By Dan Carazo
Recently I spent some time “chatting” online with some
industry folks in a networking group which I had formed and now moderate. One
of the nearly 900 industry members that make up the “Green Lighting” group on
LinkedIn.com posted a very basic question that became an interesting discussion
on the current state of the LED Lighting market.
A Sales Specialist for Energy Projects working for Schneider
Electric in the Mexico City area had asked the group, “Do you think LED
Lighting is a real cost effective solution for energy saving projects?”
Hey, I’m very interested in where the LED Lighting market is
going, and I found the scope of the posted responses very interesting – both
for the many opinions that were shared by lighting professionals, as well as the
diversity of the many geographical locations and markets served by these
individuals located in Los Angeles, Singapore, Philadelphia, England, China,
Malaysia, Boston, Atlanta and Missouri.
The first response, posted by the CEO of a United
Kingdom-based firm that designs and produces advanced LED drivers for lighting
OEMs, was very thoughtful: “I certainly hope so. The motivation behind me
and my business partner creating our company (AccurIC Ltd) is predicated on
this. However, it is important to realise where LED lighting can have greatest impact
in terms of the green agenda.
“In my view, it is in commercial lighting projects, in which concepts such
as 'daylight harvesting' and 'adaptive lighting' call for technologies that can
simultaneously bring DEEP dimming (0.5% or below, in current terms) high MTBFs
(>1 Million hrs for drivers) and high power factors (>0.9) - either from
the constant current driver itself, or the DC power supply (if separate). What
is very surprising, therefore, is the number of LED control gear manufacturers who
do not explicitly state, for instance, the MTBFs of their power-supplies,
constant current drivers, etc.”
Of the 19 responses posted five responders appeared to
overlook or downplay what remains obvious to me – the need for a much improved
LED Lighting ROI/payback scenario based on lower LED price points. It’s not
surprising that all five responders who chose to emphasize the energy savings
and “greenness” of LED lighting each represent the sales and market development
functions for several LED manufacturers based in Asia.
My opinion on the adoption of LED technology here in the U.S.
is simple. Price matters!
My posted response in the Green Lighting discussion is as
follows:
“I agree there is much to be excited about regarding the major energy saving
and long-life benefits delivered by LED. However, as a marketing strategist
with 30 years B2B experience I recognize that LED is not being embraced as
quickly as many of us would like for broader commercial, institutional, and
residential lighting. If we are 100% honest, we must admit that it is easy to
claim LED lighting is more energy-efficient and greener, far better for global
solution to reduce carbon emissions, etc. But the much higher costs for current
LED lighting solutions continues to slow the acceptance of LED as a leading
commercial and residential lighting technology.
Business managers, building owners, and maintenance
directors still cannot rationalize the multiple higher cost for LED solutions
when they consider lighting retrofit costs. I have a problem with some of the
projections that have indicated that LED would become the #1 lighting
technology for buildings by 2016. That date is only 4 years from now and
currently there is no comparison between the cost to install a proposed LED
lighting solution or a T5 fluorescent system. T5 or even Induction lighting
remains far more affordable when the buyer's decision is based on a short ROI
(say under 4 years).
Is LED lighting usage increasing? Yes. But we are as yet
not seeing the incredible adoption rate for LED that will be required for the
LED technology to surpass T8, T5, as the most frequent lighting choices. Price
does matter. And all new technologies must gain higher production quantities in
order for pricing to drop. This has happened with personal computers, laptops,
HDTVs, and smart phones. Eventually LED prices will come down. Then the
technology will likely take over the market.”
Another responder, Bill T., a Sales Rep for a Missouri-based
LED marketer, summed up my very own sentiments when he said, “It all comes
down to the ROI on the project. Money is money, but the world is going to move
to LEDs.”
While I don’t buy the published projection that the U.S. commercial
lighting market will be taken over by LED by 2016, I admit that I could be
wrong, so I’d like very much to hear from you regarding your own experiences
with the LED Lighting market.