Brad Bullington, CEO of Bridgelux
Solid state lighting isn’t coming. It’s already here.
Look at the construction specifications for any large commercial project and you will find LEDs and, increasingly, lighting networking, as an integral part of the plan. It’s a no-brainer. Energy efficient buildings achieve rents that are 4% to 13% higher than conventional buildings and achieve capital valuations that can be 3% to 25% higher than their normal counterparts. Lighting accounts for 14% of all energy used in commercial buildings and LEDs are key in maximizing these returns.
Cities are rapidly converting to LED streetlights for many of the same reasons. LED street lights can reduce power consumption by over 70%. Just as important, they last for decades, dramatically reducing maintenance hassles and outages. In Paris, solid state streetlights are being equipped with networking to dim lights after 1 p.m. to reduce light pollution. LiFi, an emerging standard for transmitting data via solid state lighting sources, is already being studied as a mechanism for sending real-time information about traffic jams.
The Department of Energy estimates that solid state lighting is on track to cut lighting power by 46% by 2030.
The last frontier is the home. Homes are a little more challenging than commercial buildings. Energy savings can’t be as easily monitored and homeowners don’t think of lights in the context of total cost of ownership. But the picture is changing. Consumer reports noted that an LED bulb can save you $100 to $400 over its lifetime. LED light fixtures and bulbs occupy much more shelf space in big box retailers than they did two years ago. Even tech sites are running bulb reviews.
LEDs may not gain universal acceptance. But we think they will take at least 75% of the market.
|Mike Watson, vice president of product strategy, Cree, Inc.
The lighting industry has made great progress in LED adoption but needs to focus on delivering compelling products that facilitate the technology’s acceptance. Many LED lighting products are at, or close to, price parity with incumbent technologies. Even before achieving parity, LED lighting delivered improved value for commercial and residential customers, from better light quality to long lifetimes and energy and maintenance cost savings. We have moved past the stage of asking ‘if’ it will happen, and should now ask ‘how fast’ will it happen, which will be determined by how well manufacturers leverage innovation to deliver enhanced customer value.
While increased efficiency and lower costs are positive technology trends, by themselves they do not ensure better adoption. Manufacturers who design for cost only and compromise on performance can frustrate customers and ultimately slow acceptance. LED lighting products should be better than incumbent technologies, meet or exceed customer performance expectations and provide significant new value to spur adoption. Proven LED advancements like Cree® TrueWhite® Technology combine exceptional, no-compromise color quality with improved efficiency. Recent achievements like Cree’s 200 lumen-per-watt (LPW) LED concept luminaire and 303 LPW high-power LED prototype shattered efficiency expectations established by the Department of Energy (DoE) projections, and will provide building blocks for creating new customer value.
As LED technology continues to advance, it will open a new world of opportunity to address more lighting applications, introduce new form factors, integrate advanced functions and increase design flexibility. The latest products go beyond viewing light as only a source and point toward a world where LED lighting can enable a new-age digital building infrastructure. Future gains in acceptance may come as much from the realization that lighting is changing from a disposable commodity to a long-term asset, as it realizes continuous improvements in efficiency or reduced cost. But first, the industry must resist the temptation and history of compromise, and deliver overwhelming value to motivate change. When the customer base is motivated, the opportunities for LED lighting are endless.
Danny Yu, CEO, Daintree Networks
For lighting applications, I believe LEDs are poised to gain universal acceptance. The industry continues to make strides by reducing costs and increasing energy efficiency. The digital capability of solid-state lighting allows for better quality of light to create the environments that we want for our homes and businesses, along with achieving greater energy savings over traditional lighting. However for universal acceptance, not only do the price points need to continue to decrease, but we must add value. LEDs are inherently energy efficient and even if prices weren’t decreasing, it would still be a worthwhile investment because of the payback and operational efficiencies. But by adding lighting control into the mix, it allows for a whole new level of energy efficiency gains. The one-two punch for energy savings is the addition of control, not only to manage the LED lights, but to expand the control and manage the rest of a building’s energy needs, such as thermostats/HVAC and electrical plug loads.
Leading companies are now embedding wireless modules into LED drivers and fixtures. This reduces the costs at manufacturing as well as for installation. As a result, LED lighting can have wireless control capabilities right out of the box. Also, by using an open-standard for the wireless connection, the building and energy managers have some leverage when negotiating price compared to proprietary systems that include one company’s lighting and control network. The open standard allows the manager to have bargaining power and the ability to mix and match the lighting fixture they prefer with the wireless control network that meets their needs.
Also, government-imposed energy regulations are helping to drive the adoption of LED lighting and in particular the integration of controls for energy management. As we continue on the path toward universal acceptance, to create smart buildings, it all starts with smart LED lighting.
|Todd Traylor, NF Smith & Associates, Vice President of Global Trading, Smith & Associates
The LED market outlook is solid and supported by two key sector drivers. While decreases in prices and increases in efficiency are driving consumer uptake in lighting, there are increases in LED backlighting chips for small- and medium-sized panels. This creates a dual-market position for LEDs: one in lighting and one in panel backlighting. The stability of having two key drivers supporting price decreases and efficiency improvements further strengthens LEDs in the overall market and supports the uptake of LED solutions, creating a positive cyclical momentum.
In the lighting sector, LEDs have benefited from both the improved price points, and the increased diversity in size, shape, and color options have provided options in response to market demands. In concert with expanded LED lighting options, the momentum behind Corporate Sustainability Management (CSM) strategies has improved the forecast for LED lighting options in the business and industrial markets. With both consumer and enterprise/industry demand improving, further price declines and feature improvements (such as efficiency, color, size, etc.) will strengthen LED's acceptance in the wider marketplace.
In the LED backlighting chip sector, although the downturn in LCD TV sales has negatively impacted LED chip sales as well, the strength of mobile devices and small- to medium-panel touch displays (such as in tablets, automotive infotainment, among others) is growing and offsetting the TV panel decline presently. However, the longer-term forecast for LED backlighting chips is likely to slow over the next three to five years while LED lighting chips are likely double LED backlighting sales over the same period. In short, the market momentum and drivers for LED solutions continues to be positive and to encourage continued adoption and universal acceptance in lighting and as a standard for display technologies.
Julian Carey, Senior Director of Strategic Marketing, Intematix
LED-based lighting systems have dramatically declined in price over the last several years – in part, because LED chip efficiency has improved over the same time period. Clearly, solid-state lighting (SSL) adoption rates have rapidly increased due to the decreasing price and improved chip efficiency. However, we are still very far from universal consumer acceptance.
Low cost and efficiency alone are not sufficient for universal adoption. Equally as important is light quality. Light that lacks color uniformity across the beam, from luminaire to luminaire, as well as over time, will be rejected by the market. That being said, the lighting industry has made great progress in delivering very high-quality light from SSL systems. For example, since most LEDs produce a blue light not usable for general lighting applications, advanced phosphor materials are being used to convert the blue light to quality white light with various color rendering index (CRI) values. The new materials are very rugged—lasting and maintaining color consistency over many years. The color range of these materials has also increased. Mixing of colors, such as green and red phosphors, has allowed cost-effective production of SSLs with very high quality of light. These systems are being adopted for retail and hospitality applications, where high quality light is of paramount importance to attractively present merchandise and to create warm, inviting environments for hotel and restaurant patrons.
Quality of light is also beginning to be designed and controlled for specific applications. For example, a department store could use warm lighting with very rich colors in the evening wear department, while highlighting its house wares department with bright, crisp white color, optimizing the experience for the shopper.
The future of SSL adoption will rest with the quality of the lighting systems that we are able to deliver and the added benefits bestowed.
|Sagar Jethani, Head of Content, element14
Prices have been falling dramatically for LEDs. As recently as two years ago, a 60W consumer LED bulb cost between $40 and $50, but today buyers can find them for as little as $13. The dramatic decrease in prices is due to several factors—some related to technological advances in LED design, and others related to economic events.
A surplus of manufacturing capacity coupled with weak demand for LED-based consumer electronics resulted in the shuttering of hundreds of manufacturing facilities throughout China during the past three years. Only the largest players, like Sanan Optoelectronics, have continued to receive subsidies from Beijing needed to weather the storm.
Apart from economic factors, advances in the production of LEDs are changing supply-demand curves. While most people think primarily of bulb production when considering LED prices, improvements elsewhere in the package are resulting in better product performance and decreased costs. More efficient thermal management, the use of less-expensive, non-sapphire substrates (primarily silicon), and the development of stable AC and dimmable drivers are some of the major developments in next-generation LED design. Lux Research predicts that such advances in production will cut LED prices in half by 2020.
The dominant application most associated with LEDs is consumer lighting. Although adoption of LED lighting has accelerated over the past decade, households and businesses have had to weigh the total lifetime value of a typically more-expensive LED solution against traditional CFL bulbs. As prices continue to fall, however, expect an end to this cost calculation as homes and businesses opt for high-performance, low-cost LED lighting. Manufacturers like Cree and Osram have already started leading the charge by offering 60- and 40-watt LED bulbs at approximately a $14 price point.
But will the widespread adoption of consumer LED lighting drive LED component sales? Not necessarily, according to Ella Shum, director of LED research at Strategies Unlimited quoted in LEDs Magazine. Shum believes that revenues will be offset by component price declines. Finding ways to include LED solutions in larger trends, like the Internet of Things and smart home technology could help minimize the impact of falling prices. Manufacturers may also be able to unlock new revenue streams by offering innovative LED solutions, such as the Philips Hue , an Internet-controlled LED bulb which consumers can buy at Apple Stores nationwide.
Whatever the future holds, it is going to be a bright one for LED applications.
David Jenkins, Sr. Manager R&D – Illumination Optics, Optical Solutions Group at Synopsys
If equivalent market conditions exist for incumbent and new technologies, a new technology will gain acceptance when the consumer sees it as a net advantage over the incumbent technology. Currently, the primary metric of choice for promoting LEDs for widespread use in lighting is the end user cost of ownership, which includes the initial product cost, lifetime, incentive government rebates, and energy consumption costs, which vary widely with geographical region.
From a technologist’s point of view, adoption of a new technology is normally assumed to be virtually assured if it allows the end user to purchase more value for less cost. LED lighting products for many applications have crossed the threshold in terms of cost of ownership relative to incumbent lighting technologies. In order for adoption of LED technology to expand, the initial product cost will need to continue to decrease as production volumes rise and supply chains are optimized. One of the primary ways to reduce product costs as volumes increase is to decrease the number of components in LED lighting systems and streamline production. This will push the system-level architectures toward more integrated solutions. At higher volumes, systems will become more cost effective with electronic packaging integration and opto-mechanical assembly integration. Streamlined production techniques will decrease component count, minimize redundant material usage, improve quality, and improve performance. New lighting looks will begin to accentuate the stylistic advantages of LEDs over time through innovative optical architectures married with more daring industrial design.
|Peter Volpe, Electrical Engineer, Design and Construction Management, University of Massachusetts
In order to meet current Energy Codes and LEED standards (if used) LED’s are the only viable option due to new requirements regarding daylighting(dimming) and lower watts per square foot requirements which continue to go lower and lower. Costs have come down dramatically and the costs for LED downlights have been on par with compact fluorescent downlights for a couple of years and now prices for architectural LED linear lighting have also come to where they can compete directly with either T8 or T5 fluorescent systems. Utility company rebates for using LED’s also help to lower the costs. Area lighting systems which in the past was mostly comprised of metal halide and high pressure sodium are also being replaced with LED lighting since you have the ability to dim them, turn them on or off instantly without restrike issues (Superbowl) and provide coloring options. Fluorescent strip fixtures and wraparounds are still hard to compete with if you just need to turn the lights on and off. The one thing to be aware of is manufacturers pay back calculations which apply to large system installations only.