LED’s Emerge as Popular ‘Green’ Lighting

The lighting industry has finally come up with an energy-efficient replacement for the standard incandescent bulb that people actually seem to like: the LED bulb. Although priced at around 20 times more than incandescent bulbs, LED’s last much longer and use far less electricity, a saving that owners are beginning to recognize. Prices for the bulbs are falling steadily as retailers like Home Depot and Lowe’s sell them aggressively, and manufacturers improve the technology.

Moreover, because the light in LED bulbs comes from chips, companies have been able to develop software applications that let users control the bulbs, even change the color of the light, with tablets and smart phones. Apple sells a three-pack of such bulbs, with the hardware to operate them for about $200.

“You’re seeing all of your growth in the LED category,” said Brad Paulsen, a Home Depot merchant. “We absolutely expect LED technology in four or five years to be the most popular lighting technology that’s out there.”

Last year, LED sales, though small at about 3 percent of the residential market by some estimates, grew faster than those of any other lighting technology, according to retailers and analysts.

Among A-type bulbs, the most common, LEDs will outsell incandescent lamps in North America in 2014, according to projections by IMS Research, an electronics research firm. And LEDs will become the most popular A-type technology by 2016, with North American shipments reaching almost 370 million, a more than tenfold increase from the roughly 33 million shipped last year, the firm estimates.

LEDs were responsible for 20 percent of lighting sales last year, according one manufacturer.

Incandescent bulbs, while cheap, are very inefficient, wasting most of their energy as heat as they pump electricity into filaments to make them glow. The government has been pushing consumers to other technologies for several years, in part by phasing out the manufacture or import of the least efficient bulbs.

The first big alternative to emerge, compact fluorescent bulbs, has left many consumers dissatisfied. The light quality is seen as harsher, the bulbs can be slow to warm up and difficult to dim, and they contain toxic materials.

LEDs are more expensive, but offer better light quality and more flexibility. And thanks to heavy marketing by retailers, customers are beginning to discover their appeal.

“The LED you buy, even though you pay even $25 or $30, it’ll last like nine or 10 years,” said an electrical utility worker who was eyeing LEDs at the Home Depot. “And environmentally, they’re safer, too.”

Lamp manufacturers are rushing into the market, sending prices falling. Home Depot sells some 40-watt-equivalent bulbs for about $10.

“Most of the manufacturers are moving toward new designs in solid state lighting, as are we,” said one manufacturer.

Although his company still sells more compact fluorescent lamps, growth in that business has slowed, while demand for LEDs is skyrocketing. “In the long run, solid-state lighting is going to make a whole lot of sense for almost every lighting application.”

For the manufacturers, LEDs pose a new challenge. They offer higher profit margins, but because they can last for decades, people will be buying fewer bulbs — of any sort.

The Energy Information Administration estimates that total light bulb sales will fall by almost 40 percent by 2015, to just under a billion from 1.52 billion bulbs, and continue their decline to about 530 million by 2035, with LEDs making up a steadily increasing portion of the market.

As a result, many companies are competing to establish themselves as popular brands.

“The company that can dominate will make a lot of money,” said Philip Smallwood, senior lighting market analyst at IMS Research. “So it’s a big push to get into it early.”

With demand growing for LEDs in other uses — like backlit phone and computer screens, automotive lights and street lamps — manufacturers have been able to develop their technologies and benefit from economies of scale to help bring the price down, said one industry analyst.

In the commercial and industrial sector, use of LEDs is more common than in homes, analysts say, because companies are more likely to do the long-term cost-benefit analysis of buying lighting than homeowners, who are still largely driven by the upfront price.

Goldman Sachs estimates that in the residential sector, penetration of LEDs will rise from 3 percent last year to 16 percent in 2015, still lagging the commercial and industrial sector as well as outdoor applications like parking lots and billboards.

But as the cost of an LED approaches $10 — a tipping point that would speed mass adoption, according to Mr. Smallwood — retailers have been stepping up their efforts to market the lights, often with proprietary brands like Home Depot’s EcoSmart (manufactured by Lighting Science Group) jostling for shelf space with long established brand names.

“One day I randomly walked into a Home Depot and thought, LED — when did that happen?” Said Clayton Morris, a host of TV’s “Fox & Friends,” who was buying bulbs as part of a project to replace the incandescent lamps in his home. “It’s a hefty investment upfront,” he said, “but it just seemed like a great savings.”

At the same time, in an effort to transform light bulbs from a cheap, disposable product into something that consumers might show off to their friends, manufacturers have been adding functions that could ultimately fit into a larger home automation system. Often Bluetooth- or Wi-Fi-enabled, a new generation of LED bulbs offers all manner of new remote controls and automatic responses.

Some can change colors along a broad spectrum and offers settings that can mimic sunrise in the morning or use a special “light recipe” intended to raise energy levels. Such bulbs have been a big hit, analysts say, attracting a host of software developers who have created free apps for new features, like making it respond to voices or music.

Excerpted from the article: LEDs Emerge as a Popular ‘Green’ Lighting 
by Karsten Moran, as published in The New York Times, January 22, 2013.