I recently attended LightFair — the preeminent lighting industry conference in the U.S. — where LEDs have completely taken over the industry. While the aisles in the local hardware store may still be a mix of older lighting offerings, this year’s conference, showcasing the latest and greatest lighting, could easily be re-named ‘LED Fair’. In fact, the occasional fluorescent or incandescent product seemed completely out-of-place – almost anachronistic – making it clear that LEDs are the undisputed winners in lighting. So, now that LEDs have won, the main question is, What does the industry need to do to drive mass adoption?
One aspect of LED adoption that is not well covered is how LED system design factors into adoption rate. All of the non-LED components in an LED luminaire comprise the Balance of the System.
Because LEDs are fundamentally different from legacy lighting technologies (incandescent and fluorescent), it’s crucial to understand how the integration of LEDs with the other components in the fixture can drive functionality and economics. Regardless of lighting market segment – residential, commercial, municipal, etc. – performance and a viable value proposition are keys to adoption. And, it’s critical that the industry and customers focus on high-quality systems, otherwise LEDs will deliver a ‘CFL’ type of experience, with poor quality light and a shorter lifetime than expected.
LED luminaires (otherwise known as fixtures for non-lighting folks) are made up of a number of parts. There are, of course, the LED packages (the small semiconductor chips that produce light when an electrical potential is placed across them). This has been the focus of the industry to-date and there will be continued improvements in cost and performance. But the LEDs are only one part of a larger whole. The balance of the system makes up the other 60-70% of the luminaire’s cost and creates the real value. To make an LED system, LED chips must be combined with:
- Drivers — Devices that convert the incoming line voltage into a voltage the LEDs can use and also deliver power to the LEDs when needed;
- Thermal management systems — Like all semiconductors, LEDs are most efficient and long-lasting when they run cooler;
- Optical systems — Responsible for shaping or controlling the light output; and
- Fixture itself — The mechanical parts that hold all of these systems together.
So how does the quality of the system drive adoption? The performance of these elements – when well-integrated into a successful system — is what determines how efficient an LED-based luminaire really is, how well it delivers light, and how long it lasts – all factors that go into the overall value of an LED investment. If an LED luminaire purchase delivers on the energy-reduction and long-lifetime promises, while providing excellent light for a given application, the customer, and – over time – the market, will embrace what LEDs have to offer, thereby accelerating adoption.
To date, the financial markets have been putting a lot of value on the companies making the substrates LEDs are grown on, the reactor systems used to grow LEDs, and the actual LED chips and packages. This is not where the majority of the system cost and value will be long term. As price of the LEDs continue to decline, the balance of the system will hold more and more of the overall value. (This same dynamic has been at work in the photovoltaic market where the cost of the solar cells themselves is rapidly decreasing and becoming commodity parts. The value is now in the balance of the systems — the inverters, storages systems, panels, etc. — and the integration of the cells into this system.) This is one of the reasons some of the LED producers have started to move up the value chain and produce more of the overall system.
What about LED chip costs? They’re definitely declining, and you will see industry-wide efforts to drive costs out of LED systems across all market segments (more on that in a later post). But it is important to keep in mind that the value that LED systems deliver is a function of much more than the LED itself. It is the integration of these complex systems – which the team at Digital Lumens has been designing and building for the past 13 years.