My website is running super slow on Amazon LightSail 1 GB RAM 2 vCPUs 40 GB SSD instance but working decent on 8 GB RAM, 2 vCPUs, 160 GB SSD

The performance difference you're experiencing between the two instances is likely due to several factors, with memory being a key component. While the CPU performance might appear similar, the significant difference in RAM (1 GB vs 8 GB) is probably the main reason for the improved functionality on the larger instance.

Lightsail instances use burstable performance, which means they provide a baseline level of CPU performance with the ability to burst above that baseline when needed. However, the amount of available memory can greatly impact overall performance, especially for WordPress sites that often require more RAM to handle multiple processes, plugins, and database operations.

The 1 GB RAM instance is likely insufficient for running WordPress efficiently, especially if your site has many plugins, a large database, or receives significant traffic. WordPress typically requires at least 2 GB of RAM for smooth operation, and more is often better.

To address this issue, you could:

1. Stick with the 8 GB RAM instance if it's providing satisfactory performance. This seems to be a good fit for your current needs.

2. Consider using Lightsail's load balancing feature to optimize your WordPress site and accommodate traffic variations. This can help distribute the workload and improve overall performance.

3. Implement caching solutions and optimize your WordPress site to reduce resource usage. This might allow you to use a slightly smaller instance while still maintaining good performance.

4. Monitor your instance metrics closely using Lightsail's built-in tools. Pay attention to CPU utilization, especially in the "burstable" zone, to ensure you're not consistently maxing out your resources.

5. If you find that even the 8 GB instance struggles during peak times, you might need to consider upgrading to a more powerful plan or exploring other AWS services like EC2 for more customizable options.

Remember, WordPress sites can be resource-intensive, and choosing the right instance size is crucial for optimal performance. It's often better to have some headroom in your resources to handle traffic spikes and future growth.

Sources
Instances - Amazon Lightsail
View CPU burst capacity accrual for Lightsail instances - Amazon Lightsail
Community | Load Testing Wordpress Amazon Lightsail Instances