The invention of the incandescent light bulb brought enormous changes to the way that people with access to electricity live and work, but it was not until the oil shocks of the 1970s that the efficiency of a bulb that generates a lot of wasteful heat was questioned. Governments strove to promote energy efficiency, and the industrial giants of Philips and Osram invested heavily in alternative options, supported by legislation to phase out wasteful light bulbs. The first result was the compact fluorescent light bulb (CFL), offering five times the energy efficiency of old-fashioned incandescents. However, its brilliant blue-white light and slow warm-up time was unpopular with consumers. Halogen briefly offered a suitable replacement but with only slightly better efficiency than a regular incandescent bulb. Then the LED arrived.
LEDs offer huge potential for rapid transition and carbon emission reduction. They can produce light instantly and with same colour spectrum as natural daylight, and with very little heat (incandescent light bulbs waste as much as 95% of their energy through the creation of heat). American manufacturer Fairchild Optoelectronics brought an LED lighting product to market as early as the 1970s, but they remained an expensive niche product for decades. Not until 2000, when national legislation across both industrialised and developing nations introduced minimum performance and efficiency standards, as well as set concrete dates for the phase out of inefficient bulbs, did sales start to shift slowly toward lower-energy options. Of course, the speed and depth of the LED transition differs from nation to nation, where the policy, economics and energy access can diverge radically from one nation to the next. As late as 2015, many consumers were still reluctant to leave the traditional lightbulb behind. They considered alternatives to halogen and incandescent lamps inadequate, but LED lighting quality, design, price and functionality improvements in the last few years have been impressive and their uptake has accelerated rapidly as a result. Today, LEDs cost $2-5 and use up to 90% less energy than incandescent bulbs (including halogen) and 60% less than old fluorescent lighting. By 2019, LEDs accounted for around 46% of lighting sales globally, up from 37% in 2018.
The governmental push to phase out inefficient bulbs that has supported the rise of the LED began in 2005 in Brazil and Venezuela, before the European Union, Australia and Switzerland began to phase them out in 2009. Most governments and companies are now enacting policies to increase the uptake of LEDs due to the cost and energy-saving potential. The phase out in the US began in 2007 (before being suspended in 2019 by the Trump administration) and an EU directive will end the sale of incandescent and halogen light bulbs by the end of 2021.
The rise of the LED shows what robust, interventionist and strong government policy can do to phase out inefficient, wasteful and damaging products. Without it, industry would not have had the impetus to shift production away from outdated lighting technologies. Crucial for drawing insights from this transition, the legislation is most typically based on efficiency requirements, rather than specific technologies, leaving technology and industry to find the solution. The result has been the inevitable decline of halogen and incandescent light bulbs, creating savings across the board for businesses and consumers alike.
The rapid proliferation of LEDs is already having a marked impact on the total energy consumed by lighting, with demand for electricity for lighting dropping to around 13% of total energy consumption in 2018 and, at current rates of LED penetration, expected to drop to 8% of total energy consumption by 2030. Energy efficiency, however, can be forgotten among the shiny new toys of renewable technology and must be constantly fostered and encouraged. According to the IEA, global improvements in energy efficiency have been declining since 2015 and yet efficiency still needs to deliver significantly more in reducing total energy use. The total consumption of electricity by lighting sat at around 13% of global energy demand in 2018 and accounts for around 5% of total global carbon emissions each year. To put those figures into perspective, the total emissions from international shipping amount to 1.7%. There remains huge scope to drive down emissions from lighting, with some estimates suggesting that an overnight global switch to highly efficient LED light bulbs could cut 1,400 million tonnes of CO2 emissions. This would avoid the construction of 1,250 power stations around the world – a monumental saving both in terms of carbon emissions and air quality.
This example also shows how courageous business decisions can quickly pay dividends. Industrial manufacturers made decisive decisions to opt for LED production over other inefficient lighting products, taking on risks in the process. Philips Lighting in 2006 decided to move away from incandescent light bulbs in favour of scaled up LED production at a point when nearly two-thirds of their sales volume came from incandescent light bulbs; such a radical shift faced huge opposition within the company and among shareholders. The move, of course, paid off and the firm – now called Signify – sits comfortably in the top five LED manufacturers in the world today, with an annual revenue of around £6 billion.
The example of the lightblub shows how important it is that every individual takes action to reduce carbon emissions, however small, and that personal responsibility is a part of our societal shifts away from high carbon lifestyles. The sum total of many billions of small actions can be staggering in impact and in financial savings. Passing savings onto consumers can help drive transformation in a capitalist system. Beyond the energy efficiency and environmental benefits of LEDs, they also deliver big cost savings for consumers. The Department of Energy in the US estimated that LED lighting could reduce their national energy consumption for lighting by 29% by 2025, saving households around £80 billion on their electric bills. In the UK, widespread adoption of LEDs in British homes would shave £2 billion of energy bills and prevent 8 million tonnes of carbon being released into the atmosphere. In the UK, it’s estimated that the initial investment to make the switch to LEDs will be repaid within three to four months – a staggering return on investment. If every British home made the switch to LEDs, it’s estimated that each household would save an average of £40 over the course of a year.
The beginnings of the humble lightbulb go back even further than Volta to 1761, when Ebenezer Kinnersley demonstrated incandescence from a heated wire. But it was not until 1879 that Thomas Alva Edison filed the patent for an electric lamp that would go on to dominate the field for nearly two centuries – having cleverly bought numerous patents from other inventors that went into the development of a working product. The incandescent light bulb has completely revolutionised the way in which those with access to electricity work and live. Its dominance in the 19th and 20th century was due to a mixture of factors, but the primary driver was that it had no challenger and rapidly falling costs. As Edison famously quipped, “only the rich will be able to burn candles” and, as costs continued to fall, the consumption of artificial light in the 20th century was 100,000 times more than in the 18th century. The economics of developing an efficient and lasting light bulb have not been smooth or straightforward though. In the 1920s a cartel of manufacturers with the name ‘Phoebus’, including Osram, Philips and subsidiaries of General Electric conspired to produce bulbs with shorter lifespans than had been common.
Fast forwarding to the 21st Century, once the benefits of LED technology revealed their overwhelming superiority, the manufacturing shift was surprisingly fraught with disagreement, but the prospect of massive energy savings eventually won out. Nor was market penetration as quick and easy as LED supporters had hoped, requiring governments to step in and help accelerate their adoption, supporting the scaling up of LED manufacturing and phasing out inefficient light bulbs. Governments had an added incentive to drive the manufacturing and deployment of LEDs as public lighting costs were eating up an alarming share of municipal budgets. For example, it is estimated that public lighting can account for between 20% and 40% of a council’s electricity bill in the USA.
As hoped, the stringent legislation and efficiency requirements introduced by governments led to a drastic fall in the price of LED lighting products, accelerating market penetration by making them economically viable for billions of people. Over the past two decades, LED light bulbs have reduced their cost by over 20 times and improved the quality of lighting – their luminous flux – by 40 times. Not only has this created huge savings for consumers, it has also delivered a large chunk of carbon mitigation for governments. In India, for instance, the LED market has grown 130-fold in the space of just five years, with annual sales in 2014 amounting to 5 million bulbs each year before reaching 670 million bulbs a year by 2018. The proliferation of LEDs has resulted in 30 terawatt hours of annual energy savings, which is roughly enough to power 28 million Indian homes or the whole of Denmark for a whole year. At the same time, the price of an LED light bulb has dropped from around £4.50 in 2014 to £0.78 in 2019, just five years later. Another benefit is how LEDs have made solar home lighting systems cheaper, more efficient and viable in India, a country where many still lack access to grid electricity.
In hotter climates, like India, LEDs have the added benefit of helping to keep buildings cool. Because, as seen, incandescent light bulbs lost 95% of their energy input by emitting heat. Widespread use meant that spaces quickly became warmer and less habitable in already stifling climates. These same spaces are often then being cooled with inefficient and polluting air conditioning units. LEDs, however, lose very little energy to heat, preventing people and buildings from heating up unnecessarily.
One of the main enabling factors for the growing dominance of LEDs was their declining cost. Thanks to innovation within the lighting manufacturing sector, as well as the sheer scale of production, the cost of LED lighting has dropped dramatically over the last few decades.When LEDs first hit the market in the UK, consumers could be expected to pay as much as £9 per bulb – something that is quite unimaginable now with the advent of £1 LED light bulbs. The price drop was so fast that consumers could expect a bulb to be as much as £1 cheaper in the space of just a year. This enabled the rapid growth of LEDs in a variety of ways. Firstly, their current price point means they are affordable to nearly all consumers, increasing sales and product penetration. Secondly, their low cost makes the return on investment (ROI) even faster, with some estimates at between 3 to 4 months. The return in some consumer situations could be as much as 525%, although it depends on a number of variables.
Clear government legislation and guidance on efficiency, quality and phase-out also played a major role. In order to accelerate the growth of LED lighting products, governments have been keen to intervene in markets. The past decades have seen governments all over the world introduce a raft of measures on minimum quality and efficiency standards. The result has been the phase out of inefficient light bulbs and manufacturing capacity shifting to the production of LEDs, creating the industrial scale required to drive down costs quickly. Under EU legislation, this year – 2021 – could see the last incandescent and halogen light bulbs sold in Britain.
There is also a growing consumer demand for cost-saving technologies that are available to everyone – and light bulbs fit this perfectly. They enable people to take action in a way that both reduces consumption (multiples shorter-life bulbs) and cuts carbon emissions without needing specialist knowledge or huge investment. When compared to halogen light bulbs, LEDs win hands down on cost. On average, a halogen light bulb lasts around 2,000 hours, which is approximately two years of average use. LEDs, however, last for around 25,000 hours, delivering savings for consumers for years and years whilst also reducing physical waste. Beyond the longevity of light, the savings of switching to LEDs are significant. After a complete switch to LED lighting, the average household can be expected to save an average of £40 over the course of a year. The sheer scale of cost savings available to consumers, businesses and governments alike, combined with the increasingly affordable price of LED lighting products, make them the de facto choice for consumers.
This case study was originally published on the Nesta website here.
This case study was produced in partnership with Nesta as part of a series looking at energy transitions, some from other countries, and some from the UK’s recent past.