Without Quality – LED Retroifts Will Fail

Posted: January 2, 2014 in General Commentary, Uncategorized
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The recent article: LED Bulb Efficiency Surges, But Light Quality Lags states very well the findings of the DOE and others reviewing LED retrofit lamp performance. While well stated, there are severl missing dynamic issues in the conversation that need to be included if LED is to overcome the failure of the CFL to capture the consumer market it so desperately seeks to dominate.

While efficient, there has been no great interest in the consumer market to lamps with poorer quality at higher prices.

While efficient, there has been no great interest in the consumer market to lamps with poorer quality at higher prices.

The CFL lamp has failed in the consumer market for these reasons:

  1. Light quality is poor in comparison to the far cheaper incandescent lamp. This includes color quality, distribution (photometric) pattern is poor (flood type products)
  2. Appearance and fit of the product into existing fixtures – i.e. ugly to look at, stick out of fixtures, create dark spots in shades and fixture diffusers, etc.
  3. They did not last as long as advertised. When switched frequently, the life of a CFL screw base product can be shorter than a long life incandescent. In outdoor cold climate environments, some fail within a few months. In down-lights and enclosed fixtures most fail even more quickly.
  4. They cost too much compared to incandescent of higher quality
  5. They save some energy, but have so many other liabilities the consumer does not take this seriously.
  6. Flickering starts, flicker under dimming, and 120Hz strobe effects from cheap ballast designs
  7. Slow to warm to full brightness – often taking longer to get up to full light than many products are on for in many rooms (pantry, closet, hallway, etc.)
  8. Mercury disposal concerns for some

So, what you have an expensive and decidedly inferior quality product in all aspects – except energy saving – that is hazardous to dispose of when it fails before its rated lifetime. Since the life of the lamp was used more frequently than energy savings  to rationalize the cost, shorter than promised life meant they are not a good value. The end result: the consumer buys a few of the lamps to try, but finds them distasteful, so either never re-purchase, or try another brand before finally giving up and going back to the readily available, lower cost, higher quality incandescent. Banned or not, as long as they can find them on the shelf, they will buy them. In fact, today, packs of (24) 43W replacements for 60W lamps are showing up on store shelves for less than $30.00, delivering energy savings of 25% for a premium of less than 20% – a very good deal for those not committed to any specific technology.

At less than a dollar with high color rendering, easy dimming, and 2000 hrs of life on tap, its easy to see why the resi market remains in love with this old technology.

At less than a dollar with high color rendering, easy dimming, and 2000 hrs of life on tap, its easy to see why the resi market remains in love with this old technology.

The average time a lamp is burned in residential sockets is 650hrs per year. The electric bill sent to consumers does not indicate how much energy was used in lighting. If it did, the data would reveal that while 27% of all electrical lighting is used in the residential sector, the specific amount of energy used for lighting within most homes is just 11%. That means for an average electric bill of $120, lighting comprises only $13.30 of that. Saving 70%, or $8.40 per month is a relatively meaningless amount, considering the remaining $111.60. It is very likely that the variation from month to month, based on heating/cooling, hot water use, appliance use, and other variables will be greater than the total amount spent on lighting electrical energy. This means that even if the savings were realized, they would be invisible to the bill payer. So, what this means is, that while the DOE and utilities see the 27% of electrical lighting energy consumed by the residential market as significant, the individual power users do not share this perception – even slightly. Most consumers spend 5 times more every month on soft drinks than they do lighting their homes.  If it were about saving money, cutting soft drink consumption by 10% costing nothing, will produce more monthly savings than changing all of their lighting to LED technology to save 70% – which would today cost them a minimum of $660.00 up front (55 avg # of sockets x $12avg per lamp). The soft drink reduction is a 100% payback in 0 months proposition, the payback for a $660.00 expense on LED lighting is over 5 years. Changing to CFL would cost roughly $200 – creating a payback of 2 years – assuming the lamps actually last that long. Bottom line: 1.) The amount of money spent to light a home each month is so small it is irrelevant, 2.) At 650 hrs, even a standard long life incandescent (2000hrs) will last over 2 years, so replacement convenience is irrelevant, and 3.) The total energy saved for LED or CFL retrofit is significant statistically, but insignificant in real individual end-user dollars, so is irrelevant.

While the DOE and many marketers believe that consumers care deeply about energy saving, and are willing to sacrifice all other decision factors to attain that benefit – in this very real world, this myopia about energy savings-as-market force borders on psychotic. As I’ve noted, consumers have no reason to care. If they need to save money from lighting energy consumption, they can simply turn lights off, or install lower wattage lamps at no or minimal cost – while achieving 75% of the energy savings of an LED or CFL retrofit. Even the “lamp ban” (which does not actually exist), will produce nothing more than a movement to energy saving incandescent replacements at minimal cost, with virtually no real motivation to consumers to spend even $5.00 for an LED (assuming one actually existed) to save a few watts more. While this makes some sense to comply with laws in some states forcing such behavior, or in others facing high power rates; for the rest of the country price is first and foremost. Walmart is not the giant it is because consumers are conscientious shoppers, Walmart exists because consumers are cheap to the point of being self destructive. Consumers will buy junk imported lawn mowers, power tools, appliances, electronics, etc… that will fail in a few short years (often months), then buy another to replace it, and then another,then another – over shopping for a high quality product that will last the rest of their life. The degradation in product quality over the last 40 years, to serve this low-cost consumer model is palatable. Appliances that once lasted decades now last mere months. When it comes to products with no differentiating value, cost is the only value the consumer uses when making choices. Even the once powerful brand value is fading, as more and more brands are caught red handed private labeling the same junk offered by no-name brands at a lower cost.

While a good effort in effiency, the color is 80CRI, and the odd bulb shape and metal base can cause fixture appearance issues. Consumers are also not impressed with the yellow off-state appearance.

While a good effort in effiency, 80CRI, and the odd bulb shape and metal base can cause fixture appearance issues. Consumers are also not impressed with the yellow off-state appearance – and the price is too high.

So, that all said, let’s put to rest the idea that LED energy saving is holding any water with the masses in the consumer market space. Consumers do not do life cycle cost analysis, so using ROI as a sell point with price conscious shoppers who rarely read packaging, let alone installation instructions, is a dead end street. The commercial market is a completely different playing field where a quality product can realize success, because the customers do make rationalized life-cycle buying decisions. While some will argue that we must educate consumers to the advantages of energy efficient lighting, I will argue we have a much stronger case for educating consumers on the issues of bottled water consumption, plastic waste management, use of disposable cheap products over durable quality products, and proper tire inflation – all with far greater and more profound result than saving lighting energy. Oddly enough, the arguments for education seem to miss that commercial customers also go home at night, meaning they too are consumers. Yet, in survey after survey, commercial decision makers reveal they rarely apply the same lighting product buying decision making at home as they do at the office. If these educated consumers don’t see the case, then why is it believed that the general population is going to look up from their smart phones, video games and action movies long enough to give it a moment’s thought. I am not trying to be pessimistic here, just realistic.

Now, to revisit the quality issue. Since there is little to no motivation to save energy unless forced into it, any product that delivers poor light quality has no chance at all. This is exactly the path CFL went down, and will produce exactly the same result – 28 years of noise resulting in less than 20% of the market, against a 100 year old obsolete technology that is superior in quality at a fraction of the cost. On its current trajectory, LED retrofit lamps will have to be mandated by federal and/or state law to realize consumer level success, and that forced business will simply go to the producer offering the lowest prices. That story ends with a lowering of total lighting quality, enabled by government mandate, serviced by the lowest cost import producers who will use those mandates as a license to pursue predatory marketing of sub-standard products to consumers with no choice but to comply. Yeah, that sounds like a good idea….

Now, let’s look for a solution in this rather dire looking situation. First, we know that the CFL takes a beating for its poor light quality and shorter than promised life. So, let’s make LED products that deliver significantly higher light quality (95+ CRI minimum, pleasant color and tone, attractive envelopes that work in fixtures), that also last significantly longer with reliability on the order of 100% (unlike CFL, which has a reliability factor of perhaps 40%). That accomplished, we need to find other differentiating values that set LED above and beyond the reach of both CFL and incandescent. The concept of CCT shift when dimmed is interesting to some degree, and superior to CFL, it only delivers what one can get from a $0.90 bulb, at a cost that is higher than a regular LED replacement, so while its cool, is probably not enough on its own to get the job done. The idea of wireless control is also interesting, but hardly a mainstream demand waiting to be filled. In fact, both of these concepts will serve only to slice the market into layers, like lite beer, with a small impact on actual total sales.

This is where we come to a significant impasse. While there are a lot of ways to make solid-state products cooler, none are well suited to retrofit lamps. One issue all parent run into is kids leaving lights on, so automatic controls make sense. Problem is, this really won’t work in a light bulb, is already available on the market now and now put to use, and makes sense no matter what technology the lamp is – so is not an LED thing at all. One could make a case for applying wireless automatic controls to interact with enabled lamps, but the costs would be higher than what is already available, not being employed now.

While it would be great to make really smart light bulbs, the question is whether anyone really wants them. iPhones/Pods/Pads are wicked cool devices to be sure. I don’t personally believe that we can transform lighting, to that level of consumer frenzy. The real paradox is that when a consumer is looking for a replacement lamp to put into an old fixture – they are looking to hold onto the past or existing fixture, and not a transformation to something more advanced. If they wanted advanced, they’d be looking for replacement light fixtures, not simple screw-in replacements. So, it is likely that the dynamics that drive customers to retrofit lamps preclude and pre-qualify the customers lack of interest in any substantive change. Thus… we return to qualitative issues.

All this put together, it is quite simple where retrofit lamps must go in order to succeed:

  1. Light quality must be equal to incandescent (95CRI+, 2700K or 3000K, without being pink, magenta or greenish in hue) and significantly superior to CFL to set the LED product well above the CFL as a preferred choice. Light quality, must be obvious and well marketed, demonstrated and delivered in retail outlets.
  2. Service life of the product must be significantly longer, in actual delivered and in-use experience than any other technology the consumer has had experience with. In this case, long warranties with simple in-store replacement will go a long way to remove the bad taste many consumers have for promises made with the CFL lamps. Service life should be long enough they forgot when they purchased the product – so lets call that 5 years. So, 35,000hrs should be more than adequate. Any greater life claims will lack credibility with customers who have seen so many 10,000 hr lamps fry in 2,000 or less. Claims of 20+ years are pointless and perceived as marketing hype – let this be the hidden delight in product experience, if it even exists (power supplies are very unlikely to last that long).
  3. Bulb shapes, scale, and luminous surface areas must match incumbent lamps being replaced to avoid undesirable and unattractive application issues.
  4. Photometric performance of reflector lamps must perform as equals to existing lamps in both metric and appearance measures, no hot spot centers or multi-dot images, etc…
  5. Lamps must be instant-on, operate in cold and warm environments, not be limited to open fixtures only, be usable in multiple lamp pendants and ceiling fixtures, and survive enclosed shower lights, outdoor pot and wall lights, etc…
  6. Dimming lamps must dim with cheap incandescent dimmers from 5% full light output to 100% with no flicker or odd effects.
The R30 lamp is not much different than the A-line in cost sensitivity and quality.  That makes this nice lamp over-priced and too poor in color performance to make a serious dent in this segment.

The R30 lamp is not much different than the A-line in cost sensitivity and quality. That makes this nice lamp over-priced and too poor in color performance to make a serious dent in this segment.

Deliver all of this, and the only remaining hurdle is cost. This comes down to easy to understand, simple economics that can be represented on a display box. Like the commercial market, any promises of paybacks beyond 5 years will be seen as useless. In fact, paybacks beyond 36 months will likely have no impact. So, that said, with operating hours of 700 hours per year, the average energy cost of $0.11 / kWh, energy saving of of a 9W lamp to replace each 60W incandescent (85% savings), the price of the lamp must be no more than $11.00. This is exactly where the Cree lamp sits today from Home depot… although it misses some of the other critical marks getting there – 80CRI is not going to cut it in the long haul, as an example. The TW version of the lamp is better, with its 93CRI, but its pricing today is just short of insane.

The Cree LED A- lamp does indicate that there is a path to success, in time. If the forward plan is to increase quality while reducing costs, delivering something like the Cree TW A19 replacement for around $10.00, marketed in the stores well – the LED retrofit lamp business has a chance of capturing a small portion of the total market. It will never compete with incandescent energy saving lamps with the majority of consumers, until power rates are at least double what they are today. And this is where we run into another obstacle. With the number of LED retrofit lamp producers in the market now numbering in the dozens, splitting what will likely be a minority share of the total market, competitiveness will cause more focus on price over quality, as this is the typical sales/marketing approach in manufacturers attempting to dominate the market. This will decrease the focus on quality and increase the attention to pricing, which is exactly where we find ourselves today in both LED and CFL retrofit businesses. This is unfortunate, as the LED side has far greater potential for solving the qualitative side than CFL.

The Cree replacement lamp is hitting on more cylinders than most. It's price is right, it shape is acceptable. If only its color quality was better...

The Cree replacement lamp is hitting on more cylinders than most. It’s price is right, it shape is acceptable. If only its color quality was better…

This brings me to a near term conclusion and recommendation. I suggest that LED retrofits are not yet ready to approach the incandescent market directly, but is poised to wipe the CFL off the market landscape, and is where it should focus 100% of its energy. If the qualitative issues and life issues of CFL are addressed, there is a greater opportunity in taking the CFL off the market in the next few years than there is in making major headway against the incandescent consumer grade lamp space. This applies also to the hospitality and retail markets equally, as the same qualitative issues that cause the CFL to be disliked there apply, and the economics in decision making is similar. The one small snag here is that in hospitality markets, installing expensive Edison screw base lamps in hotel rooms leads to theft, so there may be a need for some novel mechanical feature added for that market to avoid this.

In time, as the technology and costs come down and the market learns to trust solid-state and LEDs over CFL, and energy prices increase, and codes/laws become more directive in reducing incandescent lamp use, LEDs will eventually be able to lead the way into the bulk of the incandescent market. However, in my opinion, this will demand the quality be improved and costs trimmed below what is imaginable today. With that, it will be at least 3 more years before LED replacement lamps can be said to be the preferred source against CFL. It is equally likely that another decade will pass before the incandescent lamp is threatened by any real degree by the intrusion of LED in the residential consumer marketplace. For every year that low quality products dominate the LED market space, add two years to the time of full adoption. For every consumer turned off, it takes two to gain penetration – one to replace the one turned away, and another to grow the market. For this reason, quality is not a small issue, it is the core issue, and will define how the LED retrofit lamp market plays out.

The Philips PAR style lamps are nice performers, but are still not hitting the quality marks fully, so the price premium becomes a serious issue.

The Philips PAR style lamps are nice performers, but are still not hitting the quality marks fully, so the price premium becomes a serious issue.

Comments
  1. Interesting article. With so many issues around the design, efficiency, and light quality of CFLs and LEDs in the residential sector, I wonder why we haven’t taken a step back to question whether it is true that CFLs and LEDs will lead toward a good form of progress in the home. What do you think?

  2. Dennis M. says:

    Kevin –

    A well written summary of they way things are & the way that they’re going-
    My advice to the whole SSL industry … concentrate on Organic Light emiiting
    products like OLEDs and OLETs. The SSL wth ILEDs is starting to look like a dead end-
    or at minimum a less than perfect route to take.

    I wonder if people (consumers) will want to keep putting up with crappy LED retrofits
    when they’re offered a better genre of SSL .

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