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Market Challenges

Solid-state lighting (SSL) has the potential to significantly reduce lighting energy use and slash greenhouse-gas emissions. DOE estimates that switching to LED lighting over the next 20 years could save $250 billion in energy costs over that period, reduce electricity consumption for lighting by nearly one-half, and avoid 1,800 million metric tons of carbon emissions. The energy-saving promise of SSL technology has particular market relevance given the ongoing transition to higher-efficiency bulbs, as mandated by the Energy Independence and Security Act of 2007.

Though SSL is still at an early stage of development, it is evolving rapidly, with new generations of devices introduced every few months. While many of these products can save energy and provide high quality lighting in a growing number of applications, and their overall quality is improving steadily, some of them fail to match the performance of the technologies they're designed to replace and may not meet the claims of their manufacturers. With so many new LED lighting products coming onto the market, it's not always easy to sort the wheat from the chaff.

Cost is another major consideration in evaluating LED lighting. Today, quality LED products cost more than conventional lighting products at the outset, yet lifecycle savings can outweigh the initial cost premium in applications that take advantage of LED's unique features – including directionality, controllability, long lifetimes, and, of course, lower power consumption. Ongoing reductions in cost and improvements in performance continually alter the cost/benefit equation for LED lighting.

Lessons Learned Guide Market Development Support

An earlier energy-saving lighting technology—compact fluorescent lamps (CFLs)—provides a cautionary tale on pitfalls that must be avoided for successful SSL market development. As documented in a study commissioned by DOE, Compact Fluorescent Lighting in America: Lessons Learned on the Way to Market, technical challenges and performance shortcomings with early products often violated the expectations of consumers, who were dissatisfied with the bulky size, humming, poor light levels, color rendition, and early failure of many CFLs. These consumer disappointments were compounded by misinformed retailers, lack of product performance standards, poorly designed utility incentive programs, and other missteps that, together with their price premium, delayed widespread market acceptance of CFLs for many years.

Accurate information about product performance is essential to preventing a similar pattern of violated expectations and commercialization delays with solid-state lighting and, in turn, to realizing its full energy-saving promise in general lighting applications. That's why DOE sponsors a wide range of market development support efforts designed to ensure that lighting buyers will have access to the impartial information needed to make sound decisions about whether, when, and how to apply solid-state lighting:

  • GATEWAY demonstrations showcase high-performance LED products for general illumination in a variety of commercial and residential applications and provide detailed analysis of the results, including energy savings data, payback, and user feedback.
  • LED Lighting Facts® promotes accuracy in reporting product performance by requiring manufacturers to commit to testing products and reporting performance results according to industry standards. Registered products are listed in a searchable online database along with product information, and LED Lighting Facts partners pledge to look for and use products that are registered with the program.
  • CALiPER supports testing of a wide array of SSL products available for general illumination. In 2012 the program began focusing on a single product type or application for each report issued. The idea is to determine the current state of the market for that product type or application, which enables DOE to analyze the results more rapidly and create a more useful tool for purchasers and manufacturers.
  • The Municipal Solid-State Street Lighting Consortium is building a repository of valuable field experience, data, and resources to significantly accelerate the learning curve for buying and implementing high-quality, energy-efficient LED streetlights. In addition to holding regional workshops, the Consortium conducts product demonstrations and has developed a number of tools, including a Model Specification for LED Roadway Luminaires and a Retrofit Financial Analysis Tool.
  • Standards development helps put the entire industry on the same page. To accelerate the development of needed standards for SSL products, DOE facilitates ongoing dialogue and collaboration with key standards-setting organizations. We also offer technical assistance in standards development, host numerous meetings and working-group conference calls to facilitate the work of these organizations, and foster greater coordination and collaboration among related efforts.
  • Better Buildings Alliance (BBA) specifications provide guidance and minimum performance requirements for key applications. BBA technology specifications are currently available for LED site lighting, high-efficiency parking structure lighting, and LED refrigerated case lighting.
  • Competitions encourage innovation in SSL products. The Next Generation Luminaires design competition recognizes and promotes excellence in the design of energy-efficient LED commercial lighting luminaires. The L Prize® competition is designed to spur lighting manufacturers to develop high-quality, high-efficiency solid-state lighting products to replace the common light bulb.