Outdoor LED Lighting – The Price of Light

Comparing the Price of Lighting - Edison to LEDs

Many of our technologies undergo tectonic shifts, in a well-known example, Personal Computers through the relentless process of innovation opened up many new opportunities in computing. Today the hand held Tablet is changing the way we read or watch videos. These are classic examples of what Clayton Christensen documented as disruptive technology change. He also outlined another class of technology change which he labeled incremental. Lighting and lamps use to be changing very incrementally and slowly. It was familiar, always the same product, and never changed that much. Fluorescent, metal halide or high pressure sodium bulbs are all based on the same principles of heating an element until it glows. This form of lighting all stem from Edison’s 1879 integration of scientific principles into a practical device that has been used continuously over the past one hundred plus years, and is familiar to us, and to our grandparents.

Tectonic Shifts in the Price of LED Technologies

LED outdoor lighting represents another side of technology innovation and is undergoing a shift from incremental to disruptive change. This disruption in lighting technology is radically improving the price we pay for lighting performance. Recent innovations in core LED technologies have resulted in outdoor lighting fixtures that are roughly equivalent in price to commercial high intensity discharge (HID) outdoor lighting fixtures. When you consider the reduction in energy costs these technologies bring, the economics become even more favorable for LED lighting.

The Price of Lighting in History

Lighting has a long history of improving price performance, and it is often economics that drive this disruption. Whale oil went from 30 cents per half-gallon in 1831 to $1.92 per half gallon in 1854. This 6.4X change in price drove people to adopt town-gas as a primary lighting source.

Our current change in lighting sources from discharge types of lighting to solid-state lighting is being driven by similar factors. Increases in the price of electricity and the cost of skilled labor used in maintaining commercial lighting are forcing detailed examination of how we light our outdoor environments. The Energy Information Administration has documented that national average price per kilowatt has increased by 32% from 2000 to 2010. The median weekly wage for an electrician has risen by 22% over the same period as recorded by the Department of Labor.

LED Lighting – Radical Reduction in Costs

When you normalize historical prices of light sources to light output (lumens), it becomes evident how our lighting has had radical reduction in costs over the past two hundred years. In commercial outdoor lighting, with the transition to LED lighting sources, we are now just going through another tectonic shift.

Twenty years ago the Compact Fluorescent Lamp (CFL) represented a 10X improvement over incandescent lighting. The LED outdoor fixture is now driving another 10X plus change in lowering lighting costs. Like the Personal Computer, an economic benefit comes to those who leverage these changes into their operations quickly and successfully.

Historic Price Changes in Lighting over Past 200 Years

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