The two events had nothing to do with one another, and yet they are inextricably linked. I am an inveterate coupon clipper and in the latest mailer from BJ’s Wholesale Club (my big box savings store of choice) I noticed an eye-popping deal on LEDs—8 60 watt-equivalent bulbs from Sylvania for $19.99, or roughly $2.50 apiece. The next day, GE announced that it planned to stop manufacturing compact fluorescent lamps (CFLs) and focus instead on LEDs.
The market never really took to CFLs, for understandable reasons noted in my household as well: Most of them could not be used with dimmer switches, they generally took a long time to “warm up” to their claimed light output and the light itself was harsh, like the traditional tubular fluorescents that CFLs evolved from and not the soft light of old-style incandescent bulbs. Still, they were significantly more efficient than traditional incandescent bulbs and sales climbed steadily. According to DOE data (see chart below), by 2014, just two years after federal rules took effect that essentially served as the death knell for incandescent bulbs, CFLs accounted for 46 percent of all installed A-type lamps (the screw-in variety that make up the bulk of installed residential lighting). But that clearly was the high-water mark for the twisted CFL.
In GE’s Feb. 1 announcement that it was phasing out its CFL production, the company said that CFLs’ market share (for all applications, not just A-type lamps) had fallen to just 15 percent in 2015, down from a high of 30 percent. Powered by a sharp drop in prices during the past several years, GE continued, LED sales have surged—rising 250 percent in 2015 alone. The growth has been so significant, GE said, that “LEDs now account for 15 percent of the 1.7 billion bulbs sold annually in the United States.” And there is no end in sight to this market transition, GE wrote, predicting that LEDs will account for 50 percent of the lighting market by 2020.
While GE was the first to boot CFLs, other manufacturers are almost certain to follow suit since the current generation of bulbs will no longer qualify as an Energy Star product when even-tighter federal lighting efficiency standards take effect in 2017. Given the sharp and continuing drop in LED pricing, plus their many technological advantages—their instant-on quality, long operating life, high efficiency, excellent light quality and connectibility—few, if any, manufacturers are likely to invest the money needed to bring CFLs up to the new standards.
Good, but not good enough, might be an appropriate epithet for CFLs. They tried, but they couldn’t.
LEDs, on the other hand, work, and work well—and for an ever-expanding number of markets. My favorite example of this is from a recent NASA video about growing vegetables on the International Space Station. The video, which can be found here , highlights the role that LEDs can play in agriculture—a market opportunity that has not been lost on a number of entrepreneurs.
In space-constrained Japan, GE helped launched an indoor farm that grows lettuce 2.5 times faster than conventional outdoor agriculture, while cutting waste to just 10 percent (compared to upward of 50 percent outdoors) and water consumption to only 1 percent of conventional outdoor farming. The trick? LED lighting.
U.S. produce companies have jumped into the market as well, with FarmedHere, a Chicago-area company already running a 90,000 square foot facility growing greens and herbs and having ambitious expansion plans, and Indiana-based Green Sense Farm touting itself as the country’s largest indoor vertical farming company.
The inroads LEDs are making into agriculture are largely coming at the expense of conventional high-pressure sodium lamps that have traditionally been used in greenhouses. According to data from GE, LEDs are significantly more efficient than HPS lamps—with LEDs converting about 50 percent of their energy to “plant usable light” compared to just 30 percent for HPS bulbs. “That,” GE says, “translates into significant energy savings: it cost four times more to produce the same amount of fruit with HPS lamps than LEDs.”
Much as LEDs have given the boot to CFLs, a similar transition may be on the horizon in the horticultural sector. Navigant Research said late last year that it expects sales of LED horticultural luminaires “to experience astronomical growth over the next five years as both the total amount of horticultural space and the adoption rate of LEDS increase rapidly. Unit sales are forecast to grow between 2015 and 2020 at an 83.3 percent compound annual growth rate.”
In some regions of the U.S., Navigant continued, LED sales will “make up more than half of new horticultural luminaire sales as early as 2017.” Increasingly, LEDs are “the lighting technology of choice in a growing number of facilities,” Navigant said. In particular, the lights greatly improve the profitability of indoor farming, said Jesse Foote, a senior research analyst at Navigant, which is “leading to a boom in…indoor food production facilities.” [The press release from the Navigant report, LED Lighting for Horticultural Applications, can be found here.]
Increasingly, LEDs are the technology that can. Stay tuned for the next evolution of this revolutionary lighting technology.