Industrial LED Lighting Gains Momentum

 

LED lighting in an industrial location (source, Greenbiz.com, http://bit.ly/YZFMbE)

IDC Energy Insights reports that the industrial market for LEDs is picking up momentum as companies looking to build new “smart” facilities or retrofit old ones choose energy efficient LED lighting.  Adoption of LEDs for industrial lighting is good news for the commercial sapphire market and others in the LED supply chain. More LED lighting means more demand for sapphire.

First, let’s start with some background.  Warehouses are particularly fertile ground for LED lighting since instant-on LED lights provide virtually no cycle time compared to traditional industrial lighting sources like HID (high-intensity discharge lamps) along with lower lifetime costs (including maintenance), higher efficacy and local utility incentives among others.

For those who watched the recent Super Bowl in New Orleans, the HID lights may be familiar.   After the electricity loss during the second half, the lengthy delay in the game – more than 20 minutes — was partially due to the cycle time of the HID lighting for the interior of the stadium.  In a warehouse situation, HID cycle time becomes a big issue as no one wants to wait for the lights to cycle and as a result, many warehouses just keep the lights on, running up energy costs.

IDC Energy Insights research analyst Casey Talon commented in her clean energy blog that LED lighting and “smart building” will be the disruptive technology for energy efficiency over the next three years.

Talon highlighted two big announcements in early January 2013 that demonstrate the momentum of smart building with LED lighting.  First, lighting leader Acuity Brands acquired Adura Technologies.  Adura’s Zigbee wireless mesh architecture enables individual fixture controls for cost and energy savings.  Secondly, Digital Lumens, a leader in the industrial lighting solutions market, announced new growth numbers and funding, that demonstrates the viability of the emerging smart building technology segment.  The company secured a new round of $10 million in financing and reported a footprint of 500 ‘large-scale’ installations representing 150% growth.

She notes in the blog that “fundamentally this news demonstrates that end users are increasingly aware of the benefits of energy efficiency to both their bottom lines and corporate goals.  The activity in these markets illustrates a growing acceptance of upfront costs to achieve longer term benefits.”

LED lighting combined with lighting control and management software offers the ability to track and manage the benefits of LED lighting.  Wireless controls and analytics help building managers understand when to have lighting on or off when employees are present, measure “free” ambient light from outside to cut down reliance on lighting, and know when and where to adjust brightness in areas when high precision work is needed.

Using analytics already is paying off.  According to one case study from Digital Lumens, Vector Aerospace Helicopter Services North America, a worldwide leader in helicopter maintenance, repair and overhaul for Sikorsky, Eurocopter, AgustaWestland and Boeing helicopters, saved more than 72% on their annual energy costs with a Digital Lumens retrofit.

According to Talon, “If these early announcements are a signal, then 2013 may mark a tipping point in the smart buildings marketplace as customer awareness and investment begin to converge for broader adoption of intelligent energy management solutions.”

Further Reading

IDC Energy Insights, Illuminating the Smart Building, https://idc-insights-community.com/energy/clean-energy/illuminatingthesmartbuilding

Greenbiz.com, LED lighting gaining traction in commercial retrofits, http://www.greenbiz.com/news/2013/02/05/led-lighting-gaining-traction-commercial-retrofits

LED Lighting Growth Update

This week, LED lighting market research firm Strategies Unlimited announced some very positive research about LED lighting as well as the LED industry as a whole.  Strategies Unlimited measured the LED component revenue for lighting applications and noted that it reached $3.11 billion in 2012, just beating out the large area display backlight segment at $3.06 billion for top LED application.

This is good news for sapphire, as the substrate for more than 80 percent of the world’s LEDs. The more demand for LEDs and LED lighting, the greater demand for sapphire. Examining lighting further, Strategies Unlimited said that the total illumination market for 2012 is estimated at $14.52 billion.  LED lighting, including LED replacement lamps and luminaires, is estimated at $11.72 billion—an increase of 26% between 2011 and 2012—and it is forecast to grow at a CAGR of 12% over 2012-2017.

Another interesting area of growth is the automotive market.  Beyond the Audi A8s with their signature eyebrow LED headlights, LEDs are catching on with other auto makers.  Strategies Unlimited puts the total market for LEDs in the automotive segment at $1.4 billion in 2012 and estimates that it will grow to $2.1 billion in 2017. Where’s the growth?  The firm says the number of cars with LED headlights nearly doubled in 2012.  LED daytime running lights also contributed to the growth.

Here’s a look at how LED applications break out according to Strategies Unlimited:

Strategies Unlimited, Worldwide LED Revenue Forecast by Market Segment (Source: Solid State Technology)

 

 

 

 

 

 

Further Reading

Strategies Unlimited, WORLDWIDE LED COMPONENT MARKET GROWS 9% WITH LIGHTING RANKING FIRST AMONG ALL APPLICATION SEGMENTS,ACCORDING TO STRATEGIES UNLIMITED, http://www.strategies-u.com/articles/2013/02/worldwide-led-component-market-grew-9–to–13-7-billion-with-lig.html

Solid State Technology, Worldwide LED component market grows 9% with lighting, http://www.electroiq.com/articles/sst/2013/02/worldwide-led-component-market-grows-9-percent-with-lighting-.html?cmpid=EnlLedFebruary132013

 

 

 

 

LED Light Bulbs Grow in Popularity

Philips 12.5W LED A19 bulb on sale on Homedepot.com for $22.97 US.

A big part of the market opportunity for sapphire is LED lighting.  When the LED lighting market grows, the demand for sapphire, one of the main building blocks for LED chips will increase too.  We’ve been tracking the LED lighting market and take a look at a recent report by Diane Cardwell in The New York Times, LEDs Emerge as a Popular ‘Green’ Lighting.

Cardwell examined the growth in popularity of LED lighting in the piece.  Cardwell notes that the energy-efficient replacement LED bulbs are popular with consumers despite being more expensive than traditional incandescent bulbs.  She also looked at the marketing success of LED lighting at retailers like Home Depot and technological improvements by manufacturers like Philips.

Cardwell reported that the growth of LED sales outpaced other lighting technologies in the residential market even though the market share still is small at 3 percent.  She attributes the growth to price decreases and the appeal of saving money on energy to consumers.

Brad Paulsen, from mega home retailer Home Depot, told Cardwell that he anticipates that LED technology will become the most popular lighting technology that is out there.  Home Depot has been selling LED light bulbs since 2009 according to information Bill Hamilton from Home Depot shared at a Department of Energy, 2012 Solid-State Lighting Market Introduction Workshop.  The retailer now sells 104 options online and in-store.  Consumers are seeing healthy price decreases.  For example, a Philips 12.5W LED A19 bulb (a 60W equivalent) decreased in price 37% to $24.97 between 2011 and 2012 at Home Depot and now sells on the Home Depot website for $22.97.

The Times article highlighted some interesting market statistics about LED lighting.  A-type LEDs, the most common bulb size that fits in home light sockets, will outsell incandescent bulbs in North America in 2014, according to market research firm IMS Research.  The firm also maintains that LEDs will become the most popular A-type technology by 2016 with North American shipments reaching almost 370 million, more than 10 times the roughly 33 million shipped last year.

Light bulb manufacturers are seeing LED lighting growth as well.  Cardwell noted that Philips, a major manufacturer of light bulbs in the US, saw LED light bulbs contribute to 24 percent of lighting sales in 2012. Overall LED-based sales grew by 51%, and now account for 24% of total lighting sales for Philips in Q3 2012. Philips took in over EUR 500 million, that’s around $650 million in US dollars, in LED-based sales for the third quarter.  That’s a lot of LEDs.

For Further Reading

Bill Hamilton, Home Depot presentation, Department of Energy, 2012 Solid-State Lighting Market Introduction Workshop, http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/hamilton_trends_pittsburgh2012.pdf

New York Times, LEDs Emerge as a Popular ‘Green’ Lighting, http://www.nytimes.com/2013/01/22/business/leds-emerge-as-a-popular-green-lighting.html?_r=0