• 4 minutes Will We Ever See 100$+ OIL?
  • 8 minutes Iran downs US drone. No military response . . Just Destroy their economy. Can Senator Kerry be tried for aiding enemy ?
  • 11 minutes Energy Outlook for Renewables. Pie in the sky or real?
  • 4 hours Shale Oil will it self destruct?
  • 2 hours NYT: Mass Immigration Roundups in U.S. to Start Sunday
  • 4 hours South Korea imports No Oil From Iran in June - First-Half Imports Fall 37%
  • 4 hours U.S. Adminsitration Moves To End Asylum Protections For Central Americans
  • 3 hours U.S.- Taiwan: China Says Will Freeze Out U.S. Companies That Sell Arms To Taiwan
  • 15 hours Rising air pollution and green house effect
  • 15 hours Starlink Internet Courtesy of Tesla
  • 1 day Panama revoked registrations of tankers flying under their flag that have not complied with sanctions. Most are Iranian tankers. Vessel seized in Gibraltar, Grace I, flying under Panamanian Flag. Registration revoked in May. England seizing justified
  • 1 day Is This The End of BBQ?
  • 7 hours Germany exits coal: A model for Asia?
  • 18 hours Oil Price Could Fall To $30 If Global Deal Not Extended
  • 2 days Alliance: Ford - VW Extend Multibillion-Dollar Alliance To Electric, Automated Cars
  • 13 hours U.S. Economic Expansion: Rich Get Richer
Alt Text

Top Source For Oil Demand Disappoints

India, widely considered the top…

Alt Text

An Unexpected Boon For Alberta’s Oil Producers

Canadian Light oil prices have…

Michael McDonald

Michael McDonald

Michael is an assistant professor of finance and a frequent consultant to companies regarding capital structure decisions and investments. He holds a PhD in finance…

More Info

Premium Content

Who’s Winning The Market Share War In Lighting?

Following the surprising decline in lighting manufacturer Acuity Brands (AYI), clean energy investors may be wondering what is ahead for the industry. The answer is that while the industry is seeing significant change, there are some serious challenges ahead as well.

For an industry that has remained mostly unchanged throughout the twentieth century, lighting has seen a remarkable amount of turmoil and transition since 2000. Incandescent bulbs have been the standard technology in most lighting applications for many years, but two new technologies have started to take dramatic share. While incandescent bulbs still held significant share in 2011 for instance, the trend continued to move in favor of new technologies up until 2014.

On January 1, 2014, U.S. law required new lighting efficiency standards which essentially banned the manufacture of many new incandescent light bulbs. That move, while pre-planned by Congress, was nonetheless remarkable because up to that point more than half of all 40 and 60 watt bulbs were still incandescent ones. The 40 and 60 watt bulbs were mainstays for home lighting use and so essentially the law changed the way that many people had to light their homes. The phase out of many standard incandescent bulbs was gradual starting with the uncommon 100 watt bulbs in 2012, and 75 watt bulbs in 2013.

While there are a number of new technologies that are competing for wallet share in the vacuum left by the departure of incandescent bulbs, the two most common types are CFL bulbs and LED light bulbs. Each type of bulb has advantages and disadvantages.

CFL bulbs, or compact fluorescent light bulbs, last about 8,000 hours versus 50,000 hours for LEDs and about 1,200 hours for traditional incandescent bulbs. CFLs use about a quarter of the power used by traditional incandescent bulbs but still about twice as much as LEDs. As a result, the cost for using CFLs is about twice the cost of running LEDs. And for most consumers, cost is what really matters with light bulbs whether in office applications or home applications. Related: Can Saudi Arabia Survive With Oil Below $60?

The downside of LED bulbs is primarily the cost. LED bulbs are also much better for directional applications like track lights than for applications like lamps, but diffusers help somewhat when facing the latter issue. Instead the bigger problem is that LED bulbs generally cost at least twice as much as CFL light bulbs.

At the end of the day, CFL bulbs are not as energy efficient as LEDs and over a period of several years, an LED bulb pays for itself in savings versus a CFL bulbs. As of 2014, LED bulbs held only a very tiny market share – less than 5 percent - in standard A19 conventional bulb applications (2.4 percent share), linear work lighting (1.3 percent share), and bay lighting (2.2 percent share). Only in outdoor lighting applications, where LEDs have considerable value given the difficulty in changing bulbs did the bulbs hold a 10 percent+ share (10.1 percent share).

That is an unfortunate reality, because if all CFL and incandescent bulbs were changed to LED bulbs, it would translate into nearly 5,000 trillion Btu’s of energy saved, which represents almost 70 percent of the energy used in lighting applications. Nonetheless, for many applications, upfront cost is a more important factor than energy efficiency over time. For instance, relatively few people live in the same house for a decade or more. As a result, buying premium bulbs which will literally last a lifetime is not economically rationale for many individuals. The same logic applies to many businesses who may be leasing space for five years at a time rather than operating out of a building they own outright. The reality is that in many cases cost still matters a lot, and until LEDs come more in line with CFL pricing, their market share is likely to remain low.

By Michael McDonald of Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage


Leave a comment
  • Hannan Ahmad on January 16 2018 said:
    Investors cannot mind it at all. The new lighting technologies will always take a lead due to their smartness, safety and adoptability features. For example, just look how the Aurora Enlite of UK has made waves of change within the local industry and now even looking forward to enter the global competition. http://www.meteorelectrical.com/lighting-lamps/led-lamps-lighting/aurora-enlite-5w-led-gu10-warm-white-lamp-3000k.html

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play