Lighting Industry Trends

Suzanne M. Kirchhoff
Analyst in Industrial Organization and Business

More than 4 billion incandescent light bulbs (sometimes referred to as “lamps”) are in use in the United States. The basic technology in these bulbs has not changed substantially in the past 125 years, despite the fact that they convert less than 10% of their energy input into light. Improving light bulb performance can reduce overall U.S. energy use. About 20% of electricity consumed in the United States is used for lighting homes, offices, stores, factories, and outdoor spaces. Lighting represents about 14% of residential electricity use.

The Energy Independence and Security Act of 2007 (EISA 2007, P.L. 110-140), imposed higher efficiency standards for manufacturers and importers of general use, screw-base light bulbs commonly used in residential fixtures, that begin January 1, 2012. EISA 2007 did not ban incandescent light bulbs. Instead, the law mandated that bulbs manufactured or imported after phase-in dates specified in the bill meet higher efficiency standards—about 25%-30% more efficient on average. The law left it up to the industry to determine which products best meet those requirements. Congress is now debating proposals to repeal or delay implementation of the lighting efficiency provisions. The Better Use of Light Bulbs (BULB) Act of 2011 (H.R. 2417) would repeal standards for general service incandescent bulbs. The House by voice vote on July 15, 2011, passed an amendment to the FY2012 Energy and Water Development Appropriations Bill (H.R. 2354) to prohibit funding for Department of Energy (DOE) implementation and enforcement of the standards.

Lawmakers cite several reasons for the repeal efforts, including consumer concerns about lack of access to affordable incandescent light bulbs, and reports that companies have shut down incandescent bulb factories because they could not afford to retool to make more efficient products. While DOE predicts that energy-efficient alternatives such as compact fluorescent bulbs (CFLs) and light-emitting diodes (LEDs) will gain a larger U.S. market share after the Energy Independence Act is implemented, it also forecasts that incandescent bulbs will be widely available, and widely used, for years to come. U.S. and foreign manufacturers have developed higher-efficiency halogen incandescent bulbs, available at retailers, that meet the law’s minimum standards for 25%-30% electricity savings (compared to 75%-80% savings from CFLs and LEDs) and are competitive in price.

The Obama Administration and major lighting companies oppose efforts to repeal the 2007 law, noting that the industry has invested billions of dollars to prepare for the new standards and develop next-generation lighting. The new light bulb standards are taking effect at a time when the lighting industry, due to advances in LED products that often exceed EISA 2007 standards, is undergoing the most sweeping technological changes in decades. The LED industry is producing not just more efficient bulbs, but integrated fixtures that can be specially programmed to emit differing colors and types of light and have other potential applications.

DOE has been funding special research projects to bolster the LED industry, which is already the fastest-growing part of the global lighting market. Some analysts project that LEDs will make up at least half the global lighting market by 2020, driven by technical breakthroughs and enhanced demand from energy-efficiency laws in the United States and other nations. Some lighting executives argue that repealing EISA 2007 could undercut LED manufacturing efforts, where U.S. companies have a technological edge. The vast majority of the incandescent and CFL light bulbs Americans now use are imported from China and Mexico. China and other countries are investing heavily in LED production.


Date of Report: September 27, 2011
Number of Pages: 21
Order Number: R42028
Price: $29.95

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