LEDs to fill 55% of world’s sockets by 2020, analyst says

If the only market analysis presented at a recent LED meeting sponsored by the Department of Energy is correct, your inventory of lamps and fixtures is going to undergo a dramatic change in the coming years.

Josh Baribeau, senior associate analyst at CANACCORD Genuity, gave an opening presentation this past winter at the ninth annual DOE Solid-State Lighting R&D Workshop.

Below: Slide from Baribeau’s presentation

According to Baribeau, the “WW” stands for World Wide.

Baribeau’s analysis is that by the end of 2020, LEDs will fill at least 54.8% of lighting sockets in the world. The most optimistic of his assessments is that LEDs will be generating illumination in more than 82% of those sockets.

The base forecast takes LEDs from an almost insignificant share of WW sockets in 2012 to roughly 68% over roughly 3,000 days.

No need for subsidies

Driving the forecast—“LEDs do not require subsidies unlike other energy-savings technologies,” Baribeau said. “They are ready now.”

In fact, he asserted, the 55% to 82% range given is not all that optimistic, relative to what’s being said. “GE has 70%, and Philips has said it sees 70% to 80% by 2020. The truth is, retrofit will be a no-brainer for residential.

“In commercial, we listen to the comments of companies like Jones Lang Lasalle,” he continued. “As you probably know it’s one of the biggest property managers in the world. They talk about this [LEDs] a lot.”

To boil the “bullish” case down, then, Baribeau’s contention is that LEDs will soon be the default light bulb purchased by homeowners and apartment dwellers. Commercial purchasers will join the party out of a practical desire to accomplish something sustainable and save energy—with LEDs being a quicker, more-practical way to do this compared to solar or wind projects.

Falling prices driven by BOM

Slide 22 from Baribeau’s presentation (below) details the Bill of Materials for an LED lamp sold as a replacement for a 60W incandescent.

At an estimated retail price of $40 per LED bulb, one-third comprises “Channel Margin,” in CANACCORD’s estimation. Not only will production costs fall over time, Baribeau maintained, but, slowly but surely, time will eat away at that huge margin.

During his presentation, Baribeau also touched on a DOE graphic showing a reduction in “Relative Manufacturing Cost” for LEDs from “1.0” in 2010 to roughly “0.1” in 2020.

Also noted in the presentation:

• Lighting accounts for 17% of worldwide electricity consumption. That means 3,000 Terawatt hours of power was used in illumination in 2010.
• Of 138 U.S. utility rebate programs, there are 423 individual lighting incentives for LEDs, CFLs and other fluorescents. Only 19% are for LEDs, “with an average of $12.50 instant savings.”
• On OLEDs, Baribeau told tedmag.com that “While possibly strong in niche markets, OLEDs are not as likely to take meaningful market share by 2020.”
• Future scenarios could see most lighting hooked up to networks, “leading to greater insight into our energy consumption patterns and optimized electricity generation/distribution.”