Summary

Cost of LED Lighting for Industrial or Commercial Use

Linear LED Fixtures for Industrial Use

• For the past decade, fluorescent (linear) fixtures have been the most common lighting fixture found in commercial and industrial settings.
• Linear LED fixtures can more easily be retrofitted into existing fluorescent fixtures, therefore will more likely be adopted over time.

Linear LED Fixture Price Over Time

• In 2012, Cree introduced a LED linear fixture for industrial lighting called the LED linear luminaire.
• In 2012, a LED linear fixture luminaire cost $155/klm. 
• In 2013, the typical cost of a LED linear luminaire fixture was $91/klm. 

• The typical price of an LED linear fixture at the conclusion of 2014 was $53/klm. 
• In 2015, the typical cost of a LED linear luminaire fixture was $43/klm.
• In 2016, the typical cost of a LED linear luminaire fixture was $30/klm.  
• In January 2020, the price of a NaturaLed Linear Luminaire unit (3200 Lumens) can be found for $41.79, which is $13.06/klm.

Research Strategy

Demand Has Driven Price Down

•  Manufacturing costs for LED lights have decreased since 2012, which of course leads to lower overall pricing.
• The Department for Energy in the US has tracked LED bulb prices since 2010. Then, they cost around $80 per bulb, whereas now they are less than $5.
• Another reason behind the price decreases is LED bulbs simply grew in popularity. Greater demand led to higher production volumes which naturally decreases per unit costs. Some demand in the US was caused by utility incentives to lower energy consumption, which led to more consumers purchasing LED bulbs.
• Furthermore, state and local energy incentives (in the US and other countries) would have also seen commercial and industrial LED demand increases.
• LED products have also successfully penetrated the automotive industry, which also leads to higher demand from automotive manufacturers around the world (especially in the US and APAC).
• The actual of efficiency of LED lighting also got better since 2012, going from 60 lumens to a predicted 150 lumens by 2020. Better technology is also going to lead to greater demand, which will drive down the price.
• Prices have declined so much that greens grown indoor under LED lights can now be sold at the same price as outdoor farmed versions.
• Higher-powered LED products have equally dropped in price over the years. One major factor is the falling cost in LED chips used in manufacturing.

Slowing of Price Declines

• Price declines have slowed recently, however. This is because of the global economic recession, prices nearing actual manufacturing costs and US-China trade disputes. China is the main manufacturing hub for LED chips, so when prices there do not fall rapidly, this leads to LED bulbs and packages not dropping in price as much.
• It is actually expected that the price of LEDs may start to rise slightly, as Chinese chip manufacturers have reported higher raw material costs. However, the industry is extremely competitive and instead of raising prices, so far bulb manufacturers have just been swallowing the reduced margins. Instead, they are looking to premium or value-added LED products to make up better profits.
• Many manufacturers have exited the LED market as the margins are too slim.
• In the future, to combat this, new innovations are expected to try to shift chip material from sapphire to silicon, as well as developing LED bulbs that only require 1 chip (instead of 4-6).
• If technology can be adequately developed to use silicon in LEDs, this will greatly drop the price of the bulbs even more.

1. LONGER LIFESPAN

• LEDs have a longer light lifespan when compared to other traditional forms of commercial lighting. The average LED could last between 50,000-100,000 hours, which is two to four times longer than most fluorescent, metal halide, and sodium vapor fixtures.
• When compared with the average incandescent bulb, LEDs last up to 40 times longer. For example, fluorescent lights only last between 7,000-15,000 hours, high-intensity discharge (HID) lights last 6,000-24,000 hours, high-pressure sodium lights (around 24,000 hours), and low-pressure sodium lights (18,000 hours).
• As such, LEDs require less frequent replacements and cut down on the associated costs of maintenance labor and parts replacement.

2. MORE ENERGY EFFICIENT

• LEDs generally consume low amounts of power. Most LED lighting retrofit projects usually improved the overall energy efficiency of facilities where they were employed by as much as 60-75%.
• Depending on which other lighting was previously installed in the facility, the improvement in energy efficiency could be as much as 90%.
• The source efficiency of LEDs ranges between 37-100 lumens/watt. However, their system efficiency is around 50 lumens/watt and above. For fluorescent lights, that system efficiency drops to less than 30 lumens/watt, HID lights (<30 lumens/watt), and high pressure & low-pressure sodium lights (<50 lumens/watt).

3. SAFER LIGHTING

• The top lighting hazard is in heat emission. However, LEDs ace this criterion compared to other forms of commercial lighting, as they put out almost zero heat emissions.
• On the other hand, high-pressure and low-pressure sodium lights give off approximately 15% heat emissions, as well as fluorescent lights (roughly 15%), and incandescent lights (90%).
• Due to the low-power consumption of LEDs, they operate better under low-voltage electrical systems, which makes them safer.

4. BETTER COLOR RENDERING INDEX (CRI)

• CRI measures the ability of lights to produce the true color of objects in comparison with that produced by natural light (ideal source).
• For most applications, a high CRI is usually desired for lighting, and LEDs have substantially high CRI ratings between 65-95/100 (excellent).
• However, for other forms of commercial lighting, their CRI is generally lower. For example, low-pressure sodium lights have inferior CRI values, and are generally rated 25/100 in terms of CRI, with a "monochromatic yellow light that inhibits color vision at night."
• Metal halide lamps usually have CRI of up to 60/100, fluorescent lights (between 62 and 80), and some HID lights have ratings in their mid-90s.

5. DIRECTIONAL EMISSIONS

• LEDs emit light in 180 degrees, which is more efficient than every other form of lighting.
• "Other commercial forms of lighting emit light 360 degrees around the source. As 360-degree emissions necessitate accessory devices to reflect and/or redirect the light, the costs for the system in general increase and inevitably results in losses, meaning that the device is necessarily less efficient than it otherwise would be."
• However, LEDs eliminate the problem of emitting light into the ceiling and provides the savings in terms of the system's overall energy efficiency.