General Electric Co. expects most light bulbs, including the incandescent invented by founder Thomas Edison, to be replaced within a decade by light-emitting diodes that can last from a child’s birth through college.
“People are starting to talk about LEDs for general lighting for indoors,” said Maryrose Sylvester, who was appointed head of the lighting unit in March. “By 2020, about 70 to 80 percent of the general lighting market is going to be enabled by LEDs.”
Siemens AG’s Osram unit and Royal Philips NA, GE’s traditional rivals, have both predicted similar growth rates as new regulations combine with declining LED prices to make the lighting systems more attractive to individual and commercial buyers.
To take advantage of that, GE’s lighting unit has doubled its research and development spending on LED technology over the past five years, Sylvester said without providing a specific figure.
Munich-based Siemens is expecting the market to grow to $13 billion by 2013 and rise another 44 percent by 2016. Philips, based in Amsterdam, predicted in September that 45 percent of the market will be LED-based by 2015.
Because LED systems are more expensive on the front end, demonstrating to customers how the investment pays off with lower maintenance costs and energy savings is critical, Sylvester said.
“As we go into this technology shift, we’re seeing customers much more aware today about energy consumption, much more interested in terms of improving their energy bills, whether they’re a commercial building owner or business owner or a consumer,” Sylvester said.
Though LEDs remain more expensive than other bulbs, prices have dropped as environmental regulations target less energy-efficient lamps. In the U.S., a 2007 law phases out 100-watt incandescent bulbs starting next year by setting efficiency standards they don’t meet, followed by 75-watt lamps in 2013 and 40- and 60-watt bulbs in 2014.
Edison’s 19th-century invention won a reprieve under a spending deal reached by leaders in Congress that would block the Energy Department from enforcing the law. GE said it’s still obligated to comply with the legal standard, which remains on the books.
An LED bulb’s efficiency is directly related to how it generates light. With an incandescent bulb, electricity heats a filament for illumination, with some energy spent on unwanted heat.
With an LED, connecting an electric power source to a lamp stimulates electrons in a semiconductor chip so that they move, giving off light.
Because efficiency lies in the LED package and how it’s configured, GE is concentrating on system designs for its commercial customers rather than making the LED equivalent of an incandescent bulb.
In the commercial lighting segment alone, LED illumination might make up 52 percent of the market by 2021, Pike Research forecasts. The market might reach $42 billion this year and peak at nearly $54 billion in 2012 before gradually declining. Because GE and Siemens face competition from newer Asian companies manufacturing less expensively, they must reduce LED prices to win in the market, said Konkana Khaund, the industry manager for market researcher Frost & Sullivan.
In the United States, GE’s Cleveland-based lighting unit leads both Phillips and Siemens. The business employs about 17,000 worldwide and provided about $3 billion of GE’s $150.2 billion in sales last year.