It is often said that the least polluting energy is the one that is not consumed.

LED there be light: are you ready to replace your light Energy efficiency is often the most neglected measure in the 20/20/20 packAlessandro Leona, Milan office age. In this article, we will highlight one of the areas of energy efficiency connected to technology improvement (as opposed to changing consumption behaviours) namely, illumination using LEDs. Energy consumption for illumination can range from 10-12 percent of total consumption for households to 40 percent in the commercial sector. For example, in the US, around 750-800TWh per year is consumed in illumination about the same amount of electricity produced in the countrys 104 nuclear power plants. Half of this amount is consumed in the commercial sector; a quarter in houses, and the rest is split between industrial illumination and outdoor stationary lighting. Light sources can be divided by technologies in three main areas: Incandescent lamps, using a thin filament of tungsten, where luminous efficiency1 is lower than 10 percent, due to the fact that most of the energy becomes heat Gas discharge lamps, where light is produced by a electricity discharge in a mixture of gases, such as neon, high pressure sodium or metal halide, with lighting efficiencies ranging from 10-15 percent of the classic T5 lamp2 to 22-29 percent of sodium vapour lamps Solid state lamps, using semiconductor light emitting diodes (LEDs), where efficiency is rapidly improving up to 160 lumen/Watt, meaning a LED with this performance can produce the same illumination as a 60W incandescent light using only 7W. When it comes to energy efficiency and environment sustainability, incandescent lights are being progressively banned due to their poor conversion efficiency, while fluorescent lamps may be banned in the future because of their mercury content. LEDs may thus be the natural candidates to substitute conventional lights, due to their continuous and rapid growth in performance backed up by a high product lifetime and by the relatively low impact on the environment.

bulbs?

1 Overall luminous efficiency is the ratio of total luminous flux emitted and the total amount of input power total. This measure accounts for input energy that is lost as heat or otherwise exits the source as something other than electromagnetic visible radiation. The maximum luminous efficiency of 100 percent is the ideal green light (555nm), with luminous flux of 683lumen/watt 2 T5 is the common 5/8-inch diameter neon tube

Outdoor Stationary Industrial Residential Commercial 0 100 200 300 400 Incandescent Fluorescent High Intensity Discharge

Shares of energy use by lighting technologies in the US

100% = 760TWh

Source: US Department of Energy

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Luminous efficiency trend of different light sources

Luminous efficiency (lumen/W) 200

150

LED

100 Fluorecent 50 Incandescent 0 Source: Lumileds 1920 1940 1960 1980 2000 Halogen Reflector

White LED

2020

LEDs will be experiencing diminishing cost thanks to volume effects. Haitz law (equivalent of Moores law for semiconductors) predicts that every decade the LED light output increases 20 times (around +35 percent every year), while the cost decreases by a factor of 10 (-25 percent each year). According to the US Department of Energy, this cost reduction trend suggests that white LED luminous efficacy and costs should compare to compact fluorescent lights by 2013. We believe this evolution will determine a rapid growth for the LED lighting market. Overall, the global market for lighting fixtures (excluding automotive and LED television backlighting) was worth around 45-50 billion in 2009, according to Philips and other analysts. Of this, 20 percent is related to lamps and replacements, 70 percent to fixtures and the remainder to electronics and controls. Split of lighting fixture market according to Philips
Total market size: 45-50 billion

Lamps Lighting electronics

HOSPITALITy HEALTHCARE EnTERTAInMEnT

Applications/luminaires
InDUSTRy OUDOOR HOMES OFFICE RETAIL

Source: Philips

In 2009, the market related to LED lighting was only around 1 billion, but Philips projects a very fast take up of share over the total: by 2015, the LED market could be worth 55 billion, with a share of 50 percent of the total lighting market. This rapid growth could be fostered by a combination of factors, such as: The rapidly increasing luminous performance, which has gone above the 100 lm/W that make LEDs good substitutes for compact fluorescent lamps The continuous government attention to energy efficiency and non-polluting materials (such as the mercury in compact fluorescent lamps) The proliferation of lighting fixtures and retrofits based on LEDs that are being spread across the commercial sector (which alone accounts for half of the consumed energy for illumination) The progressive reduction in LED prices, due to scale-volume effects.

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In order for LED technology to replace our old-economy light bulbs, the industrial and scientific communities will have to widely promote the main advantages over the current solutions and commercialise the product with a total-cost-of-ownership concept. In the short term, LED lighting may be quite expensive as an initial investment, but taking into consideration the longer life (50 times that of a conventional incandescent light bulb) and lower consumption (20 percent of energy input to obtain the same level of illumination), the payback could be reached in less than two years, without the need for government incentives. If we compare three lamps of almost equivalent lighting flux and their costs, the energy cost over the year for the incandescent light is enough to repay for half of the equivalent LED lamp, which, if bought for a newborn child, will last till his graduation day!
Lamp Type Cost () Lifetime (hours) Lifetime (years@5h/ day) Power (Watt) Year cost for power () Year cost including replacements ()

Cost comparison of different lighting technologies

Energy cost 0,22/kWh

Incandescent Compact Fluorescent LED

0,7 - 1 7-8 50 - 60

1.500 10.000 50.000

0,8 5,5 27,4

70 12 6,3

28,1 4,8 2,5

29,1 6,2 4,5

One might think that compact fluorescent lamps (CFLs) may be a good intermediate solution, given their more accessible costs, but we believe that further improvement in LED cost (with prices reducing by half over the next two years), together with increasing sensitivity over environmental issues (CFLs have to be correctly disposed, due to their mercury content) and strong marketing of the total cost of ownership of lighting technologies, will help the LED retail market rapidly grow. The use of performance contract schemes could be helpful in speeding up the adoption of LEDs in large-scale retrofit projects. Energy Service Companies (ESCOs) could finance the upfront cost of designing the best solution together with clients, and implement the replacement/retrofitting. The energy saving benefit could be initially divided between the client and the ESCO, in order to repay its investment and guarantee against risk. Another factor that may help the fast adoption of LEDs is the continuous dissemination of technological achievements, case histories and relative energy savings by renowned industry players, academic institutions and governmental agencies. Value Partners is watching this sector very closely and with growing interest, given the possibility of a rapid, self-sustaining growth, as opposed to many other green technologies, which are strongly dependent on incentive schemes.

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