News Article

Incentives Needed For LED Streetlight Adoption

Oakland study finds that, at current prices, it could take as long as 26 years for LED streetlights to deliver a return on investment through energy savings.

Streetlights based on current high-brightness LEDs will require government or utility incentives, if they are to become adopted on a much wider scale to cut energy consumption in the US.

A study for the US Department of Energy (DOE) by energy company Pacific Gas and Electric (PG&E) found that, while the quality of light produced by solid-state luminaires was at least as good as that from regular high-pressure sodium lamps, their much higher up-front cost means that the energy savings offered could take decades to translate into genuine financial savings.

The assessment took place on public roads in Oakland, California, where fifteen 78 W LED luminaires replaced standard 121 W high-pressure sodium lamps.

In her report, project manager Mary Bryan from PG&E found that although the LEDs delivered a lower average brightness to the street, this did not compromise the quality of illumination. In fact, the LED luminaires improved overall uniformity compared with the sodium lamps, which tend to create over-illuminated "hot spots" that waste energy.

As expected, the LED lamps saved on energy costs. And, since the DOE estimates that roadway lighting accounts for 1 percent of total US electricity consumption, LEDs have the potential to offer massive energy savings if widely deployed.

"The LED luminaires used in this study reduced energy [consumption] by over one-third compared with the previous luminaires," wrote Bryan, adding that in PG&E s service territory, some 860 GWh of electricity is used annually for road lighting. If adopted in half of the road lighting luminaires in PG&E s area, LEDs would slash an estimated 150 GWh from this figure.

Interestingly, the sodium lamps used in the study actually had a higher efficacy than the LED-based luminaires (60 lm/W, compared to 57.5 lm/W).

However, because of the better uniformity of the LED illumination, sufficient performance could be achieved with these luminaires running at a reduced power and total lumen output.

The cost issue
The down side, economically speaking, is that the 36 percent reduction in electricity consumption offered by the switch to LED lamps remains massively outweighed by their higher cost at present.

"Despite the electrical savings, the present up-front cost of LED street lighting luminaires may be a barrier to their current adoption," Bryan said.

In various lamp replacement scenarios described in the report, the payback period for LED lamps - at their current cost - varied from nearly 12 years to more than 25.

The key word here is "current". As acknowledged in the DOE report, the rapid improvement in LED efficacy (estimated at 35 percent each year) and the decreasing cost of the technology (estimated to drop an average of 20 percent annually) should dramatically shrink those payback periods before long.

For brand new streetlamps, where there is additional construction cost to take into account, each LED luminaire would need to cost only $250 to meet an ideal payback period of two years. For a five-year payback, $350 would be acceptable.

But for the more likely retrofit replacement scenario, the aims are much tougher: "It would be difficult for the LED luminaire to meet a two-year simple payback period, and the price would have to be below $100 to meet a five-year simple payback," the report said.

The conclusion is clear. At the moment, LED lamps for road lighting are too expensive to make economic sense in the US. Or, as the report puts it, "LED luminaires show economics that are still at the outskirts of acceptability for the majority of commercial customers."

There are two ways to change that scenario. The first is Technological, through improving LED efficacy, and by cutting chips costs through increased manufacturing volumes. The second is through subsidies. Utilities or governments could tip the balance in favor of LED adoption by taking on some of the initial investment costs.

"These utility incentive programs should require minimum performance standards for qualifying products in order to ensure long-term energy savings," concluded the DOE report.

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