Posted by Tate Dwinnell |
# |
12:00:44 pm on February 3, 2010
At
a recent rally in New Hampshire, Barack Obama specifically mentioned
LED lighting and described a company that could help to slash the cost
of LED lighting. I did a little research and discovered the company he
was referring to is privately held Arc Energy
LLC of Nashua, NH. Its founder, Kedar Gupta is no stranger to
cleantech success, having founded GT Solar (SOLR) with just $1000 and
cashing out a few years ago.
“That is why jobs will be our number one focus in 2010. And
we’re going to start where most new jobs do – with small businesses.
These are the companies that begin in basements and garages when an
entrepreneur takes a chance on his dream, or a worker decides it’s time
she became her own boss. They’re companies like ARC Energy, which I
visited earlier today. These folks are hard at work on a new
manufacturing process for ultra-efficient LED lights that will make
them affordable for ordinary people. The technology they’ve created is
the only of its kind in the world. They’re this little business in a
condo out on Amherst Street, and they have the potential to
revolutionize an industry. Right here in Nashua.
Small businesses like ARC Energy have created roughly 65
percent of all new jobs over the past decade and a half. And I think we
should make it easier for them to open their doors, expand their
operations, and hire more workers. That’s why I’ve proposed a new tax
credit for more than one million small businesses that hire new workers
or raise wages – and a tax incentive for all businesses to invest in
new plants and equipment. And while we’re at it, we should eliminate
all capital gains taxes on small business investment, so these folks
can get the capital they need to grow and create jobs.”
I had to do some digging to locate ARC Energy’s web site
and eventually had to call them to find it. Considering both the
products and news pages say “we are in stealth mode”, it’s clear the
company wants to operate under the radar for now.. but the visit by
Obama has certainly put them on the map now!
According to the about page, ARC Energy LLC (or Advanced
Renewable Energy Company) was founded in 2007 to develop automated
sapphire crystal growth and processing equipment to significantly
reduce the cost to manufacture LED lighting. The company was initially
funded by its founder Kedar Gupta, but is now receiving funding from
venture capital firm General Catalyst and Citizens Bank.
While GreenStocksCentral.com focuses on publicly traded green
companies, it will be interesting to follow the progression of ARC
Energy and perhaps one day I’ll be writing about their IPO.
While
the demand expansion for LED lighting is probably the worst kept secret
in the tech investing world today, for some reason it was being
virtually ignored at the start of 2009. Of course, for long- term Next
Inning readers, that was good news – it allowed us to buy shares of
sector leader Cree (CREE) in the mid-teens before the rest of the world caught on.
When it comes to the lighting markets, it’s important to understand
the divisions. The market where I think Cree is and will remain the
leader is what is called “high power.”
Revenue growth for LED Lamps was, to say the least, uninspiring for
nearly a dozen years leading up to 2002. However, beginning in 2002,
mobile products began to incorporate larger displays and, with these,
the demand for LED backlighting grew quickly. These tiny LEDs were not
Cree’s strongest suit, but the company enjoyed some modest benefits.
From there, the next leg up started in 2007 and was driven by high
brightness applications like scoreboards and other outdoor displays.
Cree competed well in those markets as it has more recently in the LED
backlight market for LCD TVs (those TV’s advertised as LED are really
LCD with LED backlight versus CCFL backlight).
However, the real story for Cree is what is known as the “high
power” market, which includes ambient and task lighting applications
that are currently dominated by various types of incandescent and
fluorescent lights. High power LEDs are rapidly gaining ground here,
but it will take literally years for them to get beyond a rounding
error in the scope of the aggregate market. In these markets there are
only three viable competitors and Cree is the clear leader.
You can find a number of good reports on Cree on the Next Inning site
by using our search engine to look for the ticker symbol Cree. The
short story here is that while we are only beginning to scratch the
surface for LED demand, investors with an interest in Cree should be
patient and accumulate carefully on weakness.
In a new special report entitled 10 Tech Trends for 2010,
NextInning.com highlights ten technology trends that investors will
need to know about this year, as well gives opinions on several key
tech stocks, including ones that are its favorites for the new year.
For access to the free report,
examining each pick’s business activities, strengths, weaknesses,
latest earnings report, and much more, visit NextInning.com.
We are preparing for our biggest expo yet!
So big, we are moving to the PPA Event Center by Mile High Stadium! Join us as more than two dozen manufacturers are represented in our tradeshow-style format.
We
start the evening with a presentation on LED technology by Jim
Anderson, Director of Strategic Markeing for Philips Solid State
Lighting Solutions. Jim will cover the potential of SSL, current and
emerging applications, initiatives encouraging SSL, technical
considerations when choosing an LED system, and a standards update on
the technology! With over 20 years of experience in the lighting
industry, both at Philips Lighting and LED start-up companies, Jim
Anderson is currently the Director of Strategic Marketing for Philips
Solid Sate Lighting Solutions (formerly Color Kinetics) in Burlington,
MA. Over his career, Jim has held various positions in technology
management, operations management and Marketing, and changed his focus
to LED lighting 5 years ago.
The 12' geodesic sphere is twice the size of
the previous versions and weighs a whopping 11,875lbs. The ball is
covered in 2,668 Waterford Crystal
triangles, ranging size from 4¾" to 5¾" per side, bolted to and powered
by 672 LED modules attached to the aluminum frame and comprising 32,256
Philips Lumileds
Luxeon Rebel RGB plus white LEDs. The result is an output of a palette
of more than 16 million colors and billions of patterns for a
kaleidoscope effect when it drops Thursday night from atop One Times
Square.
While this year's Ball represents more than
three times the number of LEDs used last year, it is actually 10-20%
more energy efficient, consuming only the same amount of energy per
hour as it would take to operate two traditional home ovens.
Two-hundred eighty-eight of the Waterford Crystal triangles are
emblazoned with the new Let There Be Courage design of a ribbon medal
defining the triumph of courage over adversity; 1,440 crystal triangles feature
last year's Let There Be Joy design of an angel with arms uplifted
welcoming the New Year. The remaining 960 triangles are the original Let
There Be Light design of a stylized radiating sunburst.
Focus Lightingcreated
a unique lighting design for the ball that requires more than 3,500
lighting cues to orchestrate the moving patterns, making the sparkle
visible whether viewed from 5' away or 500' from the streets. "We tried
to create a beacon of light in the sky over Times Square," says Paul
Gregory, principal lighting designer for Focus Lighting.
Philips
Lighting engineer Oscar Zheng assists a Landmark Signs technician in
upgrading the Times Square Ball Numerals with new Philips LED flood
bulbs.
Lighting Science Group
designed, developed, and produced the lighting system for the new ball
to seamlessly integrate the Waterford Crystal with the Philips Luxeon
Rebel LEDs. Hudson Scenic Studio designed, developed, and produced the
structural framework, including the hoisting system for raising and
lowering the ball on the new 141' mast. E:Cue Lighting Control provided the lighting
control system, and Lapp Group provided
the power and control cabling for the Ball.
This is only the seventh version of a new ball
in 101 years, the first made of iron and wood, weighing 700lbs, and
covered with 100 light bulbs. This new version will become a year-round
attraction above Times Square in full public view January through
December. "For one hundred years, the Times Square New Year's Eve Ball
has attracted millions of revelers to Times Square on December 31 to
celebrate the beginning of the New Year" says Jeff Straus, president of
Countdown Entertainment and co-organizer of Times Square New Year's
Eve. "The new Times Square New Year's Eve Ball will be a bright
sparkling jewel atop One Times Square entertaining New Yorkers and
tourists from around the world not only on December 31, but throughout
the year."
Also new this year, Philips has converted the
companion Times Square Ball Numerals (2-0-1-0) to all-LED technology.
The 545 custom-designed Philips scalloped LED flood bulbs lighting the
Times Square Ball Numerals use just 9W each, compared to the 40W
consumed by the incandescent and halogen bulbs previously used,
representing a 78% energy savings.
"Following our landmark upgrade of the Times
Square Ball to LED technology over the past two years, we are very
excited to deliver yet another innovative LED solution that helps to
elevate the impact and sustainability of the Times Square Ball through
the use of our powerful new LED flood bulbs in the Numerals," said Ed
Crawford, CEO, Philips Lighting North America. "Global icons like the
Times Square Ball are not the only applications that can enjoy the
benefits of LED technology. In addition to offering a wide range of
professional LED solutions, we are delighted to offer a broad line of
LED retrofit bulbs to consumers for the first time, enabling everyone
to enhance their life with light through high performance, energy
efficient and long life LED lighting."
While
compact fluorescent lamps have benefited from aggressive promotion,
adoption in the consumer lighting market has slowed. Meanwhile, LED
lighting has begun to gain mind share, at least in energy-efficiency
circles, and the LED lighting industry has continued to grow in spite
of the economic downturn.
+++++
STRATEGICALLY SPEAKING:
Insights Into LEDs & Lighting, from Strategies Unlimited
+++++
VRINDA BHANDARKAR
Many energy efficiency programs have been promoting compact fluorescent
lamps (CFLs) to reduce energy use. Rebates and discounts by major
retail outlets have dramatically increased shipments of CFLs in the US
— from 5% of the total lamps bought in 2004 to 23% in 2007. The U.S.
Environmental Protection Agency (EPA) estimates that ENERGY STAR CFL
sales for 2007 were nearly double those in 2006.
However,
gains in efficient lighting have been fragile in the U.S. Sales of CFLs
have dropped in the current recession to 21% of total U.S. consumer
light-bulb sales in 2008 from 23% in 2007, according to the U.S.
Department of Energy (See Figure 1). The steep decline in CFL
shipments, even in regions that had invested in CFL promotions such as
Vermont and Massachusetts, is a cause of concern to all who aspire to
promote energy efficient lighting.
Figure 1
U.S. Lamp Shipments and CFL Market Share
Source: U.S. Department of Energy, analysis by D&R
international; CFL Shipments – U.S. Department of Commerce;
Incandescent Shipments – D&R, based on Navigant Lighting Study,
RECS, DOC.
There are many possible reasons for this decline in the market share of
CFLs. New users have not been added to the market as disposable incomes
have declined and customers are sensitive to higher prices Early
adopters bought the long-lasting CFLs and the rest of the market has
not followed suit Color quality issues of CFL persist and cannot be
overcome with incentives Fear of mercury in CFLs has not been
adequately addressed.
In order to promote energy savings, CFLs are heavily discounted
or are being given away, and incandescent bulbs are scheduled to be
banned in the U.S beginning in 2012 (they are already banned in
Europe). In spite of heavy investment in promoting CFLs, incandescent
technology has proved difficult to unseat, especially in the
residential segment.
There is no publicly available data on the number of CFLs that
are recycled, but in a report on CFL recycling programs around the
world published in July 2009 by the Northeast Waste Management
Officials’ Association (NEWMOA) [www.newmoa.org/prevention/mercury/lamprecycle/CFLRecyclingReport.pdf]
CFL recycling rates vary from 87% in Taiwan (which includes all
fluorescent) to 3% in 2004 in Canada. Only 2% of CFLs were recycled by
German households in 2008. There is increasing evidence that efficient
recycling of CFLs is going to require heavy investments in new
infrastructure and public education.
Although CFLs
were introduced in 1980s, they became a part of energy policy only in
this century. If it had been left to the markets, CFLs would likely
have made only a small dent in the market by now.
Today CFLs are the technology most closely associated with
energy- efficient lighting, but LED lighting has started gaining mind
share, at least in energy efficiency circles. The economic downturn has
dampened the rate of the transition to efficient lighting technology.
However, issues relating to global warming, energy security and
environmental degradation are now a part of the public psyche. Although
not many people have invested in efficient lighting, the awareness
about efficient lighting options has increased. The LED lighting
industry has continued to grow in spite of the economic downturn.
Since 2008, the price of HB LEDs has declined 10% to 25%. More LED
manufacturing capacity has been created. The quality of white LEDs in
terms of lumen output and CRI has improved. Warm white LED luminaires
are comparable in terms of quality of light with incandescent lamps,
but without their inefficiencies. However, the volumes have not yet
reached critical levels at which the costs can be as competitive with
CFLs.
There have been attempts around the world to design “demand pull” and
“supply push” strategies for CFLs. The rate of penetration is directly
proportional to the investments made in promoting CFLs. The outright
ban on incandescents with distribution of free CFLs in Cuba has paid
off. Similar strategies can be directed to LED applications that are
ready to be pushed into the marketplace with no fear of releasing
mercury. Moreover, LEDs can be used with controls that can offer
further energy savings that are not possible using available CFL
technology.
China has made developing LED technology one
of its national priorities. It has embarked on the 21-city program,
which will showcase LED applications, and it is expanding LED
manufacturing clusters to seven regions. The grand experiment with LED
streetlight installations is going through iterations, improving these
products in the process.
Just three years ago LEDs were too dim for street lighting; in 2009 Los
Angeles is installing 7,000 streetlights, with tens of thousands more
planned for following years. There is an expectation that the problems
relating to toxic material content, quality of light, and reliability
of performance, like those encountered by CFL products, can be avoided
by LED technology. There are agencies and organizations working to
prevent those problems in spite of market pressures to flood the market
with substandard products. This time it can be different.http://www.ledsmagazine.com/features/6/12/3
