Why LEDs are transforming the lighting industry
Lighting has been designed, marketed, bid, and installed basically the same way since World War II. Fixtures fall into the same stereotypical classifications: 2×2, 2×4, troffer, downlight, strip, wrap,wallpack, Type 2, Type 5, spot, flood, can, etc. But here’s the real secret: Lighting manufacturers have never actually made “lighting” equipment. They have manufactured electromechanical devices that contain lighting elements and controls sold by others. Every contractor at some time has experienced a lighting product failure and been told by the manufacturer that the warranty claim needs to be handled by either the lamp or ballast manufacturer. That’s because they’ve never built any lighting products before. That was then.
LED lighting represents a transformation of the lighting industry. LEDs are not a replacement light source that is simply integrated into a fixture manufacturers’ product line like every other lamp product — from incandescent to fluorescent to HID. LEDs are a pure electronic system, with nuances that require careful design, differing manufacturing techniques, and, for the first time, a very real warranty liability to the lighting manufacturer.
|Ted Konnerth, PhD, CEO/president with Egret Consulting Group|
So what’s the future of lighting looking like? I’d say it looks very exciting. The following are just a few key areas of impending change.
Design. LEDs have no restraints of form factor, so the concept of containing LEDs into a 2×2, shoebox, overhead can, or wallpack is rendered moot. The legacy manufacturers and many of the new LED entrants are still confining the products into traditional packages, but that’s due to traditional construction processes, use of the same tooling, or limited design creativity. This will change rapidly and will ultimately influence standards organizations like UL, which has regulations of size of openings based upon access to the ballast or J-box.
Channels. For more than 50 years, lighting reps have ruled the roost for commercial lighting. They call on specifiers and influence the product definition for new construction projects, and then rely on the contractors and distributors to negotiate the order. LED-based products are currently optimal for end-user applications where the cost differential can be justified through energy reduction, rebates, utility incentives and tax implications — all of which are geared to the owner/operator of the building.
LED products don’t work as well in today’s new construction market due to the challenges of getting a project financed with a premium paid for upgrading the system to this new technology. It’s catching on, but it’s the last adoption curve for the technology. Few rep firms have redeployed their sales teams to adopt an end-user sales presentation because the selling skills are different. LED-based products must be sold on a return-on-investment (ROI) basis, so an effective salesman needs to understand the financial aspects of cost of ownership. This was never a core discipline of a lighting rep. As a result, the market has exploded with LED manufacturers developing their own direct end-user sales organizations trained to focus on the installed base of 21+ million buildings. Bypassing the lighting rep also means bypassing the distributor and often the contractor as well.
The future. LEDs are a native low-voltage electronic DC product that requires careful handling and “reasonable” ambient temperatures to operate effectively. It will be integrated into much broader electronic systems. The technology is ready now to build a residence with solar power (native DC) connected to LED lighting without the rectifiers, and the same goes for most home systems — video, sound, TV, computers, and even appliances are available in DC. With the exception of HVAC, most houses could be built off-grid economically and electrically safe. The bigger question is: Which trade organization would wire that home? Would it be an electrician, low-voltage cabling specialist, security system installer, or solar power installer?
Lighting has traditionally captured about 15% of the electrical industry’s total annual sales; it is historically the second largest category for an electrical distributor, behind switchgear. As this category gives rise to more electronics-based products, lighting will be seen as the enabler of multiple electronic systems and solutions.
Konnerth, PhD, is CEO/president with Egret Consulting Group in Mundelein, Ill. He can be reached at email@example.com.