the form of heat. Halogen lamps are more efficient light producers. The best luminous efficacy ratings are achieved by discharge lamps. Other light sources have a more favourable performance balance: linear fluorescent lamps achieve over 100 lm/W (16 mm diameter lamp with EB/system luminous efficacy).