According to a report on LED lighting issued by vampire squid Goldman Sachs, LED lighting will save the US $20 billion in electricity costs and reduce America’s carbon emissions by 100 million metric tons annually — by 2026. If the rest of the world keeps pace, we’re looking at $100 billion in electricity savings and 500 million metric tons less CO2 in the atmosphere. By our rough estimate that’s about 5% of the world’s total CO2 emissions. Amazing, isn’t it?
As you can see from this chart provided by the US Department of Energy, as prices fell, installations rose:
So what’s up with this incredibly rapid adoption of a new, green, conservation-friendly technology? Even more importantly, can we recreate these circumstances to accelerate adoption of other high-efficiency technologies?
LED lighting: perfect profile for rapid adoption
There are several variables, some obvious and others not-so-obvious, driving LED lighting’s remarkable rise. We’ll discuss each in some detail below.
Cost: the price per LED bulb has plummeted over 90% in the last 9 years (and the current best-selling Amazon LED light bulb costs a mere $1.56 each). The chart above makes this pretty obvious, as well as the inverse correlation between price and adoption. This gives us the first axiom of green-tech adoption: The lower the cost, the faster improved technology is adopted.
Replacement cycle: incandescent light bulbs burn out with alarming regularity. Compact fluorescent (CFL) bulbs last quite a bit longer, yet need replacement on something like an annual basis (broad generalization based on average use profile). So — when do you look for a better solution for home or business lighting? When you need it. Most of us really don’t consider changing a light bulb if it’s working just fine. And so we discover the second axiom: The shorter the replacement cycle, the faster improved technology is adopted.
Efficiency: in order to break out of an established habit, we mere mortals need reasons. Think about it: when your favorite pen runs out of ink, you buy the same one again. When your Chuck Taylors fall apart, you get another pair. Unless we have a reason to change your habit, we tend to operate on inertia. Enter efficiency. Consider: today’s LED bulbs use 15% as much power as the equivalent incandescent bulb, and less than half as much electricity as a CFL with the same output.
Let’s break these numbers down. According to the US Energy Information Administration, lighting consumes about 10% of residential electricity consumption. Average home electricity use? 901 kWh per month. In sunny Florida, that works out to a $132 per month electrical bill. So, how much can our hypothetical Florida household save by adopting LED light bulbs?
Switching from incandescent to LED
First, we calculate the approximate cost of lighting:
$132 * 10% = $1.32
Then, we multiply the cost of lighting by the energy savings of LED bulbs:
$1.32 * 85%
We save $1.12 per month, $13.46 per year, in electricity. PLUS instead of changing our incandescent bulbs monthly, our new LED bulbs last 5 years without replacement…
8 incandescent bulbs / month replaced at $.50 each = $4 per month, $48/year in savings.
TOTAL savings over 5 years: $307
Switching from CFL to LED lighting
We take our $1.32 monthly lighting cost and multiply by the energy savings of LED bulbs:
$1.32 * 60%
We save $.79 per month, $9.50 per year, in electricity, PLUS instead of changing our CFLs annually, our LED bulbs last and last…
8 incandescent bulbs/year replaced at $1 each = $8 per year in savings.
TOTAL savings over 5 years: $87.50
Our third axiom: Efficiency, especially efficiency that pays for itself, encourages adoption.
Availability: doesn’t matter how efficient, inexpensive, or quickly we need a greener tech solution if we can’t find it. If you’re standing in the light bulbs aisle at your local big box, or browsing your choices in Amazon’s Prime product selection, and you DON’T see LED bulbs, you’re very likely to settle on something else. Availability tends to follow the money, and is therefore the last of our criteria. When a replacement technology is low-cost, quickly replaced, and greatly more efficient, people and businesses will ask for it, and manufacturers will produce it.
Fourth axiom: Regardless of other factors, if a solution isn’t readily available, it won’t be widely adopted.
So, what can the rapid adoption of LED light bulbs tell us about other technology?
Consider a couple other cases of green technology in light of these 4 axioms:
Tesla electrical car
Cost: High (though the new Tesla Model 3 is about the price of the typical sedan at $35,000)
Replacement cycle: Long (average age of the American car is 11 years)
Efficiency: Moderate (approximate savings of $700 per year vs. $1200 driving a conventional, internal combustion car)
Availability: Complicated (months-long wait for the new Model 3, or a 14-day wait for a $100k premium model)
Rapid adoption potential: LOW
Replacement cycle: Non-existent (unless you already have rooftop solar panels and need to replace them?)
Efficiency: Moderate (Consumer Reports’ report on real-world installations of Tesla’s Solar Roof finds a LONG break-even time)
Availability: Moderate (depending on your location)
Rapid adoption potential: LOW
In both these cases, high costs and limited availability obviously slow adoption of a superior replacement.
But wait — there’s more!
Goldman Sachs’s report on The Low Carbon Economy has a lot more interesting information, and digs into the role of policy and regulation in boosting green tech. If you’re a hardcore ecology and economics nerd like I am, it’s definitely worth your time.