There’s no doubt about it. LED lights are now accepted as a way to reduce electricity for all types of buildings. They use much less electricity than historic bulbs and their prices have come down. Bloomberg estimated that nearly 500 million were installed nationwide in 2016. With this recognition, many utilities and government agencies are wondering whether it is time to gradually end incentive programs for LED lights.

But there are some strong arguments to keep incentives to encourage companies and the public to purchase LEDs. Despite their advantages, they have not totally won over the market. According to the National Electrical Manufacturers Association, LED lamps accounted for 36% of national light bulb sales in the 4th quarter of 2017, while halogen lamps still held 48% of market share. LEDs are displacing CFLs.
Also, the 36% market share is not consistent across the US, but is greatest in states or areas that either have strong financial incentives or high electric rates, from as high as 50% of the market in California to about 12% in Kentucky, according to the USEPA.

Some statistics in New York and Massachusetts, whose utilities have begun to reduce incentives, show that conversions to LEDs have also slowed down. Although switching to LEDs is strongly financially beneficial, consumers and companies have an expectation to get a further financial reward from the utility or government.

The belief is that when the new federal DOE standards come into effect on January 1, 2020 making it illegal to sell most halogen and incandescent light bulbs (less efficient than 45 lumens per watt), LED sales will increase. However, such sales may not soar because retailers will still be allowed to sell its non-complying products in the store past the compliance date and enforcement is unknown. The burden is not on the manufacturer or consumer, but on the retailer to stop selling non-compliant lights. How DOE will enforce these measures in many type of retail stores is unknown.

Utilities are realizing that targeted incentive programs may be best to encourage LED sales in the long term. Some utilities are beginning to focus on underserved markets to promote LED lights, such as rural and low-income urban areas. Programs may also be effective if they target the elderly market who have been slower to adopt to LEDs.

Some consumers have shied away from LEDs thinking they are limited in terms of beauty and utility. Focusing incentives to encourage people to buy decorative and reflector lights can improve this market and convert very energy inefficient lamps of these types to more efficient ones.

Finally, comes the transition to more robust incentives for lighting controls, turning lights – even more efficient ones like LEDs – off altogether when a room is not in use. Utilities are beginning to incentivize effective dimming and occupancy controls that are easy to install and operate.

CCES has the experts to help you upgrade your lights to LEDs to maximize the energy cost savings and to improve your employee’s or customer’s productivity and comfort. We know the existing incentive programs and can maximize these to provide you the best performing project economically with the shortest payback and return on investment. Contact us today at 914-584-6720 or at karell@CCESworld.com.