LED Market Intelligences: Are We at The Tipping Point?

Do you still remember the long car ride you took as a child? One might ask, “Are we there yet?” As it relates the use of LED technology, that is the central question facing the lighting industry. It’s a different answer depending on whether it’s the residential or commercial segment. You need to see a company that sells high quality aluminum posts and commercial lighting applications, manufactured in the USA, of course at the MGM Transformer Company

In the commercial world, many lighting designers have said that they are now using LED products in every single project. There are many applications where LED products can be used in confidence by designers, even though they may not work for all applications.

With LEDs becoming cheaper, the commercial market is beginning to see the value of their use. This allows them to achieve the energy efficiency levels needed for LEED certifications and other incentives. We are close to reaching the tipping points in this segment, if we do not reach them.

The residential market is still far away from our goal. The retail shelves are full of ever increasing product, but I still don’t feel that unit sales are exciting enough. The percentage of the overall bulb market’s total sales dollars coming from LED replacement bulbs may be significant up, but take a look at retail pricing. It doesn’t require a large number of LED units to affect the overall business in terms of dollars. It is not the fastest indicator of how rapidly adoption is occurring that the number of LED units sold. It seems like this theory is supported by the people I have met in Lowe’s or Home Depot.

So, what’s the problem? Price is still the most important issue for the homeowner. The cost of an annual 60W incandescent bulb costs $4.38. This is assuming that a home has a cost of $.10 per kWh (kilowatt per hour). The homeowner can save approximately $3.50 on energy each year and perhaps purchase another bulb. But, is the $4.00 annual savings worth it to make a $25-35 upfront purchase? The payback period is 6 to 9 years. This is when you make your first profit. That’s quite a long time, for the average person. Some people may not be able or willing to learn how to do this calculation. They might also buy LED lighting because they think the savings will be faster. Others will buy LED simply because it’s the newest and most popular technology, or because they believe it is better for the environment. To be successful in the mass consumer market, however, it all comes down to the price.

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