LEDs Lead in Lighting Efficiency

In Germany and across Europe, light-emitting diodes, or LEDs, are becoming more ubiquitous in public areas, saving their users thousands of dollars in energy costs.

Langen, a town on Germany’s North Sea coast, became the first place in Europe to replace its 2,583 streetlights with LEDs at a cost of $2.2 million, reports Reuters. The town now spends about $104,000 a year to run its streetlights, 60 percent less than it cost to run them with incandescent bulbs.

LEDs need replacing about every 12 years rather than every three to five, as required by conventional lamps, so labor costs have been reduced by 94 percent. Even though the Philips lights Langen uses are about 75 percent more expensive than regular streetlights, the town expects to reap savings that make the price worth paying. Langen funded the change with a low-interest loan from state development bank KfW.

The U.S. is also investing in LED technology. The Department of Energy (DOE) recently announced $10.1 million in new investments to drive cost-competitive LED lighting. The funding will go to five companies who will match the R&D money, to be used specifically to lower the price and improve the quality of LEDs and OLEDs (organic light-emitting diodes.)

According to a new report by the Energy Department, LED lamps and fixtures installed in the U.S. have increased ten-fold over the last two years – from 4.5 million units in 2010 to 49 million units in 2012. These installations, mainly in public places, are expected to save about $675 million in annual energy costs. By 2030, LED lighting is projected to represent about 75 percent of all lighting sales, saving enough energy to power approximately 26 million U.S. households.

Cree Inc., of Durham, NC, will use its $2.3 million DOE investment to develop a modular design for LED lights that can link together multiple units to fit larger areas. Eaton Corporation (NYSE: ETN), of Menomonee Falls, WI, plans to develop a manufacturing process that streamlines the LED fixture design and removes unnecessary materials and parts with its $2.4 million investment.

OLEDWorks, LLC, of Rochester, NY, will take its $1 million DOE investment to develop and demonstrate new spray-printing equipment that reduces overall manufacturing costs in OLEDs. The company recently raised Series-A funding from private investors in April and plans to start shipping its panels in the second half of 2013.

Philips Lumileds (a division of Philips Lighting), based in San Jose, CA, with a $1.8 million DOE investment, will develop an alternative to the standard flip-chip device that grows an LED facedown on the sapphire substrate, reducing manufacturing cost.

PPG Industries, Inc. (NYSE: PPG), based in Pittsburgh, PA, plans on creating a cost-effective OLED manufacturing process with its $2.3 million investment.

While governments and public buildings are starting to use more LEDs across the globe, people are still concerned about the bluish appearance may LEDs give off. There’s no need to worry, says Businessweek, which reports that the Mona Lisa, which is hung in the Louvre in Paris, is lit by LEDs.

The lighting technology at the Louvre is part of a multiyear contract with Toshiba Lighting & Technology, which is now installing LED lights in the world’s largest museum. Curators at the Louvre spent months with Toshiba technicians to find lighting with the right combination of intensity and color to showcase the iconic painting.

The lighting was adjusted to minimize cold blue tones, and museumgoers seem happy with the results – or haven’t noticed.

According to Reuters, the price for these high-tech bulbs, which are up to eight times more efficient than standard incandescent bulbs, are ten times more expensive. That means that are still prohibitively pricey for consumer use.

The more expensive a blub is, the longer it needs to burn to make it worth the price, which is why it makes sense to use them in spaces where lights must burn constantly, such as streets, hospitals, and public areas of hotels, but not in homes where lights are on for only several hours a day.

Consultancy McKinsey estimates that an LED bought for home use in 2011 will take until 2025 to pay off. By 2020, LED prices are predicted to drop and it’s believed that efficiency will have improved to the point that it might only take six months to pay back a consumer for its cost.

Lighting companies are trying to cut LED prices via technology using silicon instead of sapphire and rare earths, although silicon-made LEDs don’t perform as well as sapphire-made bulbs.

When consumers do start to buy LEDs more regularly, they will likely choose basic bulbs, according to Businessweek, even though the LED industry is developing and selling advanced systems that have multiple functions. Toshiba has developed store-lighting systems that create an ambience that encourages customers to shop longer. Its office lighting makes workers feel more energetic.

Even so, McKinsey sees the LED market growing to almost $86 million by 2020 from 11 million in 2011, boosting sales at leading suppliers like Philips, Osram, and Cree. This is not surprising, since recent EU legislation will halt the sale of mercury street lamps starting in 2015. The U.S. has similar legislation in place.

To read the Reuters article cited in this story, click here

To read the Businessweek article cited in this story, click here

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