Insights into the forces shaping our industry.

by Ted Konnerth

I returned from Strategies in Light last week after three days of conferences, technical presentations, booth meetings and client visits spinning with the usual overload of information. SiL is the largest conference dedicated to High brightness LED technology. As such, it’s a conference on ‘emerging trends’ in the electrical industry. Part of the presentation always includes macro-economic summaries of the market for LED. The biggest number was that the market grew 93% last year. That was not a typo, it was 93%, globally, at a total revenue of $10.8B. The $10.8B includes all HB LED applications, of which backlighting for TV’s, laptops, mobile phones is the majority usage. The revenues assumed for commercial lighting applications (fixtures and lamps) were $900M, in 2010. The conference is managed by Pennwell and they have exhaustive research in the LED space, built from the individual dies and reactors up. Where the numbers get murky, are at the market level projections.

The projection for LED usage in commercial lighting is an average annual growth rate of 39% through 2015. This would put LED commercial lighting sales at $4.5B by 2015, four years away. The adoption curve for commercial lighting though will be, and is, far faster than the conference numbers demonstrate. There are several reasons for the murkiness of LED adoption within commercial lighting:

1. There are over 1400 lighting manufacturers in the US alone. Of those, over 1200 are privately held, so numbers reporting is obscured and unavailable.
2. LED adoption has occurred primarily at the end-user level, not through the traditional electrical industry channels, so tracking of LED success is virtually hidden from any of the traditional players; distributors, manufacturers and even contractors.
3. LED sources include over 400 LED manufacturers, most of those from Asia, some working on a strict import model, others working on an OEM-based market and still others working on a collaborative basis through licensing agreements, or other financial relationships.

LED is already ‘here’. The trends for the overall electrical energy transcend pure LED sales, though. The implications of adoption of LED, or SSL (solid state lighting) is that the system is basically DC in nature and coupled with low power consumption lends itself to incorporation into new energy solutions. The possibilities are exciting for LED full adoption, such as:

· Emerge alliance. This nascent organization is developing DC distribution policies and systems to integrate DC power distribution into large areas of DC consumption; primarily large data centers, where hundreds of servers can be run on DC current and save the power losses associated with rectifying and/or inverting AC/DC. This model has proven to be an effective approach, although a lot of work is still required to achieve conformance on standards, etc. But consider the potential for residential DC power supply: attached to solar panels, distributed through a residential project to supply all DC devices; computers, TV’s, sound/security systems, and now LIGHTING, makes the application feasible. Plus it caters to the growing ‘off-grid’ movement. RV’s already run appliances on DC, so those products could also be adapted for a DC distribution. The day will arrive when a residence will come complete with two panels: AC for larger power needs, including power equipment and stoves, heating coils, etc. and DC.

· Off-grid lighting. There are millions of trails, landscape applications, rural environments where lighting could be feasibly and economically supplied without trenching power to the site through the use of SSL, with its low current requirements, and a solar panel and battery system.

· Death of incandescent. It’s here, we just don’t quite know the funeral date yet, but incandescent isn’t a good system. It creates more heat than light, the labor costs associated with changing them and the energy to drive them no longer make sense. So now it’s only a matter of time before they go away. Any incandescent application with long burning hours is an easy one to replace now; chandeliers, exit signs (they’re still out there), quartz floods, etc. they’re all an easy target for immediate replacement.

The issues embedded within the transition to LED are complex and worthy of a far lengthy discourse, but installing and controlling SSL will eventually become the province of those trades who install electronics, not electrical systems. So the future of lighting as an electrical component will go the way of premise wiring; either adapt to an electronics certification process, or abdicate lighting all together.

It’s an exciting time in the industry; the people who will seize that opportunity will be the next generation of ‘players’. Those who insist on keeping it the way it’s been for 50+ years, will be selling wire and panels for DC.