LED prices may not be too high for consumers for long

Published 5/26/2014 2:31:15 PM

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By Joe Salimando 

With the 100W incandescent bulb banned by law, and the 60W and 40W incandescent units set for similar U.S. government action in 2014, consumers now face three choices for replacement of the incandescent bulbs—halogen, compact fluorescent lamps (CFLs), or LEDs.

Many in the electrical industry thought it would take a while for LEDs to gain ground, due to their high prices. Opinions had been voiced that CFLs would fill in the transition from low-cost incandescents to affordable LEDs.

Recently, however, it appears that LEDs are already falling in price, enabling consumers to choose to go right on by CFLs and use LEDs now.

Some recent, unrelated news items serve as evidence to this point:

Consumer will pay more

Last week, in a conference call with stock analysts, Robert Gfeller, EVP of merchandising at Lowe’s, said that consumers will spend more.

Gfeller said, “The customer is willing to spend more for the energy savings and longer life, and we are capitalizing on this same value proposition to drive strong comps within the interior light bulb category as consumers are quickly transitioning to longer-life LED bulbs.”

Lumens-per-dollar

This measure, perhaps not yet as popular as the watt number was for incandescents, is making inroads on industry awareness. When Cree introduced its XLamps XB-D product earlier this year, the company noted that it “doubles the lumens per dollar of previously available LEDs.”

Falling towards the sweet spot

A Taiwanese news website reported on an assertion by LEDinside, a research firm, saying “Industry executives unanimously agree US$10 is the ‘sweet point pricing’ for LED lamps designed to replace 40W incandescent lamps, meaning that average consumers tend to purchase the lamps at this price point…The ‘sweet point’ for LED replacements for 60W incandescent bulbs is set at US$12.”

Prices are getting close to those numbers faster than expected, according to the report. LEDinside’s research reportedly showed, “after dropping steeply in December last year, LED prices offered at retail locations marked down steadily in January, reaching a median US$19.6 worldwide for replacements for 40W incandescent bulbs. In South Korea, the retail prices even posted below US$10.”

Price check: The Home Depot

A recent check of prices on homedepot.com showed a $29.97 price for a 14W LED flood light bulb. The price posted for a two-pack of 8.6W replacements for 40W incandescent was $19.94, bringing the unit price under $10 each.

An LED for under $5

A news release from Lemnis Inc. of San Francisco noted that, with the introduction of its 200-lumen Pharox BLU LED bulb at a suggested retail price of $4.95, it saw “a 500% increase in sales over average weekly sales.”

JetsonGreen.com reported a $6.95 price for a Pharox 300 BLU bulb; output, 360 lumens.

Does it sound like there should be a catch? Look at those lumen-output numbers. Gizmodo.com provided analysis for greens/consumers on the under-$5 bulb—“…it only produces about 240 lumens of light. Which is almost half of what you'll get from a 40 watt incandescent bulb. So Lemnis Lighting is actually positioning it for use mostly in accent lighting, and not as a replacement for every lamp and fixture in your home.”

© 2014 The Electrical Distributor. All rights reserved.

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