Policies of banning incandescent lamps take effect As the energy shortage raises energy-saving awareness around the world, incandescent lamps have to fade out from lighting industry. EU, USA, Japan, China have worked out the roadmap of banning incandescent lamps.
LED Lighting takes off As incandescent lamps fade out, based on the absence of dangerous chemicals like mercury and minerals in the product and an accompanying significant reduction in energy consumption depending on the application, LED is considered "green" lighting source to debut lighting stage. It is expected that over the next 5-10 years, the U.S. and the world will transition from incandescent and fluorescent fixtures to LED technology, which is superior in terms of lifecycle, operating costs and energy consumption. However, there are advantages and disadvantages for LED industry development.
Advantage: Along with a constant increasing crude oil price pressure, and a rising awareness of energy-saving and carbon emission reduction, governments around the world have constantly promoted and supported the LED industry, so LED penetration rate has been gradually grown year by year. Such as Chinese standing committee of state council passed the basic public service system planning on 12th Five-Year and scheduled to arrange for 2.2 billion yuan RMB to promote energy-saving lamps and LED lights on May 16. And lately, Chinese government releases the bidding for the 2012 Solid-State Lighting Product Subsidy, bringing hope for many LED firms. In addition, the increasing environmental awareness and the high electricity prices have encourage more and more people to adopt LED lighting. According to a survey conducted by Osram, 60 percent of consumers in Germany are highly interested in saving energy and more than a third are already using LED lamps.
Disadvantage: Price is the biggest consumer complaint. According to a Consumer Reports study, 3 out of 4 Americans prefer CFLs to LEDs, mainly based on LED’s high cost. Consumer Reports looked at LEDs that cost $25 to $60 and CFLs priced between $1.25 and $18. Obviously, most consumers aren't likely to save money by switching from CFLs to LEDs until LED prices drop.
LED companies aim to increase price-performance ratio
Therefore, LED lighting is currently widely used in the biggest barrier is cost. However, according to LEDinside, starting from June 2012, major markets have been seeing less new products with high price-performance ratio releases, with prices of existing products continuing to fall. Instead of engaging each other in a fierce price competition that occurred between late 2011 and early 2012, global first-tier companies are striving to increase their products’ price-performance ratios. Despite the persisting price downtrend, companies aim to maintain their products’ high quality and efficiency.
LEDinside predicts that major markets will see more and more low-end LED light bulbs’ prices drop below US$10, which will make LED light bulbs more cost-competitive in the consumer, construction, and large lighting projects markets.