Blog: Cost and Efficacy Forecasts For LEDs

By Brooke C. Stoddard

The Department of Energy has articulated the following goals for the Solid State Lighting (SSL) industry: 1) introduction in federal fiscal year (FY) 2016 of warm white LED general illumination products of at least 112 lumens/watt (lm/W) efficacy and of cool white 131 lm/W; and 2) increase installation of SSL products to effect an electricity savings of at least 21 terawatt-hours (TWh) a year by FY2016. Eventually DOE sees 200+lm/W in both warm and cool white general illumination products for the general market and annual electricity savings from SSL of 122 TWh per year. When these levels are achieved, along with a 15% market share for LED luminaire and replacement lamp sales (or roughly 60% of lumen-hours), DOE will consider the market for LEDs mature enough and self-sustaining enough for DOE to bow out.

DOE in April released a report entitled Solid State Lighting Research and Development: Multi-Year Program Plan. In the report, DOE said that Cree, Inc. has already developed a 200 lm/W product, that efficient high-quality LED-based 60W replacement bulbs have dropped in price from more than $50 to about $15 in 2012. Other statements by text or graph in the report include: by 2030, about 70% of installed base lighting will be LED; prices for good quality 60W LED replacement bulbs are approaching $10 a bulb, which may be a tipping point for consumers buying replacement bulbs for their homes; by 2020 the price per klm/W will be about $5.

In other statements, DOE says the current rate of cost decline for LED products is 20% annually. LED scientist Dr. Roland Haitz, formerly of Agilent Technologies, 13 years ago formulated what is now called Haitz’s Law. It stated that the cost per lumen would decline by a factor of 10 every decade and that the amount of light generated by LEDs per package would increase by a factor of 20. Developments since have borne him out.

Another DOE report is entitled Adoption of Light-Emitting Diodes in Common Lighting Applications (May, 2013). This one looks at nine general applications for LED lighting. A conclusion is that a major source of savings not yet realized can come in the field of LED troffers. Accordingly, DOE expects a great deal of attention to research and development in this field.

Yet another DOE report, Energy Savings Potential of Solid State Lighting in General Illumination Applications (updated January, 2012), DOE predicted that by 2020 LED lighting will compose 36 percent of lumen-hour sales in the general illumination market, a figure that would grow to 61 percent by 2025 and to 74 percent by 2030. Commercial penetration would be somewhat less and industrial penetration about the same. The report’s statement, “LEDs are on the verge of revolutionizing the lighting market” is thus well founded.

Pike Research of Boulder, Colo. (Navigant Research) is even more optimistic. It has predicted that LED lighting will capture 52% of the commercial building market by 2021 and that according to one source it expects “the lighting industry to see more change in the next five years than in the previous 50, comparing the rise of LED popularity to the commercialization of the fluorescent lamp in the 1930s.”

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Brooke C. Stoddard is an Alexandria, Virginia-based writer covering business, manufacturing, energy, and technology.