The LED lighting revolution

Principal, Strategic Advantage

A staggering 27 percent of electricity use in North America goes simply to power lighting—but that may be about to change. Indeed, the LED lighting revolution looks set to cut that figure in half.

Incandescent light bulbs are a hundred-year-old technology whose time has passed. Nowadays, incandescent bulbs might as well be called “heat bulbs,” for 80 percent of the electricity they consume generates heat, not visible light. LED lights, by contrast, can reduce energy use by 80 percent.

Lighting a global path forward

LEDs’ history of dramatically enhanced price performance was predicted by Haitz’s Law—which observes that the cost per lumen of LED light output has fallen by a factor of 10 every decade even as the light generated per LED has increased by a factor of 20 during the same time. Putting those figures together, the price performance of LEDs has been increasing by a factor of 200 every decade.

Indeed, LED lights are on track to be the dominant form of lighting by 2020. Global adoption of LED lighting technology can help save billions of dollars in electricity costs by diminishing lighting loads, but that’s only the start. In a double savings, diminished heat build-up in homes and offices can also diminish the need for air conditioning, further lessening demand for electricity.

Like Haitz’s Law, Moore’s Law discusses exponential gains in technological capability over a sustained period, a trend that has profoundly affected society. Moore’s Law predicts that CPU processing power will double every two years for processors at the same price point. Indeed, in a living outworking of Moore’s Law, modern smartphones offer more raw computing power than IBM’s largest mainframe did just 15 years ago. Thus computers are growing quicker, more affordable and smaller by the year, and this push toward ever greater efficiency is driving business models around the world.

Creating brilliant business models

Modern LED technology is intersecting with the Internet of Things (IoT), assigning IP addresses to individual lights to allow lighting control through a smartphone app. It’s another step toward the smart home, in which users can control everything—lighting, heat, appliances, security features—from anywhere by the simple touch of a button.

Or consider how the world’s poorest people spend $38 billion each year to pay for kerosene as fuel for lighting—20 percent of global lighting expenditures for one-thousandth of the world’s generated light. But as LED lights and solar chargers become ever more affordable, emerging business models aim to offer efficient alternatives.

WakaWaka LED light, for example, uses a solar charger to provide ultra-bright light at four different intensity settings while also allowing the charging of a mobile phone. Impoverished families that lease such a light spend less than they would on kerosene, allowing them to enjoy better lighting while improving their personal economy. What’s more, such lights win over kerosene by not releasing toxins into the air—and at the end of the lease, the family owns the equipment.

Jim Harris is the author of Blindsided, an international bestseller published in 80 countries worldwide. Each year, he speaks at 40 conferences around the world.