High growth rates for LED replacement lamp market

MOUNTAIN VIEW, USA: Market conditions are right for the LED replacement lamp market to accelerate in the next few years, according to a new market report by Strategies Unlimited.

Dramatic improvements in commercially available LED performance in recent years, as well as significant cost reduction, has made it feasible to design LED lamps to offer comparable lumen output and to compete with other established lighting technologies on the basis of cost of ownership.

The market is in a state of flux as utilities, energy efficiency organizations and customers look for optimum solutions which save energy, minimize the cost of ownership, and give acceptable quality of light. Customers are in the process of being educated about comparing cost of ownership rather than the initial price of lamps.

Regulations in Europe will ban the 100W incandescent clear glass lamp starting in September 2009, and will progressively ban all inefficient incandescent lamps by 2012 and all incandescent lamps by 2016. The Energy Information and Security Act of 2007 began the process of restricting the sale of inefficient lamps in the US.

By 2012, with a few exceptions, inefficient incandescent lamps cannot be sold. Although the awareness of these regulations is still weak in the marketplace, they will create market opportunities for LED replacement lamps. Recognizing the potential of LED technology to save energy, policy makers have been supporting the research and development of LED technology and helping its commercialization.

In the short run, while LED replacement lamps become a viable alternative, regulators are encouraging compact fluorescent lamps (CFLs). However, over the next five years, the advantages of LED technology over CFL will become recognized, especially with respect to the quality of light, dimmability, controllability, lamp life and environmental cost of ownership. Some well-designed LED lamps already offer effective lumen efficacies that compete with CFLs.

The commercial and industrial segments will embrace LEDs to control costs and save energy. The LED lamps will be used for directed light applications, in hard-to-reach places and where the cost of re placement is very high. Although the market for LED replacement lamps is still in its early stages of development, the lamp revenues are forecast to grow at a CAGR of 107 percent through 2013.