A rapid tech shift: adoption rate of LED lighting is on the way to save US $20/billion a year in electricity costs

“The rapid adoption of LEDs in lighting marks one of the fastest technology shifts in human history,” Goldman Sachs stated in a new report and is on track to save US citizens and businesses $20 billion a year in electricity costs within a decade.  This would lower U.S. CO2 emissions by some 100 million metric tons a year.

The rapid shift to LED lighting is, in Joe Romm’s terms, a “miracle” every bit as remarkable — and every bit as unheralded by the major media — as the solar miracle, the battery miracle, and the electric vehicle miracle.  This article is from Romm’s post on August 2, 2016.

As recently as 2009, this country didn’t have even 400,000 installations of common home LED bulbs, according to the November 2015 Department of Energy report “Revolution… Now The Future Arrives for Five Clean Energy Technologies.” And yet by 2012, we had 14 million — and by 2014 we had whopping 78 million installations.

LED chart

Note: Kilolumen is a measure of visible light output by a source. Price data is in nominal dollars. Via DOE.

This revolution has been driven by “sharp cost reductions and performance improvements, relatively short replacement cycles for incumbent technologies, and aggressive policy support (including bans on incandescent technology in major markets such as the U.S., the E.U. and China),” as Goldman Sachs has detailed in its recent reports on “The Low Carbon Economy.”

Since 2008 alone, prices for LED lightbulbs have dropped a remarkable 90 percent, and you cannow buy a 60-watt-equivalent LED bulb for a little more than $3.

Goldman forecasts “that LEDs will account for 69 percent of light bulbs sold and over 60 percent of the installed global base by 2020.” This chart of where LEDs have been and where Goldman Sachs projects they are going in the near term is from their July 20 report, “The Low Carbon Economy: Our Thesis In 60 CHARTS.” It compares LED adoption with the adoption of hybrid and electric vehicles and solar PV and wind.


Currently the best LED bulbs cut electricity use by 85 percent compared to incandescent light bulbs and by 40 percent compared to fluorescent lights. By 2020, Goldman expects those savings to increase to over 90 percent and 50 percent respectively.

At the same time, LEDs can last for up to 5 years of nonstop use — or a few decades if used just a few hours a day. This is 50 times longer than incandescents and some 3 to 7 times longer than fluorescents. At the same time, LED bulbs provide superior light quality than compact fluorescent lights (CFLs). For all these reasons and more, GE announced earlier this year it would stop making CFLs “for the U.S. market and instead focus its consumer lighting efforts on LED lamps.”

With the initial price dropping sharply while the ultra-low lifecycle costs also keep dropping, you end up with a revolution — one that is happening even faster in the United States:


With such an unprecedented technology revolution, it’s no wonder that, in 2014, the Nobel Committee awarded the Physics Prize to three scientists for their 1990s invention of “efficient blue light-emitting diodes [LEDs], which has enabled a bright, energy-saving white light source.”

And in case you think that one small product you can hold in the palm of your hand can’t be a game-changer in the arena of energy and climate solutions, think again. The nation’s total electricity bill for residential and commercial customers is now more than $320 billion. Of that about 15 percent is lighting — nearly $50 billion a year.

Goldman Sachs projected last month that LED lights “are on track to cut power consumption for lighting… by over 40 percent.” That would provide annual savings of more than $20 billion for consumers and businesses within a decade. And that in turn would reduce U.S. CO2 emissions by some 100 million metric tons a year.


I have previously noted that electricity sales in this country have been flat for nearly a decade even as the economy has kept growing. This shift has been driven federal energy efficiency standards for appliances (including lighting) and a growing embrace of policies to promote efficiency at the state level.

Clearly, the LED lighting revolution will help ensure that trend continues for at least one more decade. Indeed, the only plausible way the United States could return to an era of significant electricity demand growth is if the electric vehicle revolution takes off in the 2020s, which as we’ve seen is entirely possible, if not likely.

The energy and climate benefits of LEDs are so large, it’s no wonder the U.S. Department of Energy has been working to advance the technology and promote their deployment for over 15 years. And it’s no surprise the DOE has worked with countries like India on technical and analytic approaches to rapidly accelerate their adoption of LED lights.

Indeed, most of the major countries in the world have adopted policies that have sped up the adoption of LEDs, the most important of which have been the mandatory phaseout of inefficient incandescent lights:


On top of all that, in 2015, the world’s energy ministers embraced a Global Lighting Challenge, which is “a global race to accelerate phase-in of high efficiency, high-quality and affordable advanced lamps and lighting systems with a target of achieving cumulative global sales of 10 billion such units as fast as possible.” LED lighting will be a central focus.

As with solar energy, advanced batteries, and electric vehicles, the LED lighting revolution may not be televised by the major media, but it is happening at a torrid pace nonetheless — with a big boost from government deployment policies.