• Save
Solid State Lighting: Benchmarking Analysis - Pricing, Lifetime Costs & Payback
Upcoming SlideShare
Loading in...5
×
 

Solid State Lighting: Benchmarking Analysis - Pricing, Lifetime Costs & Payback

on

  • 660 views

AVAILABLE FOR DOWNLOAD AT: bit.ly/h8etP...

AVAILABLE FOR DOWNLOAD AT: bit.ly/h8etP

At the request of a top municipality, CTA has published its first research report on energy efficiency/lighting. This report was conducted on a non-exclusive basis and can be downloaded on our site. In the next few months, we will be working on two additional reports on energy efficiency/electricity monitoring and control solutions and distributed generation in urban environments. We are currently looking to connect with municipalities, global development organizations, investors and companies who have an active interest in these sectors. Please feel free to share the link to our report and let us know if there is anyone that we should be connecting with in these sectors.

Rom Wilson - Partner, Founder at Cleantech Approach
romahlo@cleantechapproach.com

Statistics

Views

Total Views
660
Views on SlideShare
641
Embed Views
19

Actions

Likes
1
Downloads
0
Comments
0

2 Embeds 19

http://www.lmodules.com 16
http://www.linkedin.com 3

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Solid State Lighting: Benchmarking Analysis - Pricing, Lifetime Costs & Payback Solid State Lighting: Benchmarking Analysis - Pricing, Lifetime Costs & Payback Document Transcript

  • www.cleantechapproach.com cleantech approach sustainable technology research and advisory Solid State Lighting: Benchmarking Analysis Pricing, Lifetime Costs & Payback   CTA REPORT OBJECTIVE: SSL BENCHMARKING CTA’s research provides municipalities and global development organizations with the market analysis they require to devise viable sustainable technology-enabled strategies. In this report, we take a detailed look at a market that offers cities a tremendous energy saving opportunity, solid state lighting (SSL). Through our rigorous benchmarking of SSL solutions versus their conventional lighting counterparts, we have determined the markets in which SSL solutions outperform, their relative costs of operation, and their payback periods. SOLID STATE LIGHTING OFFERS SIGNIFICANT OPPORTUNITIES TO REDUCE ENERGY CONSUMPTION Lighting accounts for 20-25% of the US’s projected 2009 electricity consumption of 3,886 billion kilowatt hours (equating to $389 billion at an average of $0.10 per nominal kilowatt hour); buildings (split nearly evenly between residential and commercial) are responsible for nearly 40% of this national consumption figure. Accordingly, with only 1% market penetration, emerging, mass-market SSL technologies’ (LEDs in particular) increased efficiencies offer significant opportunities to reduce overall electricity consumption. CTA BENCHMARKING ANALYIS SUMMARY: SSL VS. CONVENTIONAL LIGHTING SOLUTIONS This report benchmarks the purchase prices, performance, and associated costs (including annual electricity costs, bulb lifetime, and total lifetime operating costs) of SSL solutions from twenty-three leading vendors against appropriate comparables from five of the most prevalent conventional lighting technologies: o traditional incandescent (tungsten filament); o halogen; o compact fluorescent (CFL); o linear fluorescent (LF); and o metal halide (MH). We examine a wide range of SSL replacement bulbs and fixtures – those that deliver low intensity directional light output, high intensity directional light output, and omnidirectional light output – that are targeted at three primary lighting end-markets: residential, commercial office, and retail. To give our readers even greater clarity on SSL performance/payback characteristics for specific segments of the market, we have further divided these three segments into the following eight sub-segments for purposes of our analysis: o Residential: directional, low intensity lighting (below 500 lumens), for warm white color applications; o Residential: directional, high intensity lighting (over 500 lumens), for warm white color applications; o Residential: omnidirectional lighting, for warm white color applications; o Commercial Office: directional, low intensity lighting (below 500 lumens), for cool white color applications; o Commercial Office: directional, high intensity lighting (over 500 lumens), for cool white color applications; o Commercial Office: omnidirectional lighting, for cool white color applications; o Retail: low intensity lighting (below 500 lumens), for warm & cool white color applications; and o Retail: high intensity lighting (over 500 lumens), for warm & cool white color applications. R ep o r t O u t lin e. o The summary and conclusions portion of this report is on pages 2-5. o CTA’s detailed, product-by-product benchmarking analysis is presented on pages 6-13. o A review of our benchmarking methodology and SSL definitions is provided on pages 14-15. PAGE 1 OF 15
  • A v er ag e P ayb ac k A n alysis Su m m ar y & C T A C o n c lu sio n s Given that the payback period is the most fundamental element underlying SSL investment decision-making, we have marked those application areas where average payback on SSL solutions versus their conventional benchmarks is quick and extremely attractive in green , modestly attractive in white , and least attractive in red . PAGE 2 OF 15
  • A v er ag e P er fo r m an c e an d C o st M et r ic s C o m p ar ed A summary of the average performance and cost benchmarking ratios derived from our detailed analysis is below. These average ratios are derived from the detailed analysis on pages 6-13. We review our benchmarking methodology on pages 14-15. A “ - “ is used where no benchmark exists PAGE 3 OF 15
  • CTA LIGHTING CONCLUSIONS & RECOMMENDATIONS CTA’s proprietary benchmarking analysis (summaries above and detailed analysis on pages 6-13) supports the following conclusions: o L EDs o ffer a c o m p ellin g v alu e p r o p o sit io n v er su s in c an d esc en t an d h alo g en lig h t in g so lu t io n s, b u t C F L s (c o m p ac t flu o r esc en t s) r em ain t o u g h t o b eat in t h e n ear t er m . LEDs currently offer a compelling value proposition versus conventional lighting technologies (incandescent and halogen reflectors, most notably). Although LEDs slightly outperform CFL reflectors (offering lower power consumption, longer bulb life, enhanced optical control, and no mercury residual), the payback period associated with recouping the LEDs’ substantial price premium (LEDs with equivalent light output sell for 4-8x more) is often long (beyond 5 years), making SSL a less compelling, price competitive alternative in the near term. More specifically, conclusions drawn from the “Average Performance & Cost Metrics Compared” summary data (on page 3) include: V s. In c an d esc en t Ben c h m ar ks (based on averages across our eight end-market segments) As compared to SSL solutions, CTA’s benchmarking analysis suggests that incandescent solutions’ annual electricity costs are 4-6x greater and their bulb lifetimes are 1/20 to 1/26 as long; this yields an overall cost of operation (including electricity, bulb replacement, and maintenance) that is 8-14x greater. As a result, on average, payback on the SSL solutions’ initial price premium (7-62x more than incandescent benchmarks) occurs in 1.7-3.4 years. Given that SSL solutions do not yet span the full range of incandescent lighting solutions' light output levels, particularly on the high end of the light output range, here are some qualifications:  Although SSL reflectors (esp. PAR replacements) outperform and payback quickly at comparable lumen output levels, their absolute light output is in the low- to mid-range of conventional incandescent reflector output levels (200-1800 lm), not generally exceeding 85W incandescent reflector bulb levels (1000 lm) in the residential market and 90W incandescent reflector bulb levels (1100 lm) in the commercial office and retail markets.  With paybacks in an acceptable 2-5 year range, downlights' light output (650-1000 lm or 65-90W incandescent reflector for the residential market; and 1000-3000+ lm or 100-300W incandescent reflector for the commercial office and retail markets) makes them ideal for mid-range light intensity applications in the residential market and high intensity applications in the commercial office and retail markets.  As omnidirectional light sources (conventional light bulbs), SSL solutions' absolute light output levels generally do not exceed the light output levels of 45W incandescents (600 lm) for the residential market and 70W incandescents (1000 lm) in the commercial office and retail markets. V s. Halo g en Ben c h m ar ks (based on averages across our eight end-market segments) As compared to SSL solutions, CTA’s benchmarking analysis suggests halogen solutions’ annual electricity costs are 4x greater and their bulb lifetimes are 1/16 to 1/22 as long; this yields an overall cost of operation (including electricity, bulb replacement, and maintenance) that is 7-15x greater. As a result, on average, payback on the SSL solutions’ initial price premium (3-10x more than halogen benchmarks) occurs in 1.7-3.5 years. Given that SSL solutions do not yet span the full range of halogen lighting solutions' light output levels, particularly on the high end of the light output range, here are some qualifications:  Although SSL mini reflectors (esp. MR16 replacements) outperform and payback quickly at comparable lumen output levels, their absolute light output is in the low- to mid-range of conventional halogen MR16 output levels (250-750 lm), generally not exceeding 35W halogen MR16 levels (350 lm).  Although SSL reflectors (esp. PAR replacements) outperform and payback quickly at comparable lumen output levels, their absolute light output is in the low- to mid-range of halogen reflector output levels (250-3600 lm), generally not exceeding 75W halogen bulb levels (1000 lm) in the residential market and 80W halogen bulb levels (1100 lm) in the commercial office and retail markets.  With paybacks in an acceptable 2-5 year range, downlights' light output levels (650-1000 lm or 60-75W halogen for the residential market; and 1000-3000+ lm or 75-200W halogen for the commercial office and retail markets) makes them ideal for mid-range light intensity applications in the residential market and high intensity applications in the commercial office and retail markets. V s. C F L Ben c h m ar ks (based on averages across our eight end-market segments) As compared to SSL solutions, CTA’s benchmarking analysis suggests that CFL solutions’ annual electricity costs are 1.1-1.4x (that is, 10-40%) greater and their bulb lifetimes are 1/6 to 1/9 as long; this yields an overall cost of operation (including electricity, bulb replacement, and maintenance) that is 3-7x greater. However, despite these better performance metrics, average payback on the SSL solutions’ initial price premium occurs in 4.5-12.9 years, due to the SSL solutions’ price premium (4-8x more than CFL benchmarks). It is worth noting that there are further incremental costs associated with CFLs that are not included in our calculations: Because CFL bulbs contain small amounts of mercury (approx. 4 mg per bulb) a powerful neurotoxin, they are receiving increasing levels of scrutiny as there is no mandated program in place to provide for their proper disposal; note, however, that CFLs yield less mercury release overall when compared to other conventional, non-mercury containing lighting PAGE 4 OF 15
  • technologies (incandescent, halogen), as a result of their lower power consumption (due to the fact that coal-fired power plants release mercury into the environment as coal is burned; CFL’s lower power requirements mean that CFLs, on average, release 1/3 the total amount of mercury over their useful life). Given that SSL solutions do not yet span the full range of CFL lighting solutions' light output levels, particularly on the high end of the light output range, here are some qualifications:  SSL mini reflectors’ (esp. MR16 replacements) light output levels are on par with that of CFL MR16 replacements.  SSL reflectors' (esp. PAR replacements) light output is in the low- to mid-range of CFL reflector light output levels (250-1650 lm), not exceeding 22W CFL reflector bulb levels (1000 lm) in the residential market and 23W CFL reflector bulb levels (1100 lm) in the commercial office and retail markets.  As omnidirectional light sources, SSL solutions' absolute light output levels generally do not exceed the light output levels of 11W CFL spirals (600 lm) for the residential market and 20W CFL spirals (1000 lm) in the commercial office market; the most powerful CFL spirals reach 2600 lm at 40W. V s. L in ear F lu o r esc en t Ben c h m ar ks (based on averages across our eight end-market segments) As compared to SSL solutions, CTA’s benchmarking analysis suggests linear fluorescent solutions’ annual electricity costs are roughly on par with SSL (anywhere from 20% less to equivalent with SSL solutions), but their bulb lifetimes are 1/4 as long; this yields an overall cost of operation (including electricity, bulb replacement, and maintenance) that ranges from modestly (20%) to significantly (80%) greater. However, once again, despite these better performance metrics, average payback on the SSL solutions’ initial price premium occurs in 8-22 years, due to the SSL solutions’ price premium (2-11x more than linear fluorescent benchmarks). V s. M et al Halid e Ben c h m ar ks (based on averages across our eight end-market segments) As compared to SSL solutions, CTA’s benchmarking analysis suggests metal halide solutions’ annual electricity costs are roughly equivalent, ranging from 10% below to 10% greater and their bulb lifetimes are 1/5 to 1/8 as long; this yields an overall cost of operation (including electricity, bulb replacement, and maintenance) that is 2-3x greater. As a result, on average, payback on the SSL solutions’ initial price premium (2-3x more than metal halide benchmarks) occurs in 8 years. o In d u st r y o u t lo o k: P er fo r m an c e Im p r o v em en t s will m ake SSL in c r easin g ly c o m p ellin g . Consistent with the Department of Energy’s forecasts, we expect to see warm white LED b r ig h t n ess an d effic ac y im p r o v em en t s o f 1 4 % p er an n u m t h r o u g h 2 0 1 5, which should serve to make LEDs increasingly compelling solutions as compared to conventional lighting technologies, particularly with regard to CFL lighting options. READING THE DETAILED BENCHMARKING REPORTS A b b r ev iat io n s u sed in t h e d et ailed b en c h m ar kin g r ep o r t s (p ag es 6 -1 3): o We profiled both bulb replacements (marked with an “R”) and lighting fixtures (marked with an “F”). o When no appropriate benchmark was available for a given SSL solution in a specific conventional lighting category, we marked the space with a “ - “. o A product with a payback period of “0.0” offers an immediate payback (typically when the price of an SSL solution is less costly than a conventional technology) and those marked “NP” offer no payback over any reasonable time horizon (longer than the life of the LED bulb/fixture). PAGE 5 OF 15
  • PAGE 6 OF 15
  • PAGE 7 OF 15
  • PAGE 8 OF 15
  • PAGE 9 OF 15
  • PAGE 10 OF 15
  • PAGE 11 OF 15
  • PAGE 12 OF 15
  • PAGE 13 OF 15
  • CTA BENCHMARKING ANALYSIS: OUR METHODOLOGY For definitions of the terms and more specific information on how the data discussed below was derived, see our “Benchmarking Analysis: Terminology Definitions” section below. St ep 1 : In p u t p r o file an d p er fo r m an c e d at a fo r SSL o ffer in g s. For the purposes of benchmarking, we gathered the following profile and performance data for each SSL product profiled: power, light output, efficacy, bulb lifetime, and pricing. It is im p o r t an t t o p o in t o u t t h at o u r p er fo r m an c e d at a is d r awn fr o m p r o d u c t sp ec ific at io n s p r o v id ed b y t h e r esp ec t iv e m an u fac t u r er s/ v en d o r s – we p r o v id e n o in d ep en d en t t est in g t o v er ify t h at t h ese sp ec ific at io n s ar e ac c u r at e (fo r su c h t est in g , see t h e Do E’s C A L iP ER r ep o r t s). St ep 2 : Gr o u p ed SSL so lu t io n s in t o ap p r o p r iat e ap p lic at io n c at eg o r ies. As stated above, CTA’s proprietary analysis benchmarked SSL solutions from twenty-three vendors across the following eight end market categories: o Residential Solutions: Low Intensity (under 500 lumens in light output, warm white color), Directional Lighting Applications o Residential Solutions: High Intensity (over 500 lumens in light output, warm white color), Directional Lighting Applications o Residential Solutions: Omnidirectional Lighting Applications (warm white color) o Commercial Office Solutions: Low Intensity (under 500 lumens in light output, c0ol white color), Directional Lighting Applications o Commercial Office Solutions: High Intensity (over 500 lumens in light output, cool white color), Directional Lighting Applications o Commercial Office Solutions: Omnidirectional Lighting Applications (cool white color) o Retail Solutions: Low Intensity (under 500 lumens in light output), Directional Lighting Applications o Retail Solutions: High Intensity (over 500 lumens in light output), Directional Lighting Applications St ep 3: Det er m in ed ap p r o p r iat e c o n v en t io n al lig h t in g b en c h m ar ks fo r eac h SSL o ffer in g . o Selec t ed sev en c o n v en t io n al lig h t in g t ec h n o lo g ies ag ain st wh ic h t o b en c h m ar k. For each SSL solution, we provide a detailed performance comparison versus its relevant conventional benchmarks. For purposes of accurate benchmarking, we compared each (when applicable) to five conventional lighting technologies: basic incandescent (tungsten filament), halogen, compact fluorescent (CFL), linear fluorescent (LF), and metal halide (MH). o Det er m in at io n o f t h e ap p r o p r iat e b en c h m ar k fo r a g iv en SSL o ffer in g . CTA determined SSL solutions’ appropriate conventional lighting benchmarks by matching their respective light outputs (in lumens), light directionalities, and function (fixture or replacement bulb). For example, a d ir ec t io n al SSL fixt u r e (e.g. a downlight) that generates 650 lumens will be matched to all applicable conventional fixtures that generate approximately 650 lumens of directional light; appropriate wattage bulbs were assigned for conventional lighting solutions such that light output equivalency was achieved. o P r ic es (d er iv ed fr o m an av er ag e o f p r ic es d er iv ed fr o m t h e v en d o r s t h em selv es, d ist r ib u t o r s, an d In t er n et sear c h es) an d p er fo r m an c e c h ar ac t er ist ic s (p o wer , lig h t o u t p u t , effic ac y, an d b u lb lifet im e) wer e t h en r ec o r d ed fo r t h ese c o n v en t io n al t ec h n o lo g ies, so as to facilitate benchmarking analysis. St ep 4 : P er fo r m ed c o st -b ased b en c h m ar kin g an alysis d er iv ed fr o m p er fo r m an c e d at a. We used our aggregated performance data to generate the following cost-based benchmarking comparisons: annual electricity costs, cost of operation over LED lifetime (including electricity consumption, bulb replacement costs, and maintenance costs), and LED payback period (in years). BENCHMARKING ANALYSIS: TERMINOLOGY DEFINITIONS o Typ es o f SSL t ec h n o lo g ies: o LEDs (light-emitting diodes): LEDs are an electronic light source, based on the semiconductor diode; when electrons fall to a lower energy level, they release energy in the form of light. o LED alternatives: While LEDs are the focus of this report, alternative alternative SSL technologies include some of the following: electron stimulated luminescence, light-emitting doped silicon oxide thin films, microplasma nanotechnology, magnetic induction, and electrodeless plasma. o P o wer : This is the amount of electricity consumed by a given light source; it is measured in watts. o L ig h t o u t p u t : This is the amount of light given off by a given source; it is measured in lumens. o Effic ac y: The efficacy metric enables an apples-to-apples comparison of the light output derived from a constant amount of electrical energy and is critical to our benchmarking analysis; it is measured in lumens per watt. PAGE 14 OF 15
  • o Bu lb L ifet im e: For LED bulbs, the stated lifetime is the point at which the LED is at 70% of its original brightness (this is when it is observable that the light output has decreased). This is different from conventional bulb lifetimes, which are meant to indicate when the bulb will cease to function (however, it will perform to its full light output up until this point). It is measured in hours. o P r ic in g : Prices for both SSL and conventional lighting solutions were gathered directly from vendors, distributors, and online retailers; when multiple prices were encountered, we took an average. Note that prices for SSL solutions are single unit (no volume discount) prices that reflect the reasonable price through which these products may be acquired. o C o r r elat ed C o lo r T em p er at u r e (C C T ). Expressed in degrees Kelvin, color temperature is a simplified way to characterize the spectral properties of a light source. Low color temperature implies warmer (more yellow/red) light while high color temperature implies a colder (more blue) light. This report focused on two general classes of CCT:  Approx. 2500-3500K - Warm white (most often used in residential lighting applications); and  Approx. 3500-6000K - Cool white (most often used for commercial and retail lighting applications) o A n n u al elec t r ic it y c o st s. Our annual electricity cost calculation assumes that a bulb or fixture runs 12 hours per day for 350 days per year at its given wattage; to this usage data, we have applied an electricity price of $0.10 per nominal kilowatt hour. o C o st o f o p er at io n o v er L ED lifet im e. CTA calculated the total cost of operation associated with conventional lighting benchmarks by assuming that they were to run for the anticipated lifetime of their comparable LEDs (often multiple times the lifetime of the conventional lighting solution). More specifically, the total cost includes the following 3 elements:  Elec t r ic it y u sag e o v er t h e L ED lifet im e. We multiply the annual electricity costs (calculation above) by the SSL lifetime (in years), assuming the SSL solution runs 12 hours per day, 350 days per year.  Bu lb R ep lac em en t c o st s o v er L ED lifet im e. We calculate the number of conventional bulb replacements that will be required (SSL lifetime divided by the conventional bulb lifetime, minus the 1 original bulb) and multiply by the cost of the conventional bulb replacement.  M ain t en an c e c o st s. We have assigned a per bulb replacement cost (required to meet the comparable LED bulb’s lifetime) of $7.50 associated with identifying and replacing expired conventional bulbs. We believe that the assumption of $7.50 per bulb is an exceptionally conservative figure, given the potential complexity associated with ongoing maintenance. In this comparison, SSL solutions’ total operating costs are limited to electricity, while those of conventional solutions include electricity, bulb replacement, and maintenance. o L ED p ayb ac k p er io d . To calculate the payback period on a given SSL fixture or replacement bulb (measured in years), CTA calculated the time required to recapture the price premium for the SSL solution. Specifically, we multiplied the lifetime of the LED (in years) by the price premium of the LED solution (in $’s) and then divided by the aggregate savings over the LED lifetime (the aforementioned combination of the absence of bulb replacement, associated maintenance, and electricity savings, in $’s). SUGGESTED WEBLINKS FOR SSL INDUSTRY INFORMATION AND NEWS Suggested weblinks to learn more about SSL and the information used in CTA’s benchmarking analysis can be found at our website’s research publications download page: http://www.cleantechapproach.com/research-publications/ ABOUT CLEANTECH APPROACH Cleantech Approach (www.cleantechapproach.com) is an independent research and advisory firm focused on devising sustainable technology-enabled strategies for municipal and global development organizations. The chief differentiating feature of CTA’s research is our ability to deliver a complete, unbiased picture of the market for a given technology. This unique picture is derived from our effective use of a dual-focused strategy, composed of both top-down (macro) and bottom-up (micro) approaches, to arrive at our research conclusions. Be sure to check out CTA’s next soon-to-be-released report: M o n it o r in g an d C o n t r o l So lu t io n s. To offer comments, feedback, or subscribe to our mailing list (in order to receive alerts re: the publishing of new reports), email us at: info@cleantechapproach.com. You can also follow us on Twitter (twitter.com/ctapproach) to see who we are following for industry news; check out links to what we believe are the most important developments in the cleantech industry; and most important, get notifications of the publication of new CTA reports as they become available. C TA SSL Ben c h m ar kin g R ep o r t A u t h o r s: Dav id R aez er , To m R aez er , an d R o m ah lo Wilso n . (h t t p :/ / www.c lean t ec h ap p r o ac h .c o m / ab o u t -u s/ ) P u b lish ed O c t o b er 2 0 0 9 . PAGE 15 OF 15