Time to End Dependence on Foreign Metals

Jan 1, 2012 9:00 AM, By Ron Gilcrease, Rogers Electric

Why the United States must reduce its dependence on rare earth metals to keep lamp costs from skyrocketing

It’s a little-known yet alarming fact: The lighting industry and its customers are under attack — and have been for some time. Similar to the 1973 Arab Oil Embargo, strict control and a steady reduction of rare earth metal exports — the vital components for manufacturing energy-efficient fluorescent lamps and the light-producing element of all fluorescent lighting — have led to hyperinflation that has reached as high as 3,500% since January 2010. As a result, lamp costs have seen a 100% to 120% increase over the past 18 months. To put this into perspective, imagine this scenario. A gallon of milk would cost $28.80, if it experienced the same rate of inflation as neodymium (a rare earth metal used to simulate full spectrum light similar to true daylight). Despite this reality, the industry has remained passive in addressing a very obvious issue. I, for one, think it’s time to take action.

First, let’s explore the underlying issue. In the 1990s, China entered the rare earth market and essentially underpriced all other providers and forced them out of business. Today, the Chinese control 97% of the world’s production of rare earth metals. Making matters worse is the fact that they slashed export permits by 72% in the spring of 2010 and another 35% in early 2011, resulting in restricted supply and skyrocketing prices.

There is both good and bad news in this story. The good news is that this crisis has renewed interest in rare earth mining around the world today. The bad news is that building new mines and the separation facilities that extract the rare earth metals requires a huge investment (hundreds of millions of dollars) — and can take seven to 10 years to become fully operational. Given the fact that fluorescent lighting is still the primary lighting source used in the electrical industry, our options seem limited. However, there are things we can do. Our industry should go beyond just recommending energy-efficient extended life lamps to reduce customers’ lighting costs. We need to reduce our dependence on the rare earth metals that make up our lamps in the first place!

Lighting retrofits, which upgrade a lighting system to operate with new technology, are the best possible solution for reducing lighting costs. By design, retrofits increase the energy efficiency and quality of a lighting system while maintaining appropriate lighting levels. A well-planned retrofit can maintain lighting levels and reduce the overall number of lamps within a facility by up to 50%. This not only reduces the number of lamps needed to be purchased and maintained, but also slashes your total lighting budget, because energy accounts for approximately 85% of lighting costs. Additionally, many electric utilities offer incentive programs and provide rebates for lighting retrofits. While this option may require capital expenditures, retrofits are the best long-term approach for reducing lighting costs while also reducing demand for lamps with rare earth metals.

A recent case study clearly highlights how a lighting retrofit can save the most money in the long run. In working with a leading sports retailer, Rogers Electric developed an upgrade solution that cut lamp counts by 50% while still improving lighting and reducing energy costs. Each retail location saved approximately $23,000 a year in energy costs. The lighting retrofit also increased lamp life from 18,000 hours to 40,000 hours, extended relamp times dramatically to 42 months, and established a full warranty on all lamps, eliminating any additional lamp costs over that time. A significant portion of the work performed even qualified for rebates from electric utilities. In summary, the project resulted in better lighting, lower energy costs, zero maintenance costs, and a 50% reduction in lamp counts.

While some of us may have avoided the rare earth metals crisis so far, significant lamp cost increases are imminent. Let’s not allow history to repeat itself. Instead, let’s take a stand to protect our industry and our customers by reducing our dependence on foreign markets. Together, we can take proactive steps to reduce our dependence on rare earth metals and mitigate the inevitable increased lighting costs we face.

Gilcrease is lighting division president for Atlanta-based Rogers Electric. He has more than 40 years of experience in the lighting, electrical, and energy management field.

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