Compute energy efficiency as a percentage and identify wasted energy, usually as heat.
No real machine converts all its input energy into useful output -- some is always lost, almost always as heat. Efficiency = (useful energy out / total energy in) x 100. A perfectly efficient machine would be 100 percent, but no real machine reaches that.
An incandescent bulb might take in 60 J and produce only about 6 J of light, wasting 54 J as heat -- about 10 percent efficient. An LED doing the same job might produce 48 J of light from the same 60 J -- about 80 percent efficient, which is why LEDs stay cooler.
Mastery looks like: They compute efficiency, useful output, or total input given the other two values, and explain that wasted energy is usually heat.
Common stumbles: Forgetting to multiply by 100 for a percentage; dividing input by output instead of output by input.