A capacitor is a bit like a battery, but it has a different job to do. A battery uses chemicals to store electrical energy and release it very slowly through a circuit; sometimes (in the case of a quartz watch) it can take several years. A capacitor generally releases its energy much more rapidly—often in seconds or less. If you're taking a flash photograph, for example, you need your camera to produce a huge burst of light in a fraction of a second. A capacitor attached to the flash gun charges up for a few seconds using energy from your camera's batteries. (It takes time to charge a capacitor and that's why you typically have to wait a little while.) Once the capacitor is fully charged, it can release all that energy in an instant through the xenon flash bulb.
An LED lamp will generate a large amount of heat, like any other lighting circuit (about 80% of the output from the power supply is lost as heat). The problem is that the LED lamp is located very close to the power supply. Therefore, the power supply itself sees the equivalent of its full rated output power (its own dissipation plus 80% of the output power) being dissipated as heat in its proximity.
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