Tipping Point: Earth Day, 100W Light Bulb Reprieve and Alexander Hamilton

Last weekend, the world marked the 42nd anniversary of Earth Day and the world continues to look for ways to save energy and live a little bit greener every day.  LED lighting has been capturing a lot of mindshare as the next best energy-saving light source on the horizon since mercury-containing CFLs have lost favor. While the LED lighting market continues to build slowly, industry observers are keeping a keen eye on when it will explode.  Alexander Hamilton may have the answer.

In 2007, US legislators imposed strict energy efficient guidelines impacting 100W incandescent light bulbs.  The first set of regulations were set to hit in 2012, in effect banning traditional 100W light bulbs.  The “ban” was thought to help the LED lighting industry.  But, the 100W light bulb got a reprieve in December 2011 from Congress. In the midst of the holiday hustle and bustle, there was a little agreement inside of the massive 1,200-page spending package that took the teeth out of enforcing the incandescent light bulb ban. Incandescent bulbs were off the hook, temporarily.

Without the US government regulations spurring LED lighting adoption, it is anyone’s guess as to when consumer LED lighting will take off.   IMS analyst Jamie Fox recently wrote a post about LED lighting and the tipping point for consumer LED lighting adoption.  According to Fox, the residential market LED lighting is not quite ready to explode in 2012, but it is starting to get tantalizingly close.  Fox noted that residential LED lighting is the “holy grail” for LED manufacturers “who once saw it merely as a speck on the far horizon, but now can finally enjoy it coming squarely into view. If this market starts to suddenly move, then the whole market for LED general lighting, indeed the whole LED market, will really start to see growth rates increase, even surge.”

Fox and his associates at IMS calculate that LED light bulb prices need to fall to single digits before the market explodes.  Fox explained in his blog post, “It’s not just the psychological impact (i.e. $9.99 vs. $10.00); it also just happens that this is around the point where the payback arguments make sense. Factoring in energy costs, a $25 LED pays for itself relative to a $0.55 60W incandescent lamp in approximately 34 months assuming 4 hours of use per day and energy costs of $0.11 kWh.”  He continued that at $10 (Alexander Hamilton is on the $10 bill) or less, the payback period shrinks to a single year.

When this will happen is anyone’s guess, but Fox insists that the $10 mark will be good news for LED manufacturers.  He continued, “this translates into double digit growth for their whole LED business in 2013 and 2014.”

There is progress on pricing declines.  Market researchers at LEDinside indicate that they are seeing price drops in the vicinity of the $10 mark in South Korea, UK, Japan and United States due to competition and improvements in technology.  According to LEDinside, the 40W equivalent LED bulb’s prices in North America and the UK have been sliding toward US$10. The lowest prices in most areas are expected to fall below US$10 in 2H12.

Facts & Figures:

According to the US Department of Energy, artificial lighting consumes about 10% of a household’s electricity use.  The DOE says use of new lighting technologies can reduce lighting energy use in homes by 50%–75%. Upgrading 15 of the inefficient incandescent light bulbs in your home could save you about $50 per year. This could add up because the DoE says there is more lighting than ever in the US. The DoE attributes the vast majority of the growth to the residential sector, primarily due to the increase in number of households and the rise in the number of sockets per household, from 43 in 2001 to 51 in 2010.

For Further Reading …

IMS LED Blog, Doe LED Lighting Have a Tipping Point?, http://www.ledmarketresearch.com/blog/Does_LED_Lighting_Have_A_Tipping_Point_270

LEDinside.com, LED Bulb Price Dipped Sharply in 12’Jan, 40W Equivalent LED Bulb Price Dropped below US$10, http://www.ledinside.com/price_bulb_201201

USA Today, Congress’ bill may slow switch to efficient light bulbs, http://www.energysavers.gov/your_home/lighting_daylighting/index.cfm/mytopic=11985

LEDs Magazine, US Congress is poised to weaken light-bulb efficiency legislation, http://www.ledsmagazine.com/news/8/12/18

The Washington Times, Congress overturns incandescent light bulb ban, http://www.washingtontimes.com/news/2011/dec/16/congress-overturns-incandescent-light-bulb-ban/

This entry was posted in Earth Day, LED light bulb, Solid State Lighting, US DOE and tagged , , , by Beth. Bookmark the permalink.

About Beth

It seems like LEDs are in everything these days – backlighting everything from your mobile phone, Apple iPad and flat screen HDTV to traffic lights, light bulbs and even the kitchen sink. But, making LEDs is a complex process that begins with the creation of sapphire. Not the pretty blue gemstone, but large commercial crystals that can weigh as much as 400 lbs. Once these large sapphire crystals are grown into boules and cooled, they’re cut into cores, cut further into flat circular wafers, polished and then used to grow LEDs. About 85 percent of HB-LEDs (high brightness) are grown on sapphire. There’s not that much information out there about the process. This blog is meant to shed some light (excuse the pun) on sapphire, LEDs and the industry that is devoted to making our lives just a little brighter. In the months ahead, we’ll tackle some topics that will help you understand a little more about sapphire and LED industry. Here’s a sample of what we’ll cover in the coming months: • Growing sapphire • For a wafer, size matters • Quality - When sapphire wafers go bad • LED light bulbs • Market & myths • Interviews with industry shining stars • Reports from industry events • Current events in perspective Please join us each week to learn more about sapphire and the LED market. We look forward to seeing you.

2 thoughts on “Tipping Point: Earth Day, 100W Light Bulb Reprieve and Alexander Hamilton

  1. Pingback: LED Lighting Update: 100W Incandescent Bulbs Gain LED Competition | clearlysapphire

  2. Pingback: Tipping Point 2: Finally, A Sub $10 LED Light Bulb | clearlysapphire