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Low LED prices affect manufacturers, designers & end users

Low LED prices affect manufacturers, designers & end users

By BizLED Bureau

Nov 17, 2016: The price factor is still dominating the LED lighting industry, and price of LED lighting products is still the main selling point. Consequently, LED manufacturers are competing with each other to come out with the cheapest LED lighting products.

In order to introduce LED lighting products into the mainstream lighting applications, it was necessary to cut prices to enable adoption, which automatically gave rise to the need for volumepush. Hence, the industry entered into a vicious price erosion cycle, challenging both Chinese and western manufacturers.

Price has reached rock bottom

Experts believe that the price of LED lighting products has hit the rock bottom stage, and there cannot be any more price cut than the current LED prices. However, prices of some LED lighting products are higher compared to the normal ones due to attractive designs and advanced features. Such bulbs are often priced around US$ 2.50, which is US$ 0.5 higher as compared to the regular ones. In this case, quality design does pay off.

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Design costs

So, does this mean that a well-designed LED should be priced ten times more? This surely brings us to the complex area of lighting design.There is no such thing as free design. Design or design support is included in the price of the LED products. Even if you utilize a manufacturer’s free lighting design or use the services of an independent lighting design tradition, a big proportion of the margin manufacturers attach to the cost of the product covers the price of supporting a lighting project right from concept to the finished product.

Controls schemes can improve payback

In order to understand the price of lighting, and to establish the lighting levels, lighting designers need to look at the controls scheme to improve payback, which needs to be wrapped up into a monetary model. This will help the customer to validate the investment and short payback.

If an office can be lighted with LED panels at cheaper price rates, then nobody can expect good performance of the lights in areas like glare, flicker, lighting control, and most importantly,improving the lighted areas for those who will work under the lights for a long period of time.

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Low price not good for manufacturers

Low LED prices mean that manufacturers cannot invest in new designs and expand the supply chain. On the other hand, low prices is also not good for independent designers as they cannot get the required support to innovate or deliver the best. Further, users may end up buying LED lights without any design inputs.

What can be done?

It is important to create an environment where demand for good LED lighting will be on the rise. LED products should not be judged by price, rather the design and performance aspects should also be considered as they play vital roles in the performance of the lights, and their lifespan. Good lighting will enhance a retail environment, a work place or a home. Such environment can only be achieved when manufacturers start selling the value of light to users.

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