V. Sealing the Deal: Federal Standards
In January 2012, a federal standard became effective that requires all light bulbs sold in the United States to be 28 percent more efficient than a normal incandescent light bulb, and to continue to improve over time. Although CFLs are far from the only high-efficiency lighting option, their reliability, availability, and cost-effectiveness helped make this standard a political reality. The ULP and other incentive programs helped consumers recognize they could save money, energy, and the environment merely by purchasing a different kind of lightbulb and the lighting industry profited from the change in buying habits.
Nonetheless, partisan opposition to government regulation prompted the most recent Congress to prevent DOE from actually enforcing the standard. Nonetheless, the energy-efficient bulbs required by the Energy Independence and Security Act of 2007 (EISA 2007) are expected to save the average American household $100 to more than $200 a year when fully implemented in 2020 while eliminating the need for 30 new power plants and preventing the equivalent of the carbon dioxide air pollution caused by 17 million cars.
In survey after survey, consumers and consumer groups declared they desired more-efficient bulbs that didn’t waste 90 percent of their energy. The lighting industry also wholeheartedly supports the new standards and has invested millions of dollars retrofitting and expanding U.S. plants, and hiring new workers to meet the standards. The major lighting trade group, NEMA (National Electric Manufacturers Association), reports more than 2,000 new jobs were created in American factories as a result of the new standards.
Despite some confusion in the public perpetrated by the forces seeking to totally overturn the standards at the last minute, EISA does not require that CFLs be used – but that all lightbulbs be more efficient. Consumers can continue to use any type of bulb they like – incandescent, compact fluorescent, halogen, or LED – and the bulbs will give off the same amount of light as before but use less energy. As a result of the standard, for example, the lighting industry has developed energy-saving halogen incandescent bulbs that are about 25 percent more efficient and can last up to three times longer than traditional incandescent bulbs.
However, for those people who are interested in saving money, CFLs offer the biggest bang for the buck because a typical CFL bulb will save a consumer $30 to $50 over its six-year lifetime, and often is purchased in a multipack for less than $2 a bulb.
The good news is that CFLs and all forms of lightbulbs will continue to become more efficient because the law requires new bulbs to use 65 percent less energy by 2020. The lighting industry is voluntarily moving in that direction and there will be efforts to get Congress to reverse the enforcement restriction.
Projections are that in the next 30 years, the standard will lead to savings of 14 quads of energy – or the total energy consumption of 75 million homes for one year; between $25 and $60 billion in lower energy costs; preventing 222 million metric tons of carbon dioxide, or the annual emissions of 57 coal-fired plants; and annual savings of over 55,000 metric tons of mercury beginning in 2020.19
The ULP and other market transformation efforts also provide an important lesson for future programs, particularly for federal efficiency standards. In particular, Energy Secretary Stephen Chu recently indicated he would soon release the results of a project he undertook with a small group of physicists that could help change the common view that if the government mandates energy efficiency standards for an appliance, there may be a small bump-up in the purchase price even though it will be countered by energy bill savings later. Chu told a reporter his group’s review of historical data indicates there is no price bump, a conclusion also reached by Natural Resources Defense Council Energy Program co-director David Goldstein.20
Instead, they noted, the price drops as manufacturers get better at making a more efficient product under required government standards. The result, says Chu, is higher performance at lower cost, resulting in even greater savings.21 Chu’s review could lead to the federal government more aggressively pushing well-designed efficiency standards in order to motivate manufacturers to find ways to increase energy efficiency more quickly.
VI. Lighting the Way to the Future
It is a busy time for the lighting industry. Technologies are evolving and improving rapidly, enabled by advances in electronics and materials, and driven by efficiency incentives and standards.
In particular, lamps using light-emitting diode (LED) technology are aggressively shouldering their way onto the shelves of retailers. LEDs offer marginally higher efficiencies than CFLs but significantly longer lifetimes. They now come in white, as well as a variety of colors, and some even offer features like integrated daylight and motion sensors. While LED lighting is higher-priced than its conventional counterparts, the cost is expected to decline rapidly with increased sales and production volumes, just as it did for CFLs.
According to a recent DOE report, LED lighting is expected to represent 36 percent of general illumination lumen-hour sales by 2020 and a whopping 74 percent by 2030. At that rate, LED lighting would save approximately 2,700 terawatt-hours – worth about $250 billion at today’s energy prices – and reduce greenhouse gas emissions by 1,800 million metric tons between 2010 and 2030.22
Since 2003, the Department of Energy has worked with industry partners to research and develop solid-state lighting (SSL) that includes both LED and also organic light-emitting (OLED) technologies, although R&D progress has been slower than expected in the latter area. DOE established an unbiased product performance testing program called CALiPER (Commercially Available LED Product Evaluation and Reporting) that has become a worldwide standard. The program purchases LED lights without the knowledge of manufacturers, tests them and then posts the results on DOE’s Solid State Lighting Web site, a process that has become strong motivation for manufacturers to continue to improve their product.
In addition, DOE in 2008 launched a Bright Tomorrow Lighting Prize (L Prize) competition to spur innovations in LED lighting. Last year, Philips Lighting North America became the first winner in the 60-watt replacement bulb category, earning a $10 million prize for developing an LED bulb that uses just one-sixth of the electricity of a standard incandescent, which will save consumers $145 at the national average electricity rate over the bulb’s lifetime. A growing number of utilities and environmental organizations, including NRDC, have signed on as L Prize partners to support the L Prize effort and promote the winning products.
Meantime, utility programs are moving on to the next phase of efficient illumination, cognizant that lighting still comprises a large fraction of electricity use. In California, the ‘‘Advanced Lighting’’ program is identifying promising energy-efficiency lighting technologies beyond the standard CFL and working to accelerate their development and market adoption. The state’s investor-owned utilities have directed over $82 million toward this initiative, more than half of the nearly $160 million committed to their lighting efficiency programs. In total, the Advanced Lighting program is expected to produce energy savings of over 500 GWh and peak demand reductions of over 60 MW,23 saving consumers nearly half of the cost of the increased electricity generation that would have otherwise been required between 2010 and 2012. The Upstream Lighting Program demonstrated once again that concerted, focused efficiency efforts can transform markets and save money just as the ‘‘Golden Carrot’’ refrigerator program did before it and the government’s Solid State Lighting Program is doing now. This continuous cycle of collaborative innovation, adoption and standardization has become the hallmark of state and federal energy efficiency policy.
The decades-long campaign to bring the CFL into homes and businesses serves as an important illustration that government, industry, and environmental and consumer groups can work together to protect the environment and help consumers save money. The door is wide open now to future program efforts that extend beyond illumination and refrigeration, with possibilities ranging from homes and vehicles to an expansive array of appliances and electronics.
19. Appliance Standards Awareness Project, Impending EISA Lighting Standards: Impacts on Consumers and Energy Efficiency Lighting Programs, NARUC presentation, Nov. 14, 2010.
20. David B. Goldstein, Saving Energy, Growing Jobs: How Environmental Protection Promotes Economic Growth, Profitability, Innovation, and Competition, 2007, and Invisible Energy: Strategies to Rescue the Economy and Save the Planet, 2010, both Bay Tree Publishing.
21. For Energy Efficiency, Chu’s Law is on The Way, GREENWIRE, June 14, 2012.
22. Navigant Consulting, Inc., Energy Savings Potential of Solid-State Lighting in General Illumination Applications, prepared for U.S. Dept. of Energy, Jan. 2012.
23. Based on an NRDC analysis of approved utility program applications.
A Brighter Idea: The Untold Story of the CFL was originally featured in the October 2012 issue of Electricity Journal.