Is the CFL era over? Rapid changes in the Residential Lighting Market
Since early 2012, when the Energy Independence and Security Act (EISA) began to have an impact on the presence of traditional incandescent general purpose lamps in retail stores, the residential lighting market has undergone rapid changes. Before the implementation of EISA, consumers were typically faced with a simple choice when they needed to replace a light bulb—either buy an inefficient traditional incandescent lamp or buy a more efficient, spiral-shaped compact fluorescent lamp (CFL). Energy-efficient lighting program sponsors in regions with robust lighting programs, such as the Northeast, the Pacific Northwest, and California, were able to influence this choice by providing incentives to manufacturers or retailers who sold CFLs. By providing incentives for CFLs, lighting programs could make the price that a consumer paid for a CFL less than or equal to the price of an incandescent lamp. By early 2015, most traditional incandescent lamps were no longer available in retail stores; similar looking halogen A-lamps that meet the efficiency standards set forth in EISA, and are 25-30 percent more efficient than traditional incandescent lamps, have taken their place. However, EISA-compliant halogen lamps are still at least 3 times less efficient than CFLs with equivalent light output. Also in early 2015, light-emitting diode (LED) lamps began to appear in large numbers on retail shelves as an alternative energy-efficient lamp technology competing with CFLs. Now consumers are faced with three or more choices when they want to replace a light bulb—a spiral or A-lamp CFL, an LED A-lamp, and an EISA-compliant halogen A-lamp.
LED lamps have advantages over CFLs—they reach full brightness instantly, many are dimmable, most last two to three times longer CFLs, and they are typically 20-30 percent more efficient than CFLs. Viewing LED lamps as the energy-efficient lamp of the future, many lamp manufacturers are putting their research and development dollars and marketing resources into LED lamps. Some manufacturers, such as General Electric, have announced that they will no longer produce CFLs in the near future (General Electric 2016; DNV GL, 2016a). At the same time, some energy-efficient lighting programs have shifted their focus away from CFLs in favor of LED lamps, and a few have stopped incentivizing CFLs altogether (DNV GL, 2016a).
Lamp manufacturers and lighting program sponsors aren’t the only actors impacting the residential lighting market—the U.S. Environmental Protection Agency’s (EPA) ENERGY STAR program is changing its specifications for which lamps will receive ENERGY STAR certification and which will not. The ENERGY STAR program has worked for more than 20 years with lamp manufacturers, lighting program sponsors, and other stakeholders to increase energy-efficiency standards for lamps while ensuring that the lamps that they certify are high quality. ENERGY STAR certification is usually a pre-requisite for inclusion in most energy-efficient lighting programs. Under the new ENERGY STAR Lamp Specification (ENERGY STAR 2.0), many omnidirectional LED lamps with shorter lifespans (15,000 hours) that currently do not qualify for ENERGY STAR will now be able to qualify (U.S. EPA 2016; NEEP 2016). However, there are no CFLs that currently qualify for the ENERGY STAR program that will meet the ENERGY STAR 2.0 specifications when they take full effect in January of 2017 (NEEP 2016). In short, ENERGY STAR 2.0 is helping to move the market for energy-efficient lamps away from CFLs and toward LED lamps.
So given these developments, is it time to declare the end of the CFL? While it’s clear that LED lamps already have a strong presence in the residential lighting market and represent the future of energy-efficient lighting, it might be premature to make them the only energy-efficient lamp option on the market. In the Pacific Northwest states of Idaho, Montana, Oregon, and Washington, the shelf average price of an LED A-lamp was $6.65 per lamp as of late 2015/early 2016. At the same time, spiral CFLs were $2.91 per lamp, which was less than half the cost of an LED A-lamp, and EISA-compliant halogen lamps were only $1.67 per lamp, which was almost one-quarter the cost of an LED A-lamp and $1.24 less per lamp than a CFL (DNV GL 2016a). Trends were similar in California as of late 2015/early 2016 with LED A-lamps averaging $6.70 per lamp, spiral CFLs $2.28 per lamp, and EISA-compliant halogen lamps $1.92 per lamp (DNV GL 2016b). While general purpose LED A-lamp prices have fallen rapidly, they are still the most expensive choice in retail stores, on average, for consumers. For the price-sensitive consumer, who may not fully understand the long-term money savings potential of an energy-efficient lamp, paying $5.00 to $7.00 for an LED A-lamp may be out of the question. Furthermore, the cost for an energy-efficient lighting program to bring the price down of an LED A-lamp down to the price of an EISA-compliant lamp is substantially higher than it is to bring down the price of a spiral CFL.
EISA-compliant halogen lamps will be available to consumers until at least 2020 (NRDC 2016). Because of this, energy-efficient lighting program sponsors might consider continuing to incentivize CFLs in the short-term (in addition to incentivizing LED lamps) as way to influence price-sensitive consumers to choose efficient lamps over inefficient ones.
Geoff has done a more indepth analysis on this topic. Come see it presented by Jenna Canseco at ACEEE Summer Study on Tuesday, August 23.
DNV GL, 2016a. 2015-2016 Northwest Residential Lighting Long-Term Market Tracking Study (forthcoming).
DNV GL, 2016b. The California Retail Lighting Shelf Survey Online Tool. https://www.bulbstockdata.com/Projects62/
DNV GL, 2015. 2014-2016 Northwest Residential Lighting Long-Term Market Tracking Study.
General Electric, 2016. “GE is breaking up with compact fluorescent lamps.” http://www.gereports.com/say-goodbye-say-hello-ge-stops-making-cfls-says-go-go-go-to-leds/
NEEP, 2016. “The changing of the guards in residential lighting.” http://www.neep.org/blog/changing-guards-residential-lighting
NRDC, 2016. “Fact Sheet: New Light Bulb Energy Efficiency Standards Will Save Consumers Billions, Reduce Harmful Pollution, and Create Jobs.” https://www.nrdc.org/sites/default/files/lighting-standards-2016-FS.pdf
U.S. EPA, 2016. “Energy Star Program Requirements Product Specification for Lamps (Light Bulbs): Eligibility Criteria 2.0.” https://www.energystar.gov/sites/default/files/Lamps%20Version%202.0%20Updated%20Spec.pdf
 The “average shelf price” is the average price per lamp paid by consumers in retail stores. This is not a sales-weighted price. For further details, please see DNV GL 2016a.