I’ve been writing this blog for over 2 years, and my intent has always been to review lighting products for use at home. When I started, I wrote about things like book lights and bulbs for Maglite flashlights, because that was all there was. But I knew these niche applications were important stepping stones and sources of revenues that would fund further R&D and product development to bring LEDs to mainstream. I believe that time is coming now.

Holiday lighting is one of the first real applications that I have seen, as I noted in this post. And in this NY Times blog post Home Depot is quoted noting a “triple-digit increase” in sales of LED holiday lights this year; it also notes that LEDs will account for about 25 – 50% of sales this year.

This forecast comes from a semi-conductor analyst company, iSuppli, which forecast a couple of weeks ago that the LED market will show 18% CAGR growth from now through 2013, to become a $14.6 billion market. They note that “LED light bulbs will address the residential and enterprise general illumination market in 2010.” Their report lists 17 applications for LEDs and I suspect the greater part of this growth is in applications like computer displays, televisions, mobile devices, etc.

But Siemens, owners of Osram-Sylvania,  is also bullish on LED lights, and appears to be quoting this research in their recent press release. (On the other hand, this also appears to be a case of trying to put lipstick on the pig of the poor results of this division — they go to great pains to make the case that Osram is the second-largest maker of LEDs and it is not a stretch to say that they are betting on turning around this division based on the growth of LEDs). They also fielded their own survey which reported that 12% of consumers have tried LED lighting — seems a stretch unless consumers are aware that the light in their booklights, flashlights, and nightlights are LED.

But Sylvania is getting more aggressive in the LED market, being the provider for the lighting the the all-LED Star Market that opened recently in suburban Massachusetts. (A competitor I recently spoke with derided this as a “science experiment”, implying that Sylvania doesn’t offer the range of products that are used in the store. Perhaps — but the learning from this experience will give Sylvania a much-needed jumpstart to general illumination applications).

Not only does the lighting in the Star Market use all LEDs, but Sylvania used this opportunity to put some of their replacement bulbs on the shelves. To this point, they have limited their products to some niche items but it appears they are beginning to follow Philips’ retail entry at Home Depot.

2010 will see more press releases of showcase lighting installations and more products reaching the shelves. But I don’t foresee massive adoption in 2010 — next year will be the year of testing and waiting until the price/performance equation improves.

Philips LED lights in Home Depot, Waltham MA

The photo in that post was from a Home Depot in Watertown MA. I have since seen similar displays at stores in Norwood and Waltham.

Clearly, Philips is staking out shelf space as the first-to-market. But are the products ready for prime time? Will this pioneer strategy give them first mover advantage or backfire if the products don’t meet consumer expectations? I expressed some doubts in my last post and have now bought a couple of the bulbs to try out. Stay tuned for the reviews!

Philips LED lights, Norwood MA

Will this bulb win the L-Prize?

This NY Times article give Philips the pole position for this $10 million prize. Win or lose, it is great for LED lighting.The Department of Energy launched the L-Prize a year ago to spur development of a light bulb that would do everything that today’s 60-watt incandescent does, but for only 10 watts. Apparently, they have learned lessons from the chaos of the introduction of CFLs,  and the poor consumer perception that these bulbs still suffer from.

But this prize can also trace its ancestry to the Super Efficient Refrigerator Prize of 1992. Utility companies put up a $20 million prize for a better refrigerator which Whirlpool delivered. While that specific model was not the success Whirlpool and the sponsors hoped it would be, it set the entire industry on a path that has resulted in decreasing the energy use of refrigerators by 60%, with improvements continuing.

Given the start of the science in LED lighting, this could be just the nudge the industry needs to bring LED lighting to the mainstream. Philips is trying to get there but the products they have introduced into retail still fall short of the bulbs they are trying to replace (see my post from a couple of weeks ago).

Applause to the DOE for this imaginative use of carrots instead of sticks to accelerate a new technology!

A couple of the points that stand out for me are:

• OLEDs allow completely new types of lighting because they can be used in sheets and even bent. The article speculates about venetian blinds or even windows themselves that are sheet of OLED. More likely are the lighted ceiling panels by Armstrong World Industries that would presumably fit any existing drop ceiling. 
• The qualityof light may take some getting used to. Pros: very uniform and even, likened in the article to the room looking as if the sun is still streaming in, even at night. Cons: monotonous, “missing the spiritual side” as one designer is quoted in the article.
• All the majors — GE, Philips, Osram-Sylvania — are putting big bucks in OLED.
• The first products are scheduled to come to market the end of next year.
• Anil Duggal, the head of GE’s OLED unit is quoted as saying, “I want to get the price down to $6 for an OLED device that gives off the same amount of light as a standard 60-watt bulb.”

That last quote is not surprising — I assume his colleagues over in the “regular” LED group are working toward the same goal. Will it be easier with OLEDs? The article says they give off almost no heat, so presumably the won’t need any heatsink which adds cost and complexity to current LED luminaires, as well as limiting their application. There’s no mention of what kind of drivers or power conditioning they need.

The opportunities are exciting. If they can truly create a sunlight-like effect, consumers will embrace them as background lighting.

The bigger short-term opportunity, it seems to me, is replacing fluorescent tube lighting. This is a big market with pretty standard size panels that would lend themselves to mass production. Because “regular” LEDs are such point sources, you need a lot of LEDs on a 4-foot array to replace a tube, hence they are – and are likely to remain — expensive.

I’ll definitely be doing more OLED posts to find out if they are as close to market as this article states.

Philips LEDs at Home Depot

Nestled among the CFLs at Home Depot were 3 Philips LED bulbs of fairly mainstream sizes. IMHO, this is bad merchandising for these products which are not ready for mainstream markets.

Here are the stats:

MR16, 4 watts, 2 color temperatures: 4100k and around 3000k, lumens not specified.

“Indoor flood”, size not specified, 7 watts, 3100k, 155 lumens.

Decorative bulb, candelabra base, 2.5 watts, 30 lumens.

I had seen the MR 16 at this Home Depot for a couple of months — over in the selection of halogen MR 16s. This was the first time I saw the flood or the candelabra bulb.

At first I was excited — here was a major brand in a major retailer with front-and-center shelf space. But as I examined the packages my enthusiasm cooled.

Price, of course, is the first deterrent to putting them in my shopping cart. At $15 – $25, it is really a non-starter.

Second, is the inconsistent labeling. The lack of lumen output or any comparison to what “regular” MR 16 bulb it would replace makes it hard to determine if it is suitable. Similarly for the flood — it is a different shape than the floods I use in most of my house (R30), so I can’t tell if this is a suitable replacement.

Third, is the lumen output. These are so low that they barely qualify as accent lights and would be so dim as to be unusable in most of my house.

For fun, I stopped at a Lowe’s and found there are not carrying any of these bulbs. They had the Sylvania “Dot It” lights, and a good selection of solar-powered landscape lights using LEDs, plus a few specialty signage/sports logo products.

It’s hard to know whether Home Depot and Philips are setting out to be leaders, or whether the lighting manager at this one store decided he would highlight these new products. Either way, this is clearly jumping the gun and risks retarding, rather than accelerating, sales as LEDs get closer to being market ready.

Either way, it is probably bad for LED lighting.

Clearly, these bulbs are only suitable for accent lighting, not general lighting. As such, they should be in a “specialty” lighting section. Otherwise, consumers will get them home, discover them to be really dim, and, like the early generation of CFLs, decide LED lighting isn’t acceptable.

Cree’s 2009 revenue surpassed half a billion dollars, a 15% gain over 2008. Good stuff. But what was more interesting was to dig into the earnings call transcript at Seeking Alpha.com. Two interesting themes emerged:

1. Lighting is the focus; other markets play a supporting role. A number of the analysts probed about Cree’s business in selling LEDs for backlighting laptops and potentially for TVs, and kept returning to question and push Cree management on how aggressively they are purusing this segment. From the financial analysts’ point of view, these are big markets now, not developing markets that will take some time to mature. From Cree’s standpoint, they are great for capacity utilization, but are short term opportunities. CEO Charles Swoboda kept emphasizing that, no, lighting is the strategic growth opportunity.
2. Lighting is not just about better LEDs and light efficiency, it is about market education and product packaging. Swoboda stated (in as many words) that what keeps him up at nights is that the lighting industry is not used to new technology. He articulated how the learning curve the industry faces imposes higher costs and inefficiency that keeps the lighting industry using the safe, known products and is a potential barrier to conversion to LED lighting. But here’s my favorite line that provides insight into Cree’s real advantage:

“The entire LED industry still thinks about LEDs like we’re semiconductor guys and the lighting industry thinks about them a little different.”

How refreshing that a technology company recognizes that they need to think more like their customer!  He gave an excellent example of a simple packaging of four chips and optics into a system that made it easier for their customers to develop products. The financial analysts should love this: no massive CapEx investments or risky upgrades to 6-inch wafer technology that make obsolete the investment they just made in going from 3-inch to 4-inch. But I’m not sure the number crunchers got the elegance of this approach. 

This also explains programs like Cree’s LEDCity Initiative. Get out of the factory, sit down with the buyer, understand their barriers, adapt products and help implement.

Congratulations on a great year, Cree. I’m betting that 2010 gets even better!

Streetlights strike me as a top candidate for a lighting application that will move LEDs beyond flashlights, holiday lighting, and other niche/novelty applications. (Read more about my thoughts on streetlights here and here).

As I’ve been doing this research, I’ve come across these stats:

• There are 35 million streetlights in the use that consume about 1% of all the electricity used in the country.
• Streetlighting can be as much as 40% of a town or city’s electricity budget
• LEDs use about half the amount of electricity as current sodium vapor or metal halide bulbs (some say up to 70%).
• LED streetlights are expected to last 2 – 4 times as long as current bulbs, resulting in significant savings in maintenance costs
• LED bulbs cost 2 – 3 times as much as current bulbs, but pay for themselves in 2 – 3 years when you factor in both energy and maintenance savings.

Now along with these expected results, three groups are adding more momentum to the shift:

Cree leads LEDCity, an industry-based program along with a number of their manufacturing and distribution partners. They kicked the program off in either December 2006 or February 2007 (two different documents on the site give these different dates) in Cree’s hometown of Raleigh, NC. Now a dozen cities including cities in China, Korea and Italy have joined.  It’s unclear what benefits these cities get (other than some PR). It’s pretty clear the benefits Cree gets…

Former President Bill Clinton has a foundation which is engaged in an Outdoor Lighting initative as part of their overall Clinton Climate Initiative. They state that their help is ”advising on project management, purchasing, financing, and technology.” The Los Angeles Case study notes that they helped put together a financing package that incorporate utility rebates with a five-year loan that is repaid out of the savings. This sounds like a very practical, yet creative, approach to getting over the barrier of the initial higher cost of LED fixtures.

On July 29, the DOE announced that it will form a Municipal Solid State Street Lighting Consortium to “collect, analyze, and share technical information and experiences related to LED street lighting demonstrations.” The consortium will be open to municipal officials and energy efficiency organizations, but not manufacturers. The stats I quoted above are all expected results, likely a combination of manufacturer testing, laboratory extrapolations, and marketing fluff. This initiative will help validate real world experience and raise municipal purchasers’ confidence that the projected savings will appear.

Watch this space for more news on these initiatives as they unfold.

Manufacturing LEDs shares many basic steps with manufacturing other semiconductor chips (pardon the layman’s description here!): taking silicon wafers, etching circuits on them, doping them with various materials, then cutting them into final product size. The article notes that the semiconductor industry has improved efficiency of processes 4,000,000x since 1975. The DOE is targeting a more modest 20x improvement for LEDs in the next 5 – 6 years.

The article describes some basic steps being developed: working on larger wafers, different lithography techniques, development of standards and specialized LED manufacturing equipments (as opposed to tweaking regular semiconductor machinery or building one-off proprietary equipment).

Sounds like pretty basic operations stuff to me. And with companies like Taiwan Semiconductor which brings an extensive body of knowledge in silicon chip manufacturing, announcing their intention to enter the LED market, progress should accelerate.

Reminds me of the early days of solar panels, when skeptics attacked them saying that the manufacturing process consumed more energy than the panel would ever produce in its 30-year lifespan.

It was wrong about solar panels and, according to this study by Osram, it is wrong about LEDs. Some question is raised about Osram’s methodology and they state that the full report won’t be released until October.

I haven’t found any of the sources that are raising this question, but contrary to the NY Times story this is not the first time this have been investigated.

In fact a group at Carnegie Mellon presented  this evaluation at the February 2009 DOE Solid State Lighting R&D Workshop. While they are careful to qualify that these are preliminary numbers, it comes to a similar conclusion: the energy saved in using LED bulbs far outweighs the energy involved in making them.

Source: DOI LED R&D Workshop, February 2009

The study looks at three areas: Materials and Parts Manufacturing, Product Manufacturing and Use; it leave open materials extraction and end-of-life variables. It uses as a reference 25,000 lumen hours of light. Incandescent lights require 1500 kwh across this lifecycle, LEDs require a little over 300 kwh; only 15 – 50 kwh of this energy are in the materials, parts or product manufacturing stages.

The Score:

LED 5, Incandescent 1.

Let me start with a list of the cities piloting or converting to LED street lights:

• New York, NY: 30% energy savings vs sodium vapor lights with twice the lifetime
• Los Angeles, CA:  40% energy savings and $10 million in savings per year
• Somerset, MD: An interesting story that gets into the upfront costs and the politics of trying to implement a new technology
•  Bangor, ME: A press release that quotes that the city expects to save 60% on its annual bill for street lighting.
• San Jose, CA: A WSJ story notes that cities often pay a flat rate for electricity, no matter how many street lights they have. The public utility commission has to approve any new rate changes. Can you say, “Barrier to adoption?”

The electricity cost is the obvious, but not necessarily the most powerful, driver of this adoption: LED bulbs are still 3 times as expensive as existing street lights, so payback can be several years based on energy cost alone.

Maintenance savings are huge, though: imagine the cost of sending out a guy (probably 2) in a bucket truck to replace a bulb. LEDs last twice as long so this adds a lot to the savings. Thus the LED light salesman will have a receptive ear for the “total cost of ownership” argument.

Several of the stories above mention that money from the stimulus package is available to subsidize the initial cost. Certainly helps explain the big uptick I’ve documented here.

But also there are two special programs: Cree’s  LEDCity initiative and the Clinton Climate Initiative’s Outdoor Lighting Program . I’ll have more to say about these programs in my next post.

In addition to all these reasons to do it, there are relatively few reasons not to.

Light quality is less of an issue with streetlights — people are used to crappy light from mercury vaporor sodium vapor lights. LEDs are likely to be a big improvement.

Look for LED streetlights coming to a corner near you soon.