Navigant Research Blog

LEDs Still Gaining Efficiency

— August 14, 2013

The remarkable efficiency gains achieved by LED lighting over the past few years has led some within the industry to doubt that improvements can continue much longer.  A recently published paper in Applied Physics Letters, however, shows that the scientific understanding behind LED technology continues to improve at the same time that manufacturers continue to improve the efficiency of their LED modules.

In the paper, researchers from Rensselaer Polytechnic Institute identify the cause of a common LED challenge known as “efficiency droop,” where the efficiency of the light source decreases as a higher current is applied.  Efficiency droop is especially troublesome for lighting applications, which compared to other uses for LEDs like signage or flat-screen monitors, requires higher-lumen outputs.  While the new research does not immediately make available a commercially viable solution, it does indicate that efficiency gains won’t be slowing down anytime soon.  The study shows that as current increases in an LED, an electric field develops that pushes electrons away from the region where those electrons would otherwise produce light.  Now that researchers and engineers have a more accurate understanding of this effect, they will be better able to design systems to minimize it.

Drums Unstopping

Announcements of ever-higher LED efficiencies seem to come out weekly.  In a July 23 press release, Seoul Semiconductor announced its new 5630C as the world’s most efficient mid-power LED package at 180 lumens per watt (lm/W).  On July 29, Shanghai-based Pozeen launched a retrofit kit for recessed lighting fixtures that can achieve an overall efficiency of 110 lm/W.  These come on top of regular announcements by companies such as Cree and Philips that LED chips and packaged LED modules are reaching ever new heights.  Cree announced in February that its R&D department had made a demonstration chip that achieved 276 lm/W.  Philips announced in April that it had developed a prototype tube LED that delivers 200 lm/W.

None of those recent advancements were achieved with the benefit of the Rensselaer study, indicating that the steady drumbeat of product announcements will keep sounding for at least the next several years.  Anyone doubting that science will keep pushing the envelope toward LEDs’ theoretical limits will be sorely disappointed.


The Battle for Control of Lighting Controls

— July 18, 2013

With the rise of LED lighting and inexpensive controls technologies, the market for networked lighting controls is expected to increase sharply in the coming years.  Three types of companies are maneuvering to take advantage of this opportunity: pure-play lighting controls companies, big lamp industry players, and traditional building controls vendors.  Each group has its advantages, and it’s far from clear which will end up leading the lighting controls market in the future.

Pure Plays

As  with other new technologies, the path has been broken by small, dedicated companies that have developed innovative techniques and demonstrated the value of those techniques in the marketplace.  Companies like Daintree Networks and Redwood Systems have shown that networked lighting controls can save money and provide a valuable service to building managers.

Big Lamp Industry Players

The rise of LED lighting brings an opportunity but also a threat to the large, traditional lamp companies.  The long lifespan of LED lamps will eventually curtail the market for replacement lamps, leading to declining overall revenue from lamp sales.  In response, the big lamp companies are expanding their offerings to include lighting controls and networked systems.  Philips, Osram, and GE have all begun selling the software and controls products needed to centrally manage commercial lighting systems.

Building Controls Vendors

While the networking of lighting controls is a relatively recent development, the networking of HVAC and other building controls has become almost routine.  Some of the key players involved in building controls have begun broadening their businesses to include lighting controls.  Honeywell, for example, has begun selling its own lighting controls software in Europe and has plans to bring it to the United States.  Schneider Electric has also made acquisitions to allow the integration of networked lighting controls with its building management systems.

Building controls companies have the advantage of existing relationships with the applicable customer base.  Their customers trust them to provide systems that already control other systems within buildings.  Adding lighting controls to HVAC controls seems like a logical step.  The big lamp companies also benefit from existing relationships – and it is their products that customers are seeking to network together.  It would be logical for a customer to assume that the company who sold them their lights and sensors would be best suited to sell them the networking controls and software as well.

Between the building controls companies and the big lamp companies, it might seem that the smaller pure plays could be squeezed out of existence.  However, these startups were the first players to come to this table and have made significant inroads, so they shouldn’t be counted out.  With the greater adoption of open standards that allow interoperability between the equipment of multiple vendors, it may well be advantageous for customers to employ a third party for their top-level controls that will not lock them in to a specific vendor for lamps and peripherals and that will continue to push the envelope on innovative controls techniques.

A soon-to-be released update to Navigant Research’s 2012 report, Intelligent Lighting Controls for Commercial Buildings, will discuss these trends and provide profiles for many of the vendors in the lighting controls market.


Shifting Chinese Policies Affect Global LED Supply Chain

— June 15, 2013

China plays an oversize role in the market for LED lighting, both on the demand side, with its massive consumer base, and on the supply side, with its huge manufacturing infrastructure.  China’s 1.3 billion citizens have begun to light their homes, workplaces, and streets with LED lights.  This trend has been encouraged by the country’s 12th Five-Year Plan, which sets aggressive targets for energy reduction.  On the supply side, Chinese government policies have been even more aggressive, subsidizing the purchase of LED manufacturing equipment to the tune of $1.2 billion in 2011 alone.  The government has been explicit about its desire to foster the growth of home-grown LED companies.

The year 2012 saw a large amount of consolidation in the LED industry, especially among Chinese manufacturers.  A global oversupply of LED manufacturing capacity, driven largely by Chinese companies but also by falling demand for other LED products such as backlit monitors, led to falling prices and numerous manufacturer bankruptcies.  Up to 20% of Chinese LED manufacturers are expected to face bankruptcy or liquidation.

Subsidy Slide

Now, the Chinese government has apparently reacted with a shift in policies.  A report by the Global Times in May shows drastic reductions in Chinese government subsidies for LED manufacturing equipment.  Chinese LED chip manufacturers, such as Elec-Tech International and Sanan Optoelectronics, have posted dramatically lower first quarter earnings, blamed largely on the reduction in government subsidies.

This shift in policy leaves open the question of the role that China will play in the global LED supply chain for lighting products going forward.  As described in a Navigant Research report, LED Supply Chain Dynamics, Chinese suppliers must improve the quality of its LED chip manufacturing in order to produce the high output chips needed for lighting applications, the LED segment with the strongest future growth prospects.  Currently, Chinese companies are forced to purchase high-output LED chips from foreign vendors, preventing them from vertically integrating their manufacturing process and truly competing with the global market leaders.

There have been signs that Chinese companies intend to bridge this gap: in November 2012, China-based San’An Optoelectronics said it will acquire a portion of Taiwan-based Formosa Epitaxy.  However, the reduction of government assistance through equipment subsidies and other policies may make it more difficult for Chinese companies to bridge the technology gap.  With LED lighting poised to take over significant market share from traditional lighting technologies in the coming years, there is a great deal at stake in determining which countries around the world will supply this expanding market.


Rembrandt, In a New Light

— April 23, 2013

After an extensive 10-year renovation, the Rijksmuseum in Amsterdam reopened its doors earlier this month to visitors coming to see the work of Dutch masters such as Rembrandt and Vermeer.  In addition to the 17th century masterpieces, those visitors will also be treated to a marvel of the 21st century: LED lighting.  Three-quarters of a million LEDs from Philips now light the museum’s 7,500 works of art and over 100,000 square feet of space.   The Rijksmuseum is joining a rapidly growing number of art museums that have already switched to this light source, including the Louvre in Paris, France, the Kunstkammer Wien in Vienna, Austria, the De An Art Gallery in Zhongshan City, China, and the Museum of Fine Arts in Houston, Texas.  There is even a newly created LinkedIn group focused on LED lighting for art and museums.

When choosing a light source, the two primary considerations for any art museum are the visitor experience and the preservation of artwork.  For both of these considerations, LED lighting is the clear frontrunner.  Light quality and color rendering from LEDs have advanced to a point where Tim Zeedijk, the head of exhibitions at the Rijksmuseum, said that the recent lighting upgrade “allows the art to be viewed in the best light possible to bring out all the colors and details that the artist intended us to see.”

Applications Expand

Regarding artwork preservation, reducing the exposure to ultraviolet light is a key strategy.  Fluorescent, halogen, and high-intensity discharge lighting all emit UV light, forcing art museums to use filters and limit the amount of time that any individual piece is on display.  LED lighting, on the other hand, emits no UV light, relieving a significant concern for curators and giving them new flexibility.  All of the other benefits of LED lighting also apply to museums, including reduced electricity consumption and longer-lived lamps.

Art museums provide another example of a specific application where LED lighting is already the best choice.  Others include cold storage facilities, where the efficiency benefits of LEDs are doubled by the savings in cooling energy, and high-ceiling atriums where the cost of replacing burned out lamps is exorbitant.  As the quality of LEDs continues to improve and the price of LEDs continues to fall, the list of applications where LED lighting is the best choice will continue to grow.  This combination of factors has led Navigant Research to forecast that unit sales of LED lamps will increase worldwide at a compound annual growth rate (CAGR) of 44%, as reported in our recently released study, Energy Efficient Lighting for Commercial Markets.


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