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Explosive Growth for LED Lights in Next Decade, Report Says

Next-generation bulbs to capture nearly 50% of lighting market by 2020

By Amy Westervelt

May 13, 2010

A new report finds that the market for light-emitting diodes (LEDs) is set to explode in the next ten years, surpassing even compact fluorescent lightbulbs as the ultimate energy-efficient lighting option.

By 2020, LEDs will cover 46 percent of the $4.4 billion U.S. market for lamps in the commercial, industrial and outdoor stationary sectors, driven by the overall push toward energy efficiency, according to a released this week by Pike Research, a Boulder, Colo. cleantech market-research firm.  That's a big jump, considering that LEDs now capture only two percent of the lighting market, according to .

"As energy efficiency becomes increasingly important for controlling costs, improving energy independence, and reducing environmental impacts, governments and organizations have looked to lighting as the 'low hanging fruit' of energy efficiency," the study states.

Currently, lighting accounts for 17.5 percent of the world's electricity consumption, and $40 billion of the electricity bill in the United States, which makes it full of potential for energy and cost savings. While fluorescents have been justly praised for offering greater efficiency than incandescent bulbs, LEDs have been shown to be more efficient and to last longer than any other lighting source on the market, making them the logical next step.

LED lightbulbs typically last 50,000 hours — twice as long as fluorescents — and are up to twice as efficient as fluorescents, which are four to six times more efficient than incandescents. Further, unlike fluorescent or incandescent bulbs, LED tubes do not get especially hot. 

According to a 2009 released by market research group GigaOmPro, incandescent bulbs only convert about 4 to 6 percent of the energy they receive into light; the rest is wasted as heat. While fluorescent bulbs can raise the temperature in a room by up to two degrees, resulting in increased cooling load for buildings, LEDs don't raise the temperature at all.

"Growth rates [for LEDs] have been in the double digits and we don't anticipate growth to slow,," writes analyst Katherine Austin in the GigaOm report.

"With a new administration in the U.S. White House, a new energy secretary, and a new focus on energy efficiency, market conditions for are very likely to remain positive. Other countries, especially China, Korea and Japan, share this focus. By 2012, the market for LEDs in general lighting applications could climb as high as $10 billion, although in light of the recent economic downturn, we expect that $4-5 billion may be more realistic."

In addition to their high efficiency and long lifespan, LEDs also do not require ballast and do not contain toxic mercury, which means disposing of them when they die poses fewer health and environmental hazards.

LEDs are also favored by the Department of Energy, which has been in advancing the technology over the last ten years. The European Union is currently phasing out the use of incandescent bulbs, which the U.S. will do in 2012, leaving only fluorescents and LEDs left as the lighting options.

Cost is Chief Barrier

Despite the positive forecast, there remain short-term financial and technological obstacles to market success for LEDs, with the biggest problem being price.

LED tubes cost anywhere from $50 to $100, compared to $2 to $10 for fluorescents. The other roadblock frequently cited by electrical engineers and facilities managers is brightness; they are concerned occupants will complain that the lights are not bright enough. Both problems are being addressed by LED manufacturers, which are researching ways to increase the luminance of LEDs and cut costs.

In 2008, for instance, researchers at Purdue University to replace the expensive standard substrate used in LED production — sapphire — with low-cost, metal-coated silicon wafers. The switch would greatly reduce the cost of LED manufacturing, assuming another silicon shortage does not come along.

Even without a cost breakthrough, though, reports suggest that paying more for LEDs would be worth it. In a recent LED-to-fluorescent comparison, Greentech Media found that while LEDs are clearly more expensive at first, they are far more cost-effective in the long run.

Comparing an installation of 40 LEDs and 40 fluorescent tubes, the report found that in the first year it would cost $3,069 for the energy and initial purchase of LEDs, while the fluorescent tubes would cost $1,071. Given that every year thereafter the energy costs of the LED tubes would be lower than fluorescents — $269 versus $431 — the analysis found that after 16 years the LEDs offered a six percent cost savings.

Still, as with most green building products, the long-term cost savings of LEDs won't necessarily convince building owners right away. It's likely to take awhile for them to warm up to the idea that they should increase their lighting budget by a few thousand dollars, even if it means reducing their energy bills.

In the meantime, during the ten years the study predicts it will take for LEDs to overcome obstacles to their adoption, fluorescents will continue to replace incandescents, the authors say. To fill that future market demand, companies are emerging with controllers and sensors to help boost the efficiency of flourescent bulbs.

Cavet: 'Save Energy and Money Now' 

One such firm is the venture-backed Toronto company , which recently launched its LumiSmart Intelligent Controller, a device that connects directly to lighting circuits and automatically adjusts voltages to improve efficiency.

With its 'save energy and money now' approach, Cavet is likely to be appealing to building owners.

"A 100,000 square foot property can be outfitted with LumiSmart in one afternoon and benefit from an immediate savings of 30 percent with an ROI payback period of between 12 to 24 months," Albert Behr, president and CEO of Cavet Technologies, told SolveClimate.

According to the company, a single LumiSmart ILC can manage lighting loads of up to 6.9 kilowatts, or around 130 fluorescent lights. The product provides power savings by altering the power waveform and then applying what Cavet calls an "adaptive power factor correction." By inserting on-off pulses into the sine wave, LumiSmart is able to dramatically reduce electrical consumption with minimal impact on lighting levels.

So far, Cavet has caught the eye of venture capitalists and as-yet-unnamed utilities in Canada, Europe and the U.S., all eager to test the company’s controller. It also won praise from cleantech analyst Dallas Kachan, former managing director of The Cleantech Group, who released a of the company via his market research firm, Kachan & Co, last week.

The key benefit of Cavet's controller, analysts say, is that it is relatively inexpensive at $2,000 per controller and is quick and easy to install. While it still needs to be installed by an electrician, it's about as plug-and-play as such a device gets, the company says.

"There are other lighting controllers, but they generally take a lot of time and money to install, so the more lights an organization has, the more expensive these other solutions are," Kachan says in the company’s launch video.

The LumiSmart product has been in trials throughout Canada and Europe during the last year, including at the Canadian headquarters of electronics manufacturer Celestica, which is both making and testing the product.

At the LumiSmart product launch earlier this month, Cavet executives showed on stage how their product had delivered a 40 percent energy savings at the manufacturing facility.

Later this year, the firm plans to release a related demand-and-response product, which will allow property managers and utilities to set building lighting systems to automatically power on and off, and dim, according to the availability and price of electricity.

Others Hedging Their Bets Elsewhere

While Cavet is focused for the time being on making fluorescents more efficient, another smart lighting company, Siemens spin-off , is hedging its bets by focusing on controlling and automating lighting—no matter the light source.

EnOcean's sensors, transmitters and controllers have ultra-low energy requirements, allowing them to run off of so-called "harvested energy" from ambient light, sunlight and electrical cables.

For its part, U.S. industrial giant General Electric has decided that it's going to be ready and waiting when the residential LED market blows up. The company recently the late 2010 or early 2011 release of its LED bulb shaped like an old-fashioned incandescent bulb. Although GE is not the first company to figure out how to make LEDs more "bulb-like." the fact that the inventor of the bulb is making an LED version is big news.

GE's bulb is guaranteed to last 17 years and consume only nine watts of power, delivering a 77 percent energy savings over incandescent bulbs.

Early adopters will likely rush out to buy the bulb, but with a price tag of $40 to $50 each, the costs could remain a barrier to widespread market penetration.

See also:

Tax Incentives Promote Energy Efficiency, Renewable Power

California Greening: State's New Green Building Codes Have Some Crying Foul

Students Lead Charge to Power School with Renewable Energy

LED technology is still

LED technology is still costly in comparison to fluorescent bulbs. Fluorescent light bulbs contain small amount of mercury (4 to 20 mg). When fluorescent light bulb shatters, it releases mercury vapor.

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Good Post

Nice Post, thanks for sharing.

We are Energy Saving Solutions provider offering various solutions by utilizing the energy of the Sun or providing alternate means to reduce your energy consumption levels and save the environment.

LED Lighting saves up to 70% of your Lighting bills.

 

LEDs

I thought your post on LED lighting was very interesting.  LEDs are far superior than its predecessors in that they use less energy, they have a longer life and they are better for the environment.   While the initial cost of LEDs is higher than incandescents and CFLs, it will be offset by the energy savings and the long life of the bulb.  It would be beneficial for any household to make the switch over to LED lighting.  I currently work with Sharp, but I have always been a fan of their products they have to offer.  If you are in the market for lighting, I recommend you check out their <a href="http://www.sharpusa.com/ForBusiness/LEDLightingCommercial/LEDLighting_Commercial.aspx">LEDs</a>

Cost is coming down

The cost of the led lights are coming down. In few years time it will replace CFL and other outdoor lights

LED Lights

After observing the massive growth of , it can be said that in the upcoming future, advertising and marketing of any business will be done completely from them. With the spend of time, their quality is also improving. Their softwares are also introduced in the market due to which a big LED lighting system can be controlled and operate from a software.

Lighting Design

We are a Design, Manufacture and Installation company who has helped many companies add impact to their signage by changing there lighting system to LED. We have also designed, manufactured and installed for casino across the country using the LED lighting system and have been able to really give our customers a good deal with a lighting system that is energy efficient, last longer, can be programmable to change colors etc... and is safer for the environment.

While I don't feel the

While I don't feel the technology has fully matured, it's definitely reached a point where it's at least good enough to use for many applications. There are some applications where I don't think we'll see LED lighting in large scale but for every day use, I believe the writing is on the wall.

LED lights will save our planet...

LED light bulbs are non-toxic and not made from hazardous materials.

Fluorescent light bulbs contain small amount of mercury (4 to 20 mg). When fluorescent light bulb shatters, it releases mercury vapor. Mercury is hazardous and the quickest way for mercury to enter your body and absorbed into your bloodstream is by breathing in mercury vapor.

More info from the link below:

LED Lights is far from being mass applied

Hi, guys. Although we can list tens or hundreds of benefits of LED lighting, the barrier is the price. As developed countries can afford that price for saving the planet, 4/5 of the human will still not regard this as an alternative to incandescent bulbs.

While LED has come a long

While LED has come a long way, there are still some major disadvantages to using it.
First the light output is considerably lower than that of fluorescent bulbs. Yes it consumes less, but it doesn't light the area as well as a linear bulb. What's more the angle at which the light is emitted is extremely narrow making it difficult to use LED to light up a wide area.
Secondly, as mentioned in the article, LED technology is still costly in comparison to fluorescent bulbs.
Thirdly, there is not product standardization at this point, meaning that when your LEDs start to burn out you may find yourself having to replace the entire system.
This article is great to read to learn more about the difference between LED and fluorescent technology:

White LED is already there and improving so fast

That article os lumiversal is completely uncredible and probably designed to "eat" uninformed minds. Is not scientific at all, they dont show the light sources used, they do not give any reference at all or the way the testing was undertaked. And they have good reasons to put down leds due to theyr main bussines lines.
LED technology has overcome T5 performance more than 2 years ago, you just have to ask CREE or Seoul Semiconductors or OSRAM among others.

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