A NY Times article appeared today on the effect of the new lighting efficiency regulations and it describes the complexity facing consumers as new technologies enter the market. What this article first made me realize was that the advent of the new efficiency standards is a real world example of the “Porter hypothesis" in action. Michael Porter at Harvard Business school has postulated that strict environmental (or energy efficiency) regulations can under certain conditions lead to increased innovation. This hypothesis is contrary to what I call the simpleminded Econ 101 view of the world, in which regulations are invariably less efficient than pricing mechanisms in inducing innovation. In any case, these particular regulations have clearly induced innovation in an industry that has been famously slow to change. Having old depreciated plants churning out incandescent bulbs is extremely profitable, so there was little incentive for the lighting companies to innovate except in certain niche markets driven by other efficiency policies (like utility efficiency programs promoting efficient lighting in California).
I’ll say more about the high level implications of such regulations in another post, but I wanted to describe our own personal experience with new lighting technologies for our new house. There are a lot of ceiling cans in the house, and the previous owner had used CFLs in most of them. The decorative parts of the cans were original equipment, about 12 years old, so they looked dingy and needed to be replaced. Our contractor said that would cost about $20 per can. He brought us a new LED downlight and said it cost $50 and could quickly be placed into every can. They use 11W and give off as much light as a 60W incandescent, but our perception was that they were much brighter than a typical bulb because they were directional. They come on very rapidly and can be used on dimmers with no problem (for some reason they don’t come on quite as quickly when dimmed, but are about as fast as incandescents in turning on when at full brightness). We tried the light in our old house to see if the color rendition was much different than an incandescent bulb, and we couldn’t see any difference. My wife even gave them her seal of approval (she hates CFLs and would never have allowed them except in a few fixtures). Finally, the long life of the LEDs (35,000 hours, or 35 years at 3 hours/day of use) was really important to us because we have high ceilings in the new house, and in a house with 48 ceiling cans that’s a lot of trips up and down a ladder to replace burned out incandescents. I had no interest in wasting my time doing that, so the LEDs were just the ticket. And we would have had to spend $20 anyway to replace the decorative parts of the can, so the economics were a lot better than in some other applications.
Here’s a link to the latest version of the lights we chose (updated July 2013). Definitely stick with major manufacturers for new technologies like LEDs. We had one out of 48 LEDs go bad on us, but that one was promptly returned for an exchange. We were told that the newer LEDs have a square LED active surface, whereas most of the older ones use individual high intensity LEDs that are shaped like the ones on your stereo (but are of course much more luminous). Go for the square LED active surface.
Finally, a note to people who are upset by the changes induced by the new regulations: you’ll still get to buy incandescents, they’ll just be lots more efficient. Eventually LEDs will sweep all the other technologies away, and I’d expect that to happen in 5 to 10 years, but we’ll see. The main lesson of rapid adoption of efficiency technologies over time is that they need to be better than what they replace to gain wide acceptance. That’s why the good light of LEDs combined with the much longer lifetime and lower heat output makes them such a powerful competitor to the standard bulbs (as well as to CFLs). And with most electronic devices, prices pretty much always go down, and we’re nowhere near the theoretical limits of efficiency for lighting, so more progress lies ahead. Exciting times!