Republication of Postings from the U.S. Department of Energy (DOE) Solid-State Lighting Program

by Jim Brodrick, SSL Program Manager, U.S. Department of Energy

Among solid-state lighting’s many potential advantages, energy efficiency is the one that’s best-known, and it’s the driving reason behind DOE’s multipronged effort to accelerate the technology’s development and market introduction. That’s why DOE has supported studies forecasting the market penetration of LED lighting. These periodic forecasts — the latest entitled Energy Savings Forecast of Solid-State Lighting in General Illumination Applications — provide a comprehensive overview of the expected path of LED lighting adoption within the U.S. and estimate the resulting energy savings out to year 2030, and have been widely used by industry and government, both here and abroad. The latest forecast — the sixth iteration since 2002 — has just been released.

The additional historical data we’ve obtained since the last such report have helped us sharpen our pencils considerably. Leveraging updated data sources and providing a more detailed breakdown of general lighting applications than presented in past forecasts, the new report estimates the expected future adoption of LEDs based on the current trajectory for the technology, which doesn’t necessarily represent its maximum potential in terms of market penetration and energy savings. The analysis compares the annual lighting energy consumption in the U.S. with and without the further market penetration of LED lighting, with the forecasted energy savings represented by the difference in energy consumption between the two scenarios.

LED lighting sales (based on lumen-hours) are anticipated to increase from approximately 3% in 2013 to about 48% in 2020. By 2030, LEDs are projected to dominate lighting sales in each of the submarkets examined, comprising 84% of all sales, which will have a huge impact on energy consumption. DOE estimates that in 2013, lighting was responsible for 17% of the country’s total electricity consumption, using about 6.9 quads (609 TWh) of source energy — roughly equivalent to the total energy consumed by 50 million U.S. homes. LEDs are projected to reduce total US lighting energy consumption by 15% in 2020 and by 40% in 2030, saving 3.0 quads (261 TWhs) in 2030 alone — worth about $26 billion at today’s electricity prices, and nearly equivalent to the total energy consumed by 24 million U.S. homes today. But remember: those projections are based on the current trajectory and could end up being even higher.

Of the eight lighting submarkets examined, LEDs are anticipated to grow most rapidly in street and roadway and general service lighting, in terms of the percentage of total sales. In the street and roadway submarket, which is already a popular area for LED upgrades, LEDs are predicted to reach 83% market share of sales by 2020 and nearly 100% by 2030. The general service submarket will shift to LEDs a bit more slowly, with a projected 55% market share of sales in 2020, but will also consist nearly entirely of LEDs by 2030.

Many projections were used as inputs in the lighting-market model underlying the analysis. While the best available resources were used to come up with each of these projections, there are always elements of uncertainty. An online interactive model that accompanies the report allows users to adjust four key input variables — LED price decline, LED efficacy improvement, increased use of automated controls enabled by LEDs, and renovation rate — to better understand how changes in these variables affect the forecasted LED penetration and energy savings. These four inputs were found to have the most influence on results. Many other inputs with inherent uncertainties, such as the projected price of electricity, were used in the lighting market model, but varying them within a reasonable range doesn’t significantly affect the results.

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One scenario that’s highlighted in the report’s Sensitivity Analysis section examines the impact on energy savings if DOE’s ambitious goals for LED price and efficacy, as set forth in our 2014 SSL R&D Multi-Year Program Plan, are realized by all LED lighting products. If those goals are reached, LED lighting is projected to achieve a market share of 68% of lumen-hour sales in 2020, and over 90% in 2030. This would result in an additional energy savings of 20% in 2030 (compared to the 40% savings predicted by the conservative reference scenario for that year), making for a 60% decrease (130 TWh) in total lighting energy consumption compared to a scenario in which there is no further market penetration of LEDs beyond current levels — while the cumulative energy savings over the no-LED scenario during the analysis period (2013 to 2030) would increase to nearly 44 quads (3900 TWh), equal to over $380 billion in avoided electricity costs. This shows the significant increase in energy savings that could be captured through increased investment in improving SSL technology.

The report shows LED lighting to be one of the country’s best technology options to save energy and reduce our carbon footprint. And it also shows that there’s still quite a bit of headroom for additional energy savings, so it’s far from “game over” yet. The report is available online at http://energy.gov/eere/ssl/led-lighting-forecast.