The first LED lamps were introduced in the late 1990s. Since then, the unit costs have been steadily declining by double-digit percentages, making LED lighting technology viable for commercial, industrial and outdoor lighting applications. In addition, large strides have been made in improving the efficiency, lumen output and performance of LED lights. The global LED lighting market is estimated to be $16B in 2012 and expected to reach nearly $40B by 2014 (Figure 1). The US market CAGR for commercial and outdoor LED lighting alone is expected to grow 26-30% through 2016.
In the commercial sectors, the business case is not only justified from double digit
energy savings but also large maintenance and labor cost reductions. Utility rebates and government financial incentives for energy efficiency further help reduce the initial cost
of LED lamp and luminaire installations. As most LED lamps are specified to last around 50,000 hours versus 1000 hours for incandescent and 8,000 hours for CFLs, fewer maintenance staff hours are required to replace lamps in large facilities. Further, reduction in CO2 emissions by going to LED alternatives is also a key driving factor near and dear to government environmental agencies. A single 100W incandescent bulb for example, that is on four hours a day produces 139 pounds of carbon per year. Switching to a 12 watt LED lamp which has the equivalent light output of a 75W incandescent will emit only 7.33 lbs. of carbon per year.