Better Lighting Through Quantum Dots

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Estimates Vary Widely on Long-Term LED Forecast

There has been a wide-range of estimates on the market size for LEDs in 2020. A frequently-cited Philips estimate has nearly the entire $100+ billion lighting market converting to LED solid state lighting. A recent McKinsey report sees $60 billion in SSL LEDs by 2020 while a Morgan Stanley estimate has the total LED market reaching $70 billion by the end of the decade. On the conservative side, Yole sees the total LED market reaching only $27 billion in 2020, up from $12 billion in 2011.

The reason for these wide fluctuations in market size are varying estimates of how much LED-based lighting will displace conventional lighting in residential and commercial applications. In the near-term, many countries have passed measures to phase out incandescent light bulbs for general lighting. The European Union began phasing incandescent lighting in 2009. In the US, the Energy Independence and Security Act of 2007 requires all general-purpose light bulbs that produce 310–2600 lumens of light be 30% more energy efficient, effectively banning incandescent light bulbs. The efficiency standards will start with 100-watt bulbs in January 2012 and end with 40-watt bulbs in January 2014. By 2020, a second tier of restrictions would become effective, which requires all general-purpose bulbs to produce at least 45 lumens per watt.

While efficiency standards underlie the SSL optimism, the big beneficiary will be compact fluorescent lighting or CFLs. Current CFLs already meet the 2020 US energy efficiency requirements and consumers are familiar with them. While CFLs often produce poor light and contain environmentally harmful mercury, they will be tough to displace with LED bulbs. Consumers won’t easily be swayed by a cost-of-ownership argument; purchase price will probably still be the principal decision criteria for home lighting replacement. CFLs are also easier to buy having benefitted from years of use; buying an LED bulb is still a bit bewildering for the average home owner (what’s lumen, I just want a 60-watt light bulb?). And, CFLs will also decline in price.

Another hurdle for SSL adoption will be LED and SSL lumenaire quality. According to recent Department of Energy (DOE) Lighting Facts report, 67% of current A4 replacement lamps on market fall below 450 lumens (40W equivalency), 56% fall below acceptable color quality. Only 2 commercially available LED reflector lamps offer comparable light output than 75W PAR 30 lamp. Another report by the DOE (CALiPER Summary report, April 2011) tested 33 LED-based lighting and found “the disparities between high performing and low performing products are striking.”

In addition prominent quality problems in SSL, the report also concluded “to be able discern whether an SSL replacement lamp would performance expectations, a consumer would have to highly informed.” Quality and consumer education also plagued the roll-out of CFLs, retarding the market for a nearly decade.

And the challenges faced with displacing low-cost CFLs appear will more difficult with linear fluorescents. The DOE Lighting Facts report found that LED replacements for 4-ft linear fluorescents produce on average one-half the light output and use more energy.

The SSL industry has a lot to overcome to achieve widespread penetration into CFL and fluorescent applications, the two largest lighting technologies in use today. While most observers believe it will ultimately occur, the speed of adoption is very uncertain.

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