What Does a $25 Light Bulb Get You?

What Does a $25 LED Light Bulb Get You?Get ready to say goodbye to the incandescent light bulb. If all goes according to plan, the phasing out of Thomas Edison's invention will begin next year and continue through 2014. By that time, light bulb makers hope we'll have adopted LED bulbs as our new favorite light source.

That said, manufactures have to overcome a few obstacles before consumers will be ready to make the switch.

Watt's the Big Deal?

Some people may wonder why we can't just stick with incandescent bulbs if reinventing the light bulb is such a challenge. It's a matter of efficiency.

Less than 10% of the energy running through an incandescent gets converted to light -- the rest is lost as heat. If we switch over to more efficient bulbs, we could save billions of dollars, decrease our thirst for oil, and reduce greenhouse gas emissions.

Unfortunately, the first alternatives to hit the market were compact fluorescent lamps, or CFLs. The early CFLs used less energy, but that's about the only good thing you can say about them:

  • Many wouldn't fit in old fixtures.
  • They produced a flicker laden, dim, gray light.
  • They didn't work with dimmer switches.
  • And, to top it all off, they contain mercury, so you can't throw them away in the trash -- at least not with a clear conscience.

The latest generation of CFLs can produce light of the same quality as incandescents, but they haven't solved the other issues. And even if they had fixed everything, I don't think it would have mattered. With the possible exception of people who grew up watching Captain Planet, the public has generally rejected CFLs -- so much so that the Tea Party attempted to have Congress repeal the ban on incandescent bulbs.

The Next Bright Idea

Thanks to the market failure of CFLs, LEDs will have to be so good that they make consumers already inoculated against new lighting technology forget about their previous disappointments. The engineering problems alone make this a difficult task.
White LEDs give off a blue-tinted light, which isn't as pleasant as the warm incandescent light we're used to. And to burn as brightly as standard 60-watt bulbs, LEDs have to remain relatively cool.

Philips' (PHG) AMBIENT LED seems to have solved both of these problems. I picked one up recently and installed it in my living room. The thing doesn't look like a light bulb. Instead of the familiar globe shape -- which CFLs mimic to a certain degree -- the LED bulb is a fluted aluminum tube with orange plastic panels at the top. I honestly doubted it would work, but it produces warm light on par with a 60-watt bulb while only drawing 12.5 watts.

Here's the catch: The bulbs cost $25.

This hefty price tag stands as the biggest obstacle to LED adoption. General Electric (GE) expects the price to drop to $10 in the next three years, but they'll still remain the most expensive option. A four-pack of 60-watt incandescent bulbs costs $1.47, while four CFLs go for $6.47 and a halogen bulb can be had for about $4.

Granted, LED bulbs should last significantly longer -- Philips claims mine will last two decades -- and use less power than the competition, but getting consumers to overlook the higher price still poses a challenge. Philips' strategy is to convince consumers to think of light bulbs as durable goods. Its LED bulbs are packed more like gadgets rather than light bulbs. The packaging for the AMBIENT is shaped like a miniature display case. A picture of a pleasantly lit living room and boxes touting the potential energy savings frame the blister-packed bulb.

How Many Accountants Does It Take to Change a Light Bulb?

In spite of the challenges, the industry remains optimistic about LEDs. Home Depot (HD) believes the bulbs will account for 25% by 2014. In the meantime, commercial sales have begun to gain traction.

Many companies have begun switching to LEDs after realizing the can reduce energy costs over time. According to The Washington Post, GNC (GNC) installed LED lights in 2,000 stores, while Starbucks (SBUX) put them in 8,000 locations. This could help bring more residential customers on board by allowing them to see the quality of LED light without having to open their wallets.

The Motley Fool owns shares of Starbucks. Motley Fool newsletter services have recommended buying shares of The Home Depot and Starbucks. Motley Fool contributor Patrick Martin owns no shares of any of the companies mentioned here. You can follow him on Twitter, where he goes by @TMFpcmart03.





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46 Comments

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Loretta D. Rice

I replaced all of my lights with LED's after testing out a few from Earthled.com They have Energy star approved bulbs and also recently released bulbs for under $15. Also check out the lighting science page. They have the best prices for the best quality product. http://store.earthled.com/collections/lighting-science-definity-led-light-bulbs-sale

October 31 2011 at 10:09 PM Report abuse rate up rate down Reply
Tracy0813

LED bulbs are the best, I've purchased a few and they work great in my home. I purchased my LED bulbs at www.BulbAmerica.com and they are super cheap unlike other websites!

October 27 2011 at 10:18 AM Report abuse +1 rate up rate down Reply
dgre519

TAKE A LOOK AT LSCG, LIGHTING SCIENCE CORP. THEY HAVE THE BEST LED LIGHT BULB AND YOU CAN BUY IT AT HOME DEPOT ON SALE FOR $10. STOCK SELLS FOR ABOUT $2.65. I BOUGHT 5,000 SHARES AND LSCG OWNS ABOUT 90 PATENTS ON THE LED BULB. CHECK OUT THE COMPANY WEBSITE. THERE BULB IS IN THE GNC BUILDINGS AS WELL AS STARBUCKS.

October 27 2011 at 8:16 AM Report abuse rate up rate down Reply
1mike1

who is uncle sam too tell me what light bulbs to use. in my big bldgs i use up to 400 watt. next they will limit you too 4 sheets of tolet paper.

October 26 2011 at 7:03 PM Report abuse +2 rate up rate down Reply
David

I've have a regular 40w IC bulb lasting now 6 years, on 24/7 in a hallway. I've had CFLs last just 3 months. $25 LEDs are insane even if down to $5 for closet bulbs that are on for 5 minutes a day ... govt stay out of my closet and leave my skeletons alone.

October 26 2011 at 2:40 PM Report abuse +3 rate up rate down Reply
David

Selling a house ... "yes the light fixtures will remain, but not the light bulbs."

October 26 2011 at 2:35 PM Report abuse +1 rate up rate down Reply
bill

is is about time for led's for thew home.i have xmas. lights for years.tuch one after it has been on for hours and is cold to the touch.they last almost for ever.can't waite for 100 watt out put to come on the market at a reasonable price.

October 26 2011 at 2:03 PM Report abuse +1 rate up rate down Reply
dknowles60

get the fed gov out of my life. 1 water heater uses the same amount of power as do 45 100 watt light bulbs. i dryer uses the same amount of power as 54 100 watt light bulbs. 1 home ac 30 to 60 100 watt light bulbs a heat strip on a heat pump 100 to 200 100 watt light bulbs. it is not my problem that the fed gov is to dumb to do math.

October 26 2011 at 12:21 PM Report abuse +2 rate up rate down Reply
1 reply to dknowles60's comment
mo524

What does that even mean?

October 26 2011 at 2:35 PM Report abuse -1 rate up rate down Reply
1 reply to mo524's comment
dknowles60

if you can read you will find out that light bulbs dont use vert much power lights bulbs are only 5% of my power bill. its not the fed gov business what light buld i use. it would cost me over 2000 dollars to go to leds. learn math

October 26 2011 at 3:10 PM Report abuse +1 rate up rate down
Robert Simpson

I have a really bold new concept.

Allow ALL the products to come to market and let the MARKET decide what to buy.

The bottom line is Saving Energy. Now who is against that? Nobody.

You tell me there's a Bulb out there that costs me 20% the bucks to operate.....and I don't have to change the bulb for 20 years????? You'd have to pull a knife on me to STOP me from buying them.

It isn't the government's job to FORCE the market to do whatever they THINK is best for everyone.

We are NOT animals. We are Thinking Human Beings.

October 26 2011 at 11:43 AM Report abuse +4 rate up rate down Reply
robrtl

you also get a nice letter from al gore

October 26 2011 at 10:19 AM Report abuse +1 rate up rate down Reply