Residential Game Over
Socket saturation for residential lighting is guaranteed. The DOE already has a 45 lpW requirement currently in effect for General Service Lamps (GSL), which has effectively banned most halogen. DOE also has finalized standards that will increase GSL efficacies up to roughly 120 lpW (varies slightly based on lumen output), over the next few years. Only LED will meet these coming efficacy levels.
All utility lighting rebates for residential lighting ended in 2023. ENERGY STAR released its sunsetting schedule for the Lamps and Luminaires programs, to shut down next year. Game over for residential lighting.
Commercial LED Saturation Likely In 3-4 Years
On the commercial lighting side, LED adoption has been fast, but there are always laggards that won’t change to LED until forced to. California has already ended commercial lighting rebates due to very high LED adoption rates, and Massachusetts has announced plans to similarly end commercial lighting rebates. Networked Lighting Controls (NLC) rebates will continue in CA & MA, however. Other progressive states with strong rebate programs will likely be the next to follow CA & MA, in ending commercial lighting rebates. More on LED linear market share hitting ~90% in four Northeast states can be found here.
Linear LED manufacturers of TLEDs, linear retrofit kits, troffers, panels, and linear highbays have shared with me that business is currently booming due to the 10 states that have passed mercury lamp bans. These bans will phase out fluorescent lamps over the next three years, in those states. The list of 10 states, ban details, and effective dates can be found here.
The LED retrofit industry will likely do well through the implementation of mercury lamp bans, but the retrofit industry is likely to contract after the fluorescent lamp bans take effect, generally by 2028. As a result, the lighting retrofit industry is already aggressively diversifying into germicidal lighting, horticultural lighting, EV chargers, other electrification products, lighting controls / NLC, renewable energy like solar, battery energy storage systems (BESS), and microgrids. Highly specialized lighting as well as controls can continue to grow.
Government regulators (i.e. DOE, Congress, CA Energy Commission, and state legislatures) will see the end of incentives and the stubbornness of laggards as reasons to ban mercury lamps, both fluorescent and HID. Right now, only Canada has passed an HID ban in North America, which becomes effective over the next few years. HID bans may become an increasingly attractive idea to state and federal regulators in the US. A mercury ban on fluorescent and HID keeps states out of trouble from violating federal preemption (avoiding DOE lawsuits for encroachment on federal lighting efficiency standards).
The gradual ending of commercial lighting rebates will slow retrofits of the laggards, however, fluorescent and potential HID lamp bans (like Canada’s) will rapidly accelerate retrofitting of laggards to LED. It looks increasingly likely that the US could join Canada in a federal mercury lamp ban of both fluorescent and HID. After all, the United States was the first country to join and sign the Minamata Convention on Mercury. This international treaty has 147 countries agreeing to phase out fluorescent lighting globally, by 2027. It seems likely that there will be near global LED socket saturation by 2028. This is a double-edged sword for the lighting retrofit industry, as that sector will likely contract AFTER the US and Canada ban fluorescent and HID lighting.
The overall global LED lighting market is still expected to grow, with many market research reports projecting CAGRs of 5.8 to 11%, through 2030, which is a healthy growth rate. Commodity retrofit products like TLEDs, linear retrofit kits, corn cob lamps, troffers, and panels are likely to experience the greatest market contraction AFTER the effective dates of US (potential) and Canadian (finalized) fluorescent and HID lamp bans. As a result, many retrofit lamp suppliers are the ones most aggressively diversifying into EV chargers, renewables, NLCs, luminaires, germicidal lighting, horticultural lighting, solar, batteries, etc. These include companies such as LEDVANCE, Light Efficient Design, Espen Technology, Keystone, Fulham, and Signify.
Do you see other likely impacts of LED saturation over the next 3-4 years? Drop me a note with your thoughts at david@lightingsold.com .
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