As the Incandescent Bulb Ban Approaches, Opportunities Should Abound for LED Lighting

Although the U.S. ban on the sale of some forms of energy-wasting incandescent light bulbs is not set to begin until January 1, 2012, at least one international retailer has already begun to phase out incandescents, marking what may be a new era of opportunity for general LED lighting applications.

In June, Sweden-based IKEA, a retailer of home furnishings and household items, announced that it would stock few incandescent light bulbs in its 37 U.S. stores beginning August 1, 2010 and stop selling nearly all forms of incandescent lighting by January 1, 2011, a full year ahead of the earliest mandates set forth by the United States’ Energy Independence and Security Act of 2007.

"IKEA is committed to integrating sustainability into all IKEA strategies and practices in the entire product life cycle. We also believe our customers are looking for every day environmentally responsible solutions for themselves. Eliminating incandescents is a simple way to lead the charge for IKEA customers to use energy-saving light bulbs," said U.S. IKEA President Mike Ward in an official statement.

Positive Publicity for LEDs

IKEA’s announcement and similar forthcoming statements from other retailers and government agencies is likely to focus consumer attention on more energy efficient general lighting solutions like LEDs. For example, along with its announcement that it would stop selling incandescents, IKEA pointed out that the LED-based lights it currently sells “use 70 percent less energy and burn at least 20 times longer than a standard incandescent bulb.”

Effectively, the IKEA statement is communicating the LED’s value proposition to a consumer base that – in spite of several news stories and studies demonstrating the benefits of LED lighting solutions – is largely uninformed about the technology. It may now be the case that retailers like IKEA, governmental agencies, and organizations will invest marketing dollars into educating the public about the benefits of lighting solutions like LEDs.

This sort of marketing is important for retailers, since at least initially, consumers may be surprised by the greater upfront costs associated with LEDs or even compact fluorescent lighting (CFL) relative to the familiar incandescent bulb.

As Awareness Grows, So Will Opportunity

As consumers become more familiar with LEDs, it should become easier to sell or market LED-related general lighting products, creating new opportunities.

These opportunities could abound for lamp makers, appliance makers, and even residential lighting installers and homebuilders, who may no longer need to explain the life-cycle benefits or energy savings associated with say, using LED modules or fixtures for household lighting solutions rather than more traditional options or even compact fluorescents.

This will be especially true if LED lighting becomes less expensive than comparable CFL bulbs, which the U.S. Department of Energy estimates will, in fact, be the case, perhaps as soon as 2013.

According to estimates from Cree, Inc., Philips Electronics, and Morningstar, LEDs presently account for one percent or less of the $60 billion general lighting market but might enjoy a 40 percent or more share of that market in just the next 10 years, largely due to the expected increase in consumer awareness and the aforementioned incandescent lighting ban.

Pushing Incandescents Out

The U.S. federal ban on incandescents, which was part of former President George W. Bush’s energy independence efforts, generally sets efficiency standards for incandescent bulbs that begin to take effect in 2012 and reach full effect in 2014.

The legislation also sets requirements for monitoring consumer awareness and education and product labeling. In the U.S., the movement toward LEDs is expected to reduce national power consumption by as much as 1,400 terawatts over the next 20 years, saving an estimated $120 billion, according to the U.S. Department of Energy.

The European Union enacted similar regulations last year, ordering retailers to stop selling and importing incandescent bulbs, but marketing associated with the EU ban has, for the large part, aimed consumers at CFL bulbs.