This part of the lighting section presents background information on the lamps only. The other components are specific for applications in the different sectors as appropriate. However, it should be stressed that good lighting requires a holistic approach rather than putting together some efficient components. The first step for new buildings should be to reduce the need of artificial lighting through design and construction that maximizes the use of daylight.
A strategic policy package would be needed to tackle the barriers and foster market transformation. Some policy instruments, which have been implemented in different countries, will also be discussed here. In most cases there is more than one obstacle that will hinder the development and rapid market penetration of efficient lighting products. This is the reason why it is necessary to implement a combination of instruments to accelerate the transformation to efficient lighting technologies.
Policy elements
International co-operation
Programmes to change the predominant lighting technology to a more efficient one will be more powerful and cost-effective, if they would be implemented on a multinational level. But as long as there is no implementation possible, programmes on lower levels are necessary.
The potential for cost and energy savings in the lighting sector is high since there are a lot of technologies that are more cost-effective than producing additional electricity in a power plant. For example, the life cycle costs associated with exchanging incandescent lamps for CFLs are negative, since the avoided cost of electricity is many times greater than the cost of a new CFL. This is also true for upgrades from incandescent lamps through LEDs, exchanging tungsten halogen lamps for coated tungsten halogen lamps, tungsten halogen lamps for LED, replacing T12 lamps through T8 and T8 through T5 lamps. It is important to identify the best way and instrument to change the existing lighting technologies through the more efficient lighting technologies.
In previous times of regulated energy markets many DSM programmes existed to change lamps and make lighting more effective. Those programmes were quite successful but had relatively high transaction costs. Other projects like the Poland Efficient Lighting Program or the Golden Carrot Program in USA suggest, that if a project directly influences the production of the lighting technologies, the transaction costs will be lower. On the other hand, it makes a difference if a program is executed on a utility level, State level or a national or international level.
The EU's Minimum Efficiency Standard (phase out of incandescent lamps and other ineffective lighting devices) may be seen as an effective regional program with little transactions costs and with a high potential of cost savings. Phadke et al. (2009) showed the advantage of coordinated measures for the refrigerator market. If there is no political agreement possible on national or regional basis it makes sense to pursue efficiency programmes at a local level even if transaction costs are higher.
Energy Audits
Energy audits from independent side usually are
strong arguments to invest into efficient lighting, as far as the
investment is cost-effective. In general the building owners are not
willing to pay the full cost for an energy audit because they don’t know
if the result will be worthwhile for them. Energy audits should be
subsidised by the state government or a related organisation.
Building up a Quality Testing Institute and ProgrammeThe customer's choice on lamps in a shop is quite difficult. They do not know which product to choose and usually has no reliable information about the quality of the (efficient) lamp. So in many cases it is natural to choose the cheaper compact fluorescent lamp, which might be the wrong choice because of low quality and reduced efficiency. That’s why it is very important to provide information about the qual-ity of products. Very important for the success of a rebate or a phase-out program is the quality of the CFLs. Although the use of low-quality CFLs has in the past tainted the image of CFLs modern CFLs perform better and are more efficient. However, there is a need to eliminate low quality products from the market (Limaye, Sarkar, & Singh, 2009: 9).
Therefore the implementation of Demand Side Management (DSM) programmes and also for phase out strategies for incandescent lamps requires a very high product quality which can be reached through a specification which requires defined a product quality. Specifications also with regional characters have been developed for technical requirements for CFLs. The most commonly available are as follows:
• U.K. Energy Saving Trust: (http://www.esmap.org/esmap/sites/esmap.org/files/45.%20EST_Lamp_Specification%28version_6%29.pdf)
• EU CFL Quality Charter: (http://iet.jrc.ec.europa.eu/energyefficiency/residential-lighting/european-cfl-quality-charter)
• ELI (Efficient Lighting Initiative): (http://www.efficientlighting.net/doc/20060913.pdf)
• U.S. Energy Star standard: (http://www.energystar.gov/ia/partners/product_specs/program_reqs/cfls_prog_req.pdf).
The experience of the development of the Danish CFL market can be helpful for other countries. Initially between 1988 and 1994 Danish utility programs focused on mass procurement and financial incentives and later in 1994 shifted focus towards quality, testing and labelling (Martinot and Borg, 1998). This experience seems to be quite important for the development of the LED market today, because it reflects similar conditions compared to the development of the CFL market 20 years ago:
So it might be reasonable to invest into testing laboratories (for example one in Europe, one for the Asian market and one for the American market) to get viable information about the quality of LED lamps and to publish the information through Internet, journals and online information systems at the selling points. In February 2011 the European Commission has started to implement a European LED Quality Charter with the aim to accelerate the manufacturing and marketing of high quality LED lamps in EU, raising consumer awareness, supporting procurement and thus increase the sales and penetration of LEDs (European Commission JRC, 2011).
Phase-out of incandescent lamps and low efficient halogen lamps
The most cost-effective way to achieve a shift towards more efficient lamps especially in households is to ban incandescent lamps from the market by law. For example, with the EU's directive 244/2009 and 245/2009 for the 27 Membership states of the EU the phase out of inefficient lamps have been decided. With these directives the least efficient lamps will step-by-step phased out of the market. The resistance and behaviour of part of the people after the phase-out-decision has shown that a good information campaign and convincing arguments for this step are necessary and helpful. Another aspect of importance is most fluorescence lamps contain small quantities of mercury. Defect and exchanged lamps have to be collected and recycled with help of special machines which will extract the gas out of CFLs or the fluorescence tubes. Similar to the phase out of incandescent lamps, which is a very cost-effective measure, also the phase out of low efficient tungsten halogen lamps and the substitution through IRC lamps or LED-lamps is a powerful policy instrument.
Phase out of T12 technology
In countries with a 220 Volt electricity system, T12 fluorescent lamps easily can be exchanged through T8 lamps, which perform better and use about 10 % to 15 % less electricity. Phase-out could be implemented by regulation. In countries using lower voltages, such as the United States, Mexico, Brazil, Japan the phase out of T12 lamps is more difficult as the fixture or the whole luminaire has to be replaced. This raises the costs of a replacement and makes it more difficult to phase out the less efficient technology. Financial incentive programmes may be needed.
Minimum Energy Performance Standard (MEPS)
Minimum energy performance standards (MEPS) are very frequently used instruments to keep low efficiency lighting-components out of the market and to raise the efficiency of specific lighting components (e.g. compact fluorescent lamps, ballasts, control systems). MEPS are a successful instrument that can be used to raise the efficiency of specific lighting components like lamps, ballasts, luminaires or special lighting devices like exit signs, street lights or traffic signals.
Additionally, standards are not "efficient" by definition. For each minimum energy performance standard it has to be proven that it is connected with net benefits and that the MEPS has a positive impact on the country or region. The net benefit of a program takes into account the costs and benefits related to:
Though MEPS can be very effective it should be stressed they have limitations. It is a strong instrument to phase out the least efficient components, although care must be taken that they also consider the efficiency potential between different lamp types. For example, there might be a 10% efficacy gain from applying MEPS that replace the least efficient incandescent lamps with efficient incandescent lamps, but switching from an incandescent lamp to CFL could improve the efficacy by 400% (IEA, 2006: 299). The EU Directive to phase out inefficient lamps was one of the first MEPS to phase out the least efficient lighting products, irrespective of their technology. However, it should be noted that component based MEPS measures may raise the average efficiency of individual components but they do not provide any guarantee of efficient performance of the overall lighting system. For instance, highly efficient lamps in a bad luminaire will still end up with a poor efficiency. Similarly dark walls and surfaces of rooms will still need lighting systems with high wattage, even if efficient lamps and ballasts are used. For efficient lighting devices like CFLs or high efficient ballast the net benefit of MEPS has been already been demonstrated in many occasions, which is why the phase out of incandescent lamps has been executed or is planned in many countries around the world.
Building Codes
For new buildings, the energy performance of lighting systems can be raised through building codes. These will typically specify maximum permissible lighting power density levels, such as installed lighting power requirement per unit area (W/m2). Another approach is to limit the lighting power density per hundred lux of illuminance (as used in the United Kingdom and France). The most advanced building codes include requirements of incentives to deploy lighting controls such as adequate switching, dimming, occupancy and motion sensors and automatic daylight responsive dimming (IEA, 2006: 301). Building codes along with system level MEPS can indirectly address nearly all aspects of a lighting system’s performance. However, building codes and MEPS only prevent bad solutions from being implemented. These instruments cannot guarantee the optimisation of the lighting systems of buildings or to reach a best practice level.
Energy Labelling
A precondition for many other policy instruments is market transparency. This concerns both the lighting system level, so that building energy performance certificates for commercial and public buildings should include a specific value on the power consumption for lighting (in W/m2 or kWh/m2/year), and the component level. For lamps, ballasts, luminaires and possibly other components, there should be a classification label that divides the products into energy efficiency classes. An example is the European Union's labelling for lamps and ballasts.
Besides the MEPS and the classification labelling scheme, endorsement labelling systems can also be explored. For example, the UK's CFL-performance certification scheme is operated by the Energy Savings Trust (EST), which provides a list of recommended CFLs which met a certain performance standard for efficacy, CRI, power factor and warm-up time. These products carry the “energy saving recommended” logo. Lamps, which are sold in EU-shops, have to bear the EU energy label. The energy label shows the efficacy class. It also documents the luminous flux (600 lm), the Wattage (11 Watt) and the lifetime (12,000 hours). The efficacy of the lamp can be calculated in dividing the luminous flux through the Wattage. In this case is 600 lumen/11 Watt= 55 lumen/Watt.
Information about life-cycle costs of efficient lighting
As life-cycle costs of nearly all-efficient lamps are lower compared to inefficient lamps, the information about life-cycle costs is important to convince buyers. This kind of information should be available in every shop and place, where lamps can be bought. Today and in the future at least in the industrial countries, internet web-sites like www.topten.ch or www.eco-topten.de will be a very important and influencing information systems for customers who want to be informed about life-cycle costs and quality of efficient lamps.
Information for investors
Investors should know what is possible in efficient lighting (and other technologies) today. They should be informed that the upfront-cost, which might be higher in some cases, will be paid back through lower energy and maintenance costs and higher rents. Energy labels play a role here, but they have to be communicated in an efficient manner. Information campaigns are only the start of an effective information policy. (Subsidised) Energy audits and energy advice, including assistance through a whole building project, are much more effective.
Demonstration projects
Best practice demonstration projects are an essential measure to showcase to private investors, architects, planners, electricians and public administrations on what can be done for and achieved with efficient lighting and to raise the awareness on this subject. It might be useful to install such demonstration projects in all regions. The impact of the projects can be improved through a good documentation of the projects in the Internet as well as through use of the documentation in information campaigns and in professional training. The demonstration project at the Universidad Nacional Autónoma de Mexico (UNAM) is a good example.
Campaigns and rebate programmes from governments, energy companies, ESCOs, and others
Regulatory measures are effective to cut off inefficient technologies. But their main weakness is that they can give no incentive to install the most efficient technologies or to improve the existing technologies and solutions. For this reason, fiscal and financial incentives and financing instruments for best practice solutions (for example, direct rebates or subsidies, tax rebates, soft loans) have to be provided where there are large savings to be made but not implemented by market forces alone. There are many different program design approaches possible and helpful for substituting incandescent lamps through CFLs. The most advanced approach is the phase-out of incandescent lamps as we describe in section "good practice". In countries where phase-out-programs will not be possible, the below described measures will be helpful. In the table below, the Program Design Approaches are described and assessed (Limaye, Sarkar and Singh, 2009: 3)
| Design Approach | Advantages | Limitations |
|---|---|---|
| Bulk purchase and distribution | Bulk procurement lowers upfront CFL cost without subsidy. Distribution can achieve high penetration. Technical quality assured through tender specifications. Relatively quick to implement. | Interferes with existing market channels. Raises concerns about market sustainability. Requires strong institutional and management systems. |
| Market-based approaches | Enhances existing market channels. Provides more options to customers. Lower implementation costs. | May not substantially reduce upfront CFL costs. Requires mature market with existing high quality CFL suppliers and retailers. Slower implementation rate. |
| Coupons | More market-based approach with use of existing distribution channels to help ensure sustainability. Allow customers to choose products. | Need measures to protect against low quality products and fake coupons. Harder to ensure lower retail prices. Customers need good access to information to make informed choices. |
| Branding | Allows customer to select outlets and products with simple branding. Some manufacturer negotiation can bring down upfront cost barrier. Allows manufactures to target marketing efforts. | May not be sustainable. Allocation of subsidies must be equitable. High potential for free riders. |
As the ESMAP report states, the economic benefits of CFL programs are extremely high: “…a typical 1 million CFL program costing US$2 million can provide load reductions of 38.9 MW, representing utility cost savings of more than US$69 million over the life of the CFL. The program also provides reductions in GHG emissions of over 300,000 tons of CO2 equivalent” (Limaye, Sarkar and Singh, 2009).
Energy Performance Contracting
Energy Performance Contracting or Third Party Financing (TPF) is an alternative financing mechanism, which can be very useful for financing sustainable energy projects. If this financing mechanism is used for energy saving projects it is also called Energy Saving Contracting or Energy Performance Contracting. This financing mechanism enables administrations or owners of buildings to accomplish energy saving projects without up-front capital costs. A lighting performance contractor is interested to invest in efficient lighting. The achieved energy savings will repay the investment. This instrument is usually used for the refurbishment of buildings or lighting systems and not for enhanced lighting systems in new buildings.
The above figure shows the principal construction of performance contracting. The contractor provided the services of planning, financing and the implementation of electricity or energy saving measures. The contractor got refinanced from the electricity-savings and the avoided costs to the building owner, which have been achieved through the investment of the contractor. After the contract period the owner of the building will profit from the cost-savings of the efficient lighting system. For existing buildings, light contracting can be an efficient instrument to improve the lighting system and save electricity. The advantage of this instrument is, that the building owner don’t have to invest but nevertheless can profit from the investment into efficient lighting, which is done by the contractor. As the savings incurred in electricity and maintenance costs payback the investor is interested to install the most efficient and cost-effective technologies.
Continuing professional education (CPD programmes)
Dissemination of information and continuing education for sales persons, electricians, architects and building contracts is very crucial to bring policy legislatures in to field. As the substitution of inefficient lamps to more efficient lamps gets more complicated because of a higher choice between products, the sales person should be better educated in the field of efficient lighting. Electricians like to work with the product they have experience with. But these products are usually not the most efficient. New developments and more efficient products have to be introduced by chambers and demonstration projects in a systematic way.
The planning of efficient lighting systems needs more information and better education because of a higher choice between lighting and control systems and products. Architects, planners and electricians should be better educated in the field of efficient lighting. Optimising the use of natural daylight should be one of the important aspects by planning new houses through architects and for decision makers.
Incentives for Innovation
In summer 2009 the U.S. Department of Energy (DOE) launched the "Bright Tomorrow Lighting Competition" (L-Prize). The L-Prize Competition is intended to encourage the development and deployment of highly energy efficient solid-state lighting (SSL or LED) products to replace several of the most common lighting products currently used in the United States, including 60-watt incandescent and PAR 38 halogen lamps. The LED products must perform similarly to the lamps they are intended to replace in terms of colour appearance, light output, light distribution, and lamp shape, size, form factor, appearance and operating environment. They must be reliable, available through normal market channels, and competitively priced. In August 2011 DOE announced that Philips Lighting North America has won the first award under the Department's Bright Tomorrow Lighting Prize (L Prize) competition. The results of the performance of the winner product can be seen below. Full performance specification criteria and competition details can be found at http://www.lightingprize.org.
| Specification | L Prize Requirement | Philips Result (average for 200 units)* |
|---|---|---|
| Luminous flux (lumens, lm) | > 900 lm | 910 lm |
| Wattage (W) | ≤ 10 W | 9.7 W |
| Efficacy (lm/W) | > 90 lm/W | 93.4 lm/W |
| Correlated color temperature (CCT) | 2700-3000 K | 2727 K |
| Color rendering index (CRI) | > 90 | 93 |
The product also performed exceedingly well through a series of stress tests, in which the product was subjected to extreme conditions such as high and low temperatures, humidity, vibration, high and low voltage, etc.
The analysis of the actor constellation is an important base to choose the appropriate instruments for a successful policy package.
Residential sector
The different actors, which are involved into the market process for residential lighting, are:
These actors have different interests that often result in a "second best" solution for the lighting system, for the climate, the environment as well as for the household expenditure. In the following table, we will look at the market situation for CFLs. In the table the incentives and barriers to efficient lighting are described for each of the actors mentioned above.
| Actors | Incentives | Barriers |
|---|---|---|
| Buyer/user (household) | The household has an economic interest to buy a good, energy efficient product with a long life | Households have to pay higher upfront costs |
| “ | “ | Households do not know if the more expensive product is also the better product |
| “ | “ | Lack of information about efficient lighting and technical options |
| “ | “ | Little awareness about efficient lighting and electricity saving |
| “ | “ | Bad experience with new technology in fact of low quality products |
| Seller/retail company | High selling price, low buying price maximise profit of seller | If customers do not accept higher prices for high quality products, the selling company would concentrate on cheap products |
| “ | Seller can advertise with good advice and foster a green image (reputational benefit) | Sales personal is expensive and has to be educated (which makes it even more expensive to sell efficient lighting products) |
| “ | Seller would prefer to use advertising and display shelves to promote products that are supported by manufacturers or wholesale companies Offering energy-efficient lighting can help to build up a unique selling position and market leadership | - |
| Wholesale companies | Can advertise with efficiency - which is connected to modern and up to date. | The price of efficient products seems to be high if only the investment and not the life-cycle costs are regarded |
| “ | Offering high efficient products can help to build up a good market position | Risk with new product without experience |
| Internet shops | As for shop-based retailers | Users of internet are highly price sensible. Products with higher investment costs may meet a lower demand |
| Manufacturers | High efficient and high quality products will be a possibility to have a market advantage before mass manufacturers | Risk, if the user will be buying the more efficient products even if the life-cycle costs of the product are lower |
Commercial sector
The different actors, which are involved into the market process, include:
These actors have different interests that often result in second best lighting solutions in terms of the climate, the environment as well as for the energy and maintenance costs of the user of the building. In the following table, we will look at the market situation for efficient lighting systems in public and commercial buildings. For each actor mentioned above their incentives and barriers to efficient lighting are described in the table.
| Actors | Incentives | Barriers |
|---|---|---|
| Building investor | Interested in low investment costs. | Usually is not the user and is not interested in low electricity consumption. |
| “ | Owner can advertise with low electricity consumption and green image. | Is not an expert in efficient lighting technology. |
| “ | - | Lack of information about efficient lighting and technical options. |
| User of building | Has to pay for electricity consumption. Would like to reduce the electricity costs for lighting and other technologies. | Does not know how long he/she will stay in the building. They will only invest in measures with a very short pay-back time (if the owner accepts it). |
| Architects, designers | Good example of efficient lighting could be a showcase for future projects. | The economic result for the architect depends on the total cost of project. The higher the investment costs, the higher is the income. |
| “ | - | Better planning needs more time and raises planning costs. |
| “ | - | Other details pertaining to the quality of lighting and ambience required may be of higher importance than efficient lighting. |
| “ | - | To be sure to fulfil the efficiency directives, the architects or lighting planner will prefer to be on the secure side of planning. |
| “ | - | Power of habit and good experience with certain technologies and suppliers. |
| “ | - | Building/rooms might be used for different proposes. In consequence lighting technologies employed may not be optimised. |
| “ | - | Increased revenue and less work required if standard lighting technology is used (and not an optimized solution). |
| Municipality, government | Could be part of climate policy; show-case that municipality is working cost-effective with the money of the tax-payers. | No direct incentive to reduce life-cycle costs. Efficient lighting concepts need more work. The City/government employees do not get more money, if they are more engaged. |
| “ | - | Low budget, need to reduce investment costs |
| Installation contractor | Good and efficient solution can be the base for further contracts. | Prefer to install the technologies they have previous experience with. |
| “ | - | Prefer to sell products with highest income incentive. |
| “ | - | Lack of knowledge. |
| Energy Service Company | Higher profit through better solutions. | Short contract periods will reduce investment into solutions with higher efficiency but longer pay-back time. |
| Producer of lighting technology | Higher market share, if investor is interested into efficient lighting. | Risk of failure: will the actors recognize the saving opportunities? Will they accept a product with a higher price but higher efficiency? |
| “ | - | Cannibalization of own product possible. |
As shown above many actors and service providers with different interests are involved into the planning and installation process. To obtain the most efficient solution, a professional lighting planner has to be involved. This planer should get a strong incentive to work on the most energy-efficient solution at lowest costs.
New building
The builders or developers of buildings (for example, office buildings) are usually not the users of the buildings and have no incentive to provide best practice solutions because they do not pay for the electricity costs of the building. Investors typically are looking for low upfront cost of the building (and of the lighting system). Investors might be convinced by information and rebates for high efficient lighting systems to invest in more efficient lighting systems (IEA, 2006: 293). The user of the building is paying for electricity consumption but is not able to do the (profitable) retrofitting of the lighting system. The reasons could be that the user has short-term contracts with the builder owners and therefore would only invest into measures with very short payback time. Further more the user has to seek permission from the owner for making changes to the existing installations.
Existing building
The replacement of lamps in existing lighting systems is usually done one by one. That means, that within the maintenance process the same type of lamp is used, even if there is a more effective (and cost-effective) one readily available. If the maintenance is the responsibility of the owner, there is no incentive to pay for the higher price of the more efficient lamp - while on the other hand the savings would lie by the tenant. The refurbishment of the whole lighting system usually only is done in combination with the refurbishment of the whole building. But in this case efficient lighting technologies usually do not get the attention they should. Split incentives between the owners and the building users should be worked out in such retrofitting projects.
Especially in public buildings there is a high potential for improvement. The background is, that there is no financial incentive (or other incentive) to improve the efficiency of the lighting system. But there are many barriers like lack of financial possibilities, lack of human power and knowledge. A burned out street lamp can bring troubles to the administration of a town, while inefficient lighting systems, which will cause additional cost of millions of dollars, would not be of public interest. There is no control over the efficiency of lighting systems through public. If, on the other hand, the owner is also the user of building, retrofitting the lighting system is readily profitable.
Policy packages
Residential sector
The figure below shows today’s distribution (dark line) of lighting technologies in different efficiency classes (EU-labelling system) (the distribution is only qualitative as there is no real data available).
To use the total potential of efficient lighting in the household sector and to shift the use of E, F and G Class- lamps to higher classes (B and A) a package of instruments beyond the phase-out of incandescent lamps is necessary.
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