Estimates of LEDinside, an industry data source in Taipei, show average selling prices for high-power LED components have plunged 43% in one year. To cite a simple measure, the cost of an LED alternative, now $15 to $25 each, to a 40-watt incandescent bulb could fall to $10 to $15 in coming quarters, according to Roger Chu, research director of green energy at LEDinside. He expects stiff price cuts to continue in coming years.
Dropping prices surely hurt manufacturers’ near-term revenues and margins. But they could also spell great news in the long run to accelerate the pickup of the LED lighting market globally, where pricing is the most important trigger for end consumers to switch. And there’s a way to go: That $10 LED light is still up against a $1 traditional bulb.
At its current efficiency level a good-quality LED bulb consumes 8 watts of electricity to emit 460 lumens—similar to the brightness from a traditional 40-watt incandescent bulb—and is thus five times more power-efficient. Also, it claims a maximum lifetime of 30,000 hours versus 1,000 hours of a traditional bulb, Chu adds.
Many countries will completely ban low-efficiency incandescent lighting before 2015, but the LED light replacement wave will take time to realize as consumers resort to cheaper energy-saving alternatives such as compact fluorescent lamps at $3 for each 40-watt unit.
Overall, LEDinside projects that the global LED lighting market’s annual output (auto lighting excluded) will grow to $36.6 billion in 2015, or a third of relevant illumination, from this year’s $7.6 billion.
