Tracking Buildings

Not on track
Tracking buildings

Lighting

On track

Lighting sales by type in the Sustainable Development Scenario, 2010-2030

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Overview

In 2018, LED sales reached a critical milestone, achieving the same share of global residential sales as less-efficient fluorescent lamps (40%). LED deployment is also progressing for commercial lighting and outdoor applications, especially for linear LEDs to replace fluorescent lamps. As LED costs continue to fall, sales of LEDs are on track with the SDS, although continued robust growth is needed to make up over 90% of sales by 2030.
Tracking progress

Lighting efficiency has improved considerably since 2000. The phase-down of incandescent lamps is prompting global technology shifts towards more efficient technologies such as fluorescent lamps (especially in developing countries in Asia), although it has also led to lamps of similar low efficacy, such as halogens, gaining popularity.

Global LED uptake has increased substantially in recent years, rising from a market share of 5% in 2013 to 40% of global residential lighting sales in 2018.

LED sales now appear to have overtaken fluorescent sales in the residential sector, and that share is expected to continue expanding. Nevertheless, many markets – especially the replacement-lamp segment – are dominated by halogen and fluorescent lamps.

To remain in line with the SDS, LEDs need to become the global norm.

Current trends suggest the market is on track to follow the SDS trajectory by 2030. However, to raise the share of LED sales to more than 65% of the residential market by 2025, countries need to take advantage of recent sales trends and update their regulatory policies to keep pace with expected LED performance, which is drastically higher than five years ago.

Countries could also extend phase-out policies to include halogen lamps, which are only marginally more efficient than incandescent ones.

LED prices continue to fall, with notable drops in India owing to its UJALA programme (Affordable LEDs for All). LEDs are now massively produced in many markets, and competition among manufacturers is driving further innovation, wider product choices and lower prices.

China has taken the lead in manufacturing, benefiting from strong financial subsidies and incentives from the government, and prices have fallen substantially to USD 3-5 per LED lamp. Prices are similar in many European markets and in North America.

The next several years will test whether LED technology is a victim of its own success: long lamp lifetimes may mean that a new business model will be needed to promote LED sales, for example to provide lighting in commercial buildings and for street lighting.

Supply abundance and fierce price competition will also put pressure on manufacturers, with concomitant benefits for consumers and the environment.

LED efficacy has improved considerably in recent years. LEDs typically available on the residential market have an efficacy of over 90 lumens of light per Watt of power (lm/W), depending on the model (e.g. directional, non-directional, tubular).

LED performance is also continuing to improve rapidly. In many markets, the efficacies of LEDs available for residential use already reach 80-120 lm/W, and they are projected to increase to an average of 160 lm/W by 2030, which corresponds to the SDS level. In fact, some products for commercial uses such as office and street lighting have already reached or exceeded these efficacies.

In contrast, efficacies are much lower for compact fluorescent lamps (around 60 lm/W) and halogens (less than 20 lm/W) and will not improve, particularly as industry has shifted focus to LED technology and product innovations.

Sales of incandescent lamps, with efficacies of around 13 lm/W, have dropped to less than 5% of the market.

Halogen and compact fluorescent lamp sales peaked in 2015 and have since declined to about 50% of the residential market.

Typical efficacy of residential lighting in the Sustainable Development Scenario, 2010-2030

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As LEDs have become more efficient and affordable, their wider use in decentralised energy systems has been a boon for energy access. During 2010‑17, 130 million off-grid solar-based lighting devices were deployed, mainly in Sub-Saharan Africa and South Asia (REN21, 2018).

In 2016, 94% of them were pico-solar installations with energy-efficient LEDs, but pico sales have since fallen, while plug-and-play solar home systems are emerging.

Effort is needed to increase deployment of energy-efficient LEDs as part of access strategies: in the SDS, 1.2 billion people gain access to electricity by 2030, and energy efficiency is the key to ensuring sustainable access.

Governments should take advantage of the growing LED market (and lower LED costs) to raise minimum performance and quality requirements for lighting products.

For example, in 2018, EU Member States voted to phase out inefficient halogen lamps and compact fluorescent lamps in 2021, while introducing minimum performance and quality standards for LED lamps and luminaires. This single regulation applies to household, commercial, industrial and street lighting.

United for Efficiency, led by UN Environment, is also updating lighting model regulations for developing countries.

In addition to updating standards, further effort is needed to expand current lighting policy coverage to markets that are still unregulated. The phasing-out of incandescent, halogen and compact fluorescent lamps and the setting of efficacy and quality requirements for LED lamps is critical for general lighting applications in developing countries.

Government action on this recommendation would help ensure that lamp efficacy reaches 160 lm/W by 2030.

Governments can also take advantage of the growing LED market to update or introduce labelling schemes.

Labelling programmes that inform consumers about the higher efficacy of LEDs have been applied in many markets, including China, Europe, India and the United States. Adopting these labelling schemes in other markets would encourage consumers to shift from halogen and fluorescent lamps to LEDs.

Design regulations for lighting applications and services should also be revisited. In many countries, energy performance standards for buildings (e.g. lighting energy use per square metre) have not been updated to reflect the rapidly changing lighting market.

These standards should recognise that LED lamps are twice as efficient as fluorescent ones, and are much more amenable to lighting controls (i.e. adjustment of light output and even colour using fixture sensors). Improved metrics for quality control and better suited testing procedures are also critical to ensure LED energy-performance and quality.

Market-based solutions, such as using bulk procurement and energy service providers, can help drive LED costs even lower while increasing uptake.

India has demonstrated that it is possible to deploy LEDs rapidly on a large scale when the right financing and market mechanisms are in place: it has one of the largest LED markets in the world thanks to its national UJALA programme, which uses bulk procurement to offer bulbs that are 50% more efficient than other lamps typically available.

More than 350 million LED lamps have been sold since 2015, and the programme is aiming for 770 million by 2019.

Another innovative market-based solution is for private sector partners to establish themselves as lighting service providers rather than equipment sellers.

Several businesses offer contracts whereby building owners can contract lighting services (i.e. in lumens delivered) rather than purchase lighting equipment. The business takes care of all lighting system operations and maintenance (O&M), reducing the burden on building owners, and in addition, this approach incentivises investment in lamps of higher quality and longer service life because they reduce the O&M costs for the service provider.

Governments can also increase market volumes through green public procurement schemes that bring new and better lighting technologies to national markets, but standards for lighting products are needed to ensure that public buildings choose high-performance products.

Governments can also provide incentives to manufacturers for RD&D of high-efficiency LEDs.

Innovation gaps

Although the shift to solid-state lighting (SSL) products is gaining momentum, LED technologies have not yet reached maturity. There are still innovation gaps that make it challenging to continue improving the efficacy of LEDs (to exceed 160 lm/W by 2030), develop the best regulation metrics (with respect to energy performance and light quality), and ensure that smart lamps and luminaires generate energy savings.

Closing the technical gaps for SSL sources and components can not only increase the efficacy of lighting products, but also ensure they provide high-quality light at prices that are competitive with the less-efficient, older technologies (such as fluorescent, halogen and incandescent lamps). Clear policy guidelines on quality and performance are therefore needed for SSL improvements.

Smart lamps and luminaires could significantly reduce electricity consumption for lighting by adjusting to daylight levels, room occupancy and interactions with building energy management systems. However, the additional energy used for network communications and rebound effects may offset these savings if clean energy policies and technologies do not provide appropriate solutions for growing consumer expectations.

Policy makers need robust and relevant metrics to set appropriate quality and performance requirements. With the transition to SSL, some of the lighting metrics have become outdated and are no longer the best for determining policy measures. For example, the ‘colour rendering index’ (CRI) metric was developed in the 1930s and uses an incandescent lamp spectral output as its reference source. This means that lamps mimicking incandescent light output will score 100 and other spectral outputs that have been judged more visually appealing score lower.

Additional resources
References
  1. Government of India, Ministry of Power (2019), National UJALA dashboard, http://www.ujala.gov.in/.
  2. Halper, M. (2018), "Signify: Sales will not grow this year", LEDs Magazinehttps://www.ledsmagazine.com/articles/2018/07/signify-sales-will-not-grow-this-year.html.
  3. REN21 (Renewable Energy Policy Network for the 21st Century) (2018), Renewables 2018: Global Status Report, , http://www.ren21.net/wp-content/uploads/2018/06/17-8652_GSR2018_FullReport_web_-1.pdf.
  4. US DOE (US Department of Energy) (2018), 2018 Solid-State Lighting Project Portfoliohttps://www.energy.gov/sites/prod/files/2018/02/f49/ssl-portfolio-2018.pdf.
  5. VLT Lighting (2016), "Easing LED market growth in the near future", Shenzhen VLT Lighting Co., http://www.vltlight.com/news/detail.php/id-227.html.


Acknowledgements

Michael Scholand (4E TCP), Mark Ellis (4E TCP), Patrick Blake (UN Environment)