Three Ways to Play the Ultimate in Energy-Efficient Lighting
by David Fessler, Energy and Infrastructure Expert
Friday, May 28, 2010: Issue #1270
Stroll down the lighting aisle at your local hardware store a few years ago and you’d have seen an array of incandescent screw-in bulbs and fluorescent tubes.
But in December 2007, the U.S. Congress quietly set the wheels in motion for a major change to America’s lighting market – one worth roughly $100 billion a year.
It passed the Energy Independence and Security Act, which mandates the end of most incandescent bulbs between 2012 and 2014.
The reason for it is simple: Incandescents are energy hogs. Only 5% to 10% of the energy they consume becomes visible light. The rest is given off as useless heat.
And given that lighting sucks up about 22% of the energy we use, you can see why much of that is wasted. You need only look at the average city skyline to see office buildings lit up… but nobody is in them.
And if we’re not going to decrease our energy usage anytime soon, we’re going to have to increase our energy efficiency instead…
The Lighting Industry Responds with CFLs…
As I mentioned in my column back in April, the lighting industry responded to the efficiency call by manufacturing the Compact Fluorescent Lamp (CFL).
I have a dozen or so of them installed throughout my home. But I’m now rethinking my incandescent bulb replacement plan.
You see, CFLs have a big problem. While they are much more efficient bulbs, they also contain small amounts of elemental mercury. This represents disposal and potential health problems. And the trouble is, most consumers who purchase them are completely unaware of this hazard.
- Like everything else they throw out, most folks just toss CFLs in the trash. But this totally offsets the energy-efficiency element by unnecessarily dumping heavy metals into landfills.
- If you break one, simply vacuuming up the mess contaminates your vacuum cleaner with mercury.
- Breathing in even small amounts of mercury can lead to pulmonary and central nervous system problems. Symptoms can include tremors, insomnia, irritability, short-term memory loss, headaches and even psychological changes… Ouch.
In addition, the fact that most CFLs are currently non-dimmable has lighting companies scrambling to come up with a better solution. But the answer has actually been around since 1962…
Six Advantages of Light-Emitting Diodes (LEDs)
If you go all the way back in time to the early days of the transistor, you’ll find the first design of Light-Emitting Diodes (LEDs).
They’re known as “semiconductors” – a term used to describe electronic devices composed of transistors and/or diodes. The movement of electrons inside a diode creates the light from an LED.
Early LEDs emitted a low intensity red light. But advances in LED technology mean that modern versions cover the entire visible light spectrum, plus ultraviolet. Infrared versions are used in most TV remote controls.
But the development of the high-intensity LEDs has enabled them to be considered a viable replacement for incandescent light bulbs. Their advantages…
- Like their mercury-containing CFL cousins, LED bulbs are highly efficient. To pump out the same amount of light as 40 to 100 watt incandescent, LEDs only consume 3 to 13 watts of power.
- Unlike CFLs, which can take time to warm up, LED bulbs produce all their light the instant you turn them on.
- LEDs emit no heat and work at low ambient temperatures.
- LEDs are dimmable.
- The average life expectancy of an LED bulb is upwards of 50,000 hours.
- There is no mercury or other toxic elements in an LED bulb.
There’s just one big problem with LEDs…
Energy Efficient LEDs Are Pricey… But Not for Long
Because LEDs are being made in such small quantities, they’re expensive. For example…
- A 40-watt equivalent LED bulb will set you back about $30. A 100-watt replacement bulb is closer to $60.
- Have a few floodlights outside your house? LED versions of those bulbs currently sell for anywhere from $90 to $120… each.
- Have fluorescent tubes in your garage or basement workshop? LED versions of those are available, but be prepared to pay about $70 each.
However, as an engineer, I can tell you that when high-volume manufacturing kicks in, the price of LED bulbs will decline dramatically.
At that point, savings come in two ways…
- In the form of reduced energy consumption.
- In the maintenance costs to replace the bulbs, given the average lifespan of LED bulbs, compared to incandescents and fluorescents.
There’s no question in my mind that LEDs represent the future of both commercial and residential lighting. The commercial sector will likely adopt the newest bulb technology first, but we’ll likely see widespread adoption within the next 5 to 10 years. And CFLs will be quickly relegated to the “it seemed like a good idea at the time” pile.
Who Are the Movers and Shakers in the LED Market?
With the LED market heating up, three companies are at the forefront of the lighting industry…
- General Electric (NYSE: GE).
- Koninklijke Philips Electronics NV (NYSE: PHG).
- Cree Inc. (Nasdaq: CREE).
In early April, GE announced the introduction of a 40-watt equivalent LED bulb, which emits 450 lumens of warm light. The expected release date is early 2011.
Not to be outdone, Phillips – the largest lighting manufacturer in the world – said it will release an LED bulb that will be a 60-watt incandescent equivalent. Its bulb will emit 806 lumens – about the same as a 60-watt bulb. It will also be dimmable and available on a large scale by the end of this year.
Other manufacturers besides these three include Osram, Toshiba, Panasonic and startups like Renaissance Lighting and Bridgelux.
The bottom line is that while LED bulbs are likely to remain expensive over the near term, they’re already cost-effective when you consider their 50,000-hour average lifetime.
For consumers, energy-efficient, long-lasting, safe LEDs represent a viable replacement for wasteful incandescent bulbs and an even better alternative to CFLs. And for investors, the switch to LEDs offers a way to profit from a smarter era in lighting before the masses catch on.
Good investing,
David Fessler
Related Investment U Articles:
- Goodbye Incandescent Light Bulbs… Energy-Efficient CFL’s Are The Future
- eBay’s Next Hot Item: Incandescent Light Bulbs
- Goodbye Incandescent Light Bulbs… Energy-Efficient CFLs Are the Future
- The Biggest Lighting Evolution Since Edison – And the Company That Will Benefit the Most
- Are We Using Less Energy Than We Did 40 Years Ago?
11 Responses to “Three Ways to Play the Ultimate in Energy-Efficient Lighting”
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David Fessler is the energy and infrastructure expert for Investment U.
I think playing GE and Phillips for an LED lighting investment is foolish. GE’s percentage of business in LED’s is a fraction of their enterprise value. A small cap direct play would be Power Secure (POWR). Their LED sales are up 600% year over year. POWR’s LED lighting systems have been adopted by all Publix and Wal-Green stores. They also have a number of exciting new products in the offing.
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Can (PANL) hold a candle to these other companies ?
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Well once again David, I have to take serious issue with your contention that incandescent bulbs are a thing of the past.
First you make the statement that only a small percentage of the energy is used as visible light (that is indeed quite correct) but then jump to the conclusion that the remaining energy is “wasted” as heat. While it is quite true that the remainder ends up mostly as heat it is a real stretch to say it is wasted. Here is why that statement is not correct.
Most lighting units are located indoors to light indoor spaces. An incandescent light bulb produces two useful by products. One is light and the other is heat. In winter – when lighting is used the most – the heat produced off sets space heating requirements resulting in a net reduction of heating required. So the “wasted heat” is not wasted at all. It is used to partially heat the space.
The reverse is true of course in the summer and the additional heating is unnecessary. However since lighting is used for much longer periods in winter where the heat is useful and much less in summer when the heat is not required there is an overall net benefit.
Of course the stupidity of “blacklisting” cheap incandescent light bulbs is that other types of heat producing light bulbs (halogens used for pot lights) are not affected. These produce far more heat than incandescent light bulbs but are apparently OK.
The other stupidity is that the energy manufacturing costs of LED and miniature florescent fittings is far far higher than incandescent bulbs.. That means that converting to either one of these “innovations” is going to INCREASE electricity consumption NOT decrease it.
It would be far wiser for governments not to meddle in things it knows nothing about. And that is just about everything.
For me I plan to make money from the Governments lack of knowledge and have stockpiled thousands of incandescent bulbs which I plan to sell when they become scarce for several times what I paid for them.
But since when was Mr. O an energy expert?
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What I need is an energy efficient bulb that puts out enough light for an old lady to read by and to light up my living room. I need 200 to 250 watts or equivalent for this. Please tell GE and Phillips.
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Are LED’s powered with 110 volts, or 12 volts? My experience with halogens is that the bulb is still good when the transformer goes bad, and all replacements that I locate have different transformers, so I throw away a good bulb and a complete unit that I can’t fix. (I’m not an Electrical Engineer, so not prepared to repair.)
A screw in incadescent or flourescent I can handle.
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I actually work at GE in the Home & Business Group which includes the lighting division.
The lighting division has had a remarkable turnaround in GE reporting an op profit for the 1Q after a series of bad years. However, we are such a small (and unfortunately) irrelevant part of the GE portfolio. To be honest, the real advantage of appliances, lighting, etc for GE is the short term cash it generates because all of the other business are high margin, but also long cycle time/capital intensive businesses.
However, if you are a green investor and like an infrastructure story – GE is a smart move and lighting is a (very small) part of this story.
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Terrific comments, with some very bright ideas.
Malcolm, I wish you great success with your hoarding venture. Its sure to work out if you live up north.
The energy savings from just changing our light bulbs is enormous on a nationwide level, so I expect this government will take control over it.
It would still be worthwhile to convert just 70 or 80% of the incandesants which would be a more practical goal than banning the use of cheap 80 year old methods.
Since CFLs are affordable (costing less than 5X the cost of incandesants and lasting 5X longer- 10,000 hrs), they are my baseline…..
I will be more inclined to buy LEDs when they cost 5X the cost of CFLs $3.5 x5=$17.50, as they deliver 5X (50,000 hrs)the life. I doubt I will be in this house for 25 years (50,000 work hours)- yet another consideration.
I did want to mention: Malcolm,
high manufacturing costs are realitively tiny in comparison to 50,000 hrs of accumulated energy savings, and your only making 1, to replace 5.
At $30 a pop, I’ll let Europe buy them.
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Hey David,
You hit the nail on the head! LEDs are the future of lighting of the future (ofcourse lookin at the technology options as of today)
In your own inimitable style, do similar writing of the use of VFD (Variable Frequency Drives) for industrial applications. The leading consumer of energy is our industry, remember? As an engineer myself, I see tremendous potential of energy savings from this segment.
You have very correctly mentioned i n this article of yours that we will not scale down our energy consumption, hence we need to look at energy efficient options.
Keep up the good work,David!
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The author has 50 years experience in lighting fixture and lighting systems design, and still learns something new about lighting every day.
LED’s biggest design problem was to handle the heat they generate, so that facet of discussion is misleading.
LED’s are extremely expensive to make, while DOE has spent $300 million last year, and $75 million this year on R&D to the industy. LED’s use printed circuit boards which do use hazardous material in them, including solder which has lead in it. Leadless solder is more expensive, but until mandated probably wont’ be used.
LED’s loose light output efficiency much quicker than fluorescent these days, and are allowed to loose up to 30% light output to get the 35,000 hour life rating.
Fluorescents maintain 90% light output for the now rated 35,000 life when used on program start ballast. The fluorescent lamps cost much less, and the mercury (2-4 milligrams) in each can be recaptured via recycling as has been done in Canada for many years. Their is more hazard in the mercury generated by power stations than from fluorescent lamps thrown away, especially when it is recycled.
Glare from 00′s of little light sources is the biggest luminaire manufacturing design problem. New glare metrics, color metrics, and light uniformity metrics are forthcoming, and will effect the viability of these new sources which do have their proper place. That place is message boards, keychain lights, freezer lights at grocery stores, and the like. Area lighting applications are still pretty far off to do it correctly, economically, and with visual efficiency, is not really applicable today.
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There is an additional and safety component to the long-life threaded connections:
Wherever corrosion from condensation or cooking fumes may cause the threads of the bulb to freeze in the socket, use a good ‘anti-oxidant joint compund’ such as
NOALOX (Ideal Industries, Inc., Sycamore IL, 60178, Tel 800-435-0705: #30-026)
to prevent corrosive binding of the threaded bulb base in a fixture. Otherwise, with CFL’s or any long-life bulb, one will need to replace the fixture when the bulb does require removal. Only a tiny amount of the black, greasy lubricant is required (and a tissue to wipe the excess off the fingers).
Years back, when I changed to 60w equiv. dimmable Phillips for the regular 60w high hat incandescents, this stuff made the later replacements possible, and a 4 oz squeeze bottle will last a lifetime.
Since most Par30 ‘high hats’ are in ceilings, and some of those are condensation-prone (being cleared of insulation to reduce the fire-hazard of x BTU’s /lumen with the old-std incandescents, & note the comment above, about getting winter heat with thermal incandescents), the bonding of aluminized threads is very common.
Another “problem” with CFL’s that are dimmable are the RFI emissions, these don’t appear to be a problem with the LED systems.
There is a big market for higher output (1200 lumen) ceiling lights, 600-800 lumens may be O.K. for walking around, but not for reading. I’m hoping that the Par30 bases will be available at ca. 20-40 watt usage for replacement of 150 Watt incandescent floods … not for outside, but for overhead reading sources, indoors.
(Illumination falls off as the square of the distance from the source to the subject increases… in an 8′ high ceiling, the reading is 6 feet below the bulb … but in a high ceilinged {called “Volume” type in hot climates}room, with 11-14 foot ceilings, the page lighting is much less…so much higher lumen values are needed at ceiling levels to read a newspaper while seated). Current high output LED bulbs are only available at local HomeDepot & Lowes for the Par 40 flood sockets, & they’re too fat or stubby to fit in a Par30 indoor high hat fixture.
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LED lighting is undoubtedly going to become a bigger and more prevalent market. The energy savings and aesthetical aspects of the lamps is unparalled compared to other lamps.
However, they are still expensive and still rarely used because of the state of the economy. Before the lamps can be big sellers, the economy needs to recover. When the economy does recover, new builds will have LED lamps in the spec and the market will boom.
Until then, CFL bulbs will remain prevalent. For a huge range of CFLs, Incandescents, Halogen, HID, control gear and many more visit http://www.lampshoponline.com for all your lamp needs.
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