The rise of LED lighting has meant major energy savings over the last 10 years, particularly in the residential sector. But savings opportunities for these residential utility lighting programs will soon be fading out because of growing LED market saturation, as well as potential federal standards coming into effect entering the next decade.
In commercial lighting, on the other hand, there’s still a lot of untapped savings potential to be found.
Across all sectors, the average efficacy of lighting installations has been rising dramatically—from 36 lumens per watt in 2001, to 40 lumens per watt in 2010, to an impressive 51 lumens per watt by 2015. These improvements are happening because of investment in more efficient technologies (like LED), public awareness campaigns, and federal and state regulations.
One such regulation that is still in a state of flux is the Energy Independence and Security Act of 2007 (EISA). If enacted as originally written (to be determined), it would mean that general service screw-based lamp products manufactured and sold in the U.S. would have to have a minimum efficacy of 45 lumens per watt (LPW).
But because general service, screw-based lighting accounts for only 10 percent of commercial installations compared to 90 percent of residential fixtures, EISA’s potential impact will be much smaller for the commercial sector than for residential savings programs.
Of the lighting products used in commercial and industrial buildings right now, about 72 percent are indoor linear fluorescent fixtures, 10 percent are outdoor installations and 8 percent are indoor nonlinear products. Because of their large installed base and the relatively low LED market saturation, each of these categories offers plenty of potential for future energy savings.
Couple this with the fact that in 2015, about 40 percent of total US lighting electricity was used in commercial buildings, and you can appreciate the scale of the potential savings involved.
The biggest projected savings opportunity between now and 2035 is in converting indoor linear fixtures to LED. The Department of Energy (DOE) estimates that right now there are 850 million linear fixtures available for replacement or retrofit across the country.
Outdoor products offer the second highest remaining potential, because of the large installed base of this category. Screw-based LED products have been a big source of utility savings over the past decade, but they now represent a tiny portion of the remaining savings potential.
In 2017, the proportion of commercial indoor linear fixtures that had been converted to LED was only around 6.5 percent. This is because the incumbent fluorescent technology is still reasonably efficient, so historically there’s been less incentive to replace it. But the DOE predicts that LED market penetration will reach 80 percent in this category by 2035, as prices continue to fall and performance steadily improves.
For outdoor products, on the other hand, LED adoption has been much higher, at 25–35 percent, partly because LED was introduced to this market earlier. LED also offered greater potential savings compared to existing technologies. So, future annual savings from new outdoor LED installations are more limited—in fact, they’re set to plateau and then gradually decline, starting as soon as 2020. But this will be offset for a few years by growing annual savings from indoor products, as this graph shows.
Potential annual energy savings from LED, in the US commercial and industrial sector, based on DOE stock estimates, and forecasted adoption and efficacy. (Graph from DLC (2018) Energy Savings Potential of DLC Commercial Lighting and Networked Lighting Controls.)
The DOE forecasts that with continued promotion from utilities, energy savings from LED lighting in the commercial sector will keep climbing to reach their highest point around 2022. And if utilities actively promote LED installation in conjunction with networked lighting control (NLC) systems, which bring extra savings of 47 percent on average, the overall energy savings potential will be even higher still (78 TWh in total, by 2015).
Considering past, present and future savings opportunities, it becomes clear that while the residential sector offers much less promise for the future, there’s still a whole lot of low-hanging fruit for utilities when it comes to savings from commercial lighting programs.
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US Department of Energy, Office of Energy Efficiency and Renewable Energy (2017) 2015 U.S. Lighting Market Characterization: https://www.energy.gov/eere/ssl/2015-us-lighting-market-characterization
DLC (2018) Energy Savings Potential Of DLC Commercial Lighting And Networked Lighting Controls: www.designlights.org/resources/energy-savings-potential-of-dlc-commercial-lighting-and-networked-lighting-controls
DLC (2017) Energy Savings from Networked Lighting Control (NLC) Systems: https://www.designlights.org/lighting-controls/reports-tools-resources/nlc-energy-savings-report
Lighting Channel Manager, LC
Kyle Kichura is our team’s subject matter expert when it comes to lighting. From design to implementation, he has acquired over a decade of experience with lighting efficiency. Kyle manages the lighting aspects of Franklin Energy’s programs, including upstream product engagement and lighting product qualification. Kyle holds a bachelor’s degree in business administration from the University of Wisconsin-Oshkosh and is lighting certified (LC) through the National Council on Qualifications for the Lighting Professions (NCQLP). He serves as a member of the Illumination Engineering Society of North America, board member for the Milwaukee Chapter, and represents Focus on Energy within DesignLights Consortium’s™ (DLC) technical committee.