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Targeting 100% LED lighting sales by 2025

Part of Technology and innovation pathways for zero-carbon-ready buildings by 2030

About this report

This analysis is part of a series from our new report, Technology and innovation pathways for zero-carbon-ready buildings by 2030, and provides the strategic vision of experts from the IEA Technology Collaboration Programmes (TCPs) on how to help achieve some of the most impactful short-term milestones for the buildings sector outlined in the IEA’s Net Zero by 2050 Roadmap; each report’s title reflects one of these milestones. Learn more about the report and explore the TCPs.

Highlights

All over the world, new companies focusing solely on Light-Emitting Diode (LED) technologies are entering the market and challenging some of the traditional lighting companies, further facilitating the market transition that will contribute to significant CO2 emissions savings. Market players are moving quickly, with companies developing and introducing increasingly efficient products with better performance, smart features and excellent quality light.

However, policy makers must keep pace by implementing and enforcing regulations in the buildings sector to ensure the switch in the global lighting market to 100% LED by 2025 is reached — a key milestone in transforming the global buildings sector under the Net Zero Emissions by 2050 Scenario (NZE Scenario). Many national and regional policies are already leading markets towards efficient lighting technologies through minimum energy performance standards (MEPS), energy labelling, quality assurance, and incentive programmes. But with the 2025 target just three years away, more needs to be done.

Relevance

LED lighting can now be found across all applications in the market, from use in small keychains to football stadium flood lighting. LED technology is the most efficient way to convert electrons into photons, and it also offers features such as longer lifetime, superior integration with lighting controls, better optical control, improved dimmability, and colour-shifting. From a circular economy perspective, LED light sources have the least environmental impact, offering the best options when looking across the whole product life cycle. The energy efficiency – or “efficacy” for light sources – is expected by the US Department of Energy to continue to improve through 2050, further reducing the environmental impact and lowering running costs. More improvements are incentivised because higher efficacy means more light per chip (so fewer chips are needed in each light source) and lower electrical currents (so LED drivers can be reduced in size and last longer).

LED lighting is already highly cost-effective compared to conventional light sources, especially incandescent, halogen and fluorescent lamps. Direct, drop-in replacement LED products have been developed by the industry so that fixtures do not need to be changed. These drop-in LED retrofit solutions allow existing fixtures to remain in place while the end user can benefit from substantially lower running costs. Compared to incandescent, LED lamps offer 80-90% energy savings. Compared to fluorescent, they achieve 50-60% savings.

LED retrofit tubes can have payback periods as short as four months (replacing linear fluorescent lamps). For general lighting service (A-type) LED lamps, the payback can be instantaneous or just a matter of weeks when compared with tungsten-filament light sources and compact fluorescent lamps (CFLs) – thereafter the LED products last typically for five to ten years depending on the lamp lifetime and usage, generating even more savings.

Compared with fluorescent lighting technologies, LED lighting systems are much easier to integrate with smart controls to create intelligent and responsive living environments in homes, offices and cities – delivering light when and where it’s needed. LED technology also offers substantial benefits for households that are off-grid, and given its durability and efficiency, this sector converted to LED more than a decade ago.

Current state

LED lighting is already a mass-market technology in developed economies and is gaining a growing share in many emerging and developing countries. Indeed, the technology has evolved so quickly that in 2022 chip-on-board LEDs lumens per watt (lm/W) offer efficacies over 150 lm/W – double the efficacy of the fluorescent technology – with high colour rendering and stability. The best commercialised non-directional lamps are 210 lm/W – over 15 times more efficient than incandescent and four times more efficient than CFLs.

China is the world’s largest producer, consumer and exporter of LED lighting products, with ongoing policy initiatives moving their market towards 100% LED lighting.

Many governments around the world are acting quickly to phase out inefficient light sources through performance standards, labelling and incentive programmes, such as in Europe where the transition to LED started over a decade ago. The European Union recently updated regulations under the Ecodesign Directive and the Restriction of Hazardous Substances Directive that will together eliminate virtually all fluorescent lighting in 2023. In Africa, 16 countries in the Southern African Development Community (SADC) have adopted a regionally harmonised lighting standard that will move their market to all LED in the next few years. Six countries in the East African Community (EAC) are also adopting lighting regulations that will phase out fluorescent. Other jurisdictions, including countries in Southeast Asia, are introducing similar measures.

Challenges

Despite recent market progress, several challenges remain. LED lamps often have a higher upfront cost, but incremental costs are decreasing and paybacks are rapid. Bulk procurement and awareness campaigns can help further reduce the upfront cost and to accelerate the shift towards LED lighting sales.

The market also needs to be protected from poor quality products in terms of consumer experience (life, colour, appearance, efficiency, standby power) as well as health (flicker, blue light, safety). Improved metrics for LED lighting can be delivered by better policy measures and regulations. In fact, it is important that LEDs installed offer end users a good quality consumer experience, including long life, good colour quality and low energy consumption, among other factors. These aspects can be addressed through mandatory quality and performance regulations, such as those recommended in the IEA’s Solid State Lighting (SSL) Annex’s Quality and Performance Requirements for LED Lighting Products.

New and sustainable business models are also needed to move towards lower volume sales of LED lighting with improved product quality and features, such as an increased building level systems integration (home energy management systems).

Putting in place systems for end-of-life collection and recycling is also a critical challenge faced by the lighting market. 

Innovation themes covered by the IEA TCPs
  • Improvement in the efficacy of LED chips. Complementing this are better methods of testing and regulating the lifetime of LED products through advanced metrics and test procedures.
  • Improve the circularity of LED technology, including modular approaches, upgradable light engines and replaceable parts, to extend the serviceable life of LED luminaires.
  • Energy consumption for smart features that improve the user experience (smart lighting).
  • Metrics for measurement, and establishing evidence-based requirements (quality and performance requirements).
  • Reducing life cycle assessment impacts and improving understanding of linkages and effects between lighting and both human health and the environment.
  • Enhance metrology through improving standards and laboratory accuracy (interlaboratory comparisons).
  • Integrated solutions for daylighting and electric lighting that improve comfort and lighting quality.
Policy recommendations

Strategies

Policy recommendations

Market creation and standards

 

Enforce minimum energy performance standards (MEPS)

Regulation and monitoring. Implement and periodically review MEPS for lighting in all countries that phase out conventional (i.e. non-LED) lighting technologies by 2025.

Government procurement

Green procurements. Adopt a green procurement specification for 100% LED lighting as soon as possible; include quality and performance criteria using the IEA 4E SSL Annex guidance.

Planning instruments

 

Include power density limits in energy planning

Local and national energy planning. For new construction and renovation, define and introduce maximum power density limits, incentivising the use of controls for optimisation of the illuminated space.

Economic and financial instruments

 

Economic incentives and bulk procurement

Financial incentives. Provide subsidies, tax breaks, public procurements and other fiscal incentives to encourage and accelerate market adoption of LED technology. Engage electric utilities in LED promotion schemes.

Enable innovative business models

Regulation. Support circular economy through “lighting as a service”, whereby high-efficacy lighting services are leased from lighting specialists rather than owned by the end user.

Cooperation-based instruments

 

Enable international cooperation-based programmes

National and international collaboration. Launch programmes to work with other governments regionally and globally, and consider developing harmonised standards on lighting quality and performance.

Public support to R&D

 

Support domestic LED manufacturing and start-ups

Allocate funding. Provide financial resources to support the start-up of domestic LED lamp and luminaire manufacturing.

Develop laboratory capacity

Allocate funding. Support the development of lighting laboratories through funding and grants, encourage accreditation to key metrics used in the national MEPS.

Education and training

 

Awareness campaigns

Awareness raising Conduct communication campaigns to help consumers to choose optimal lighting sources (and understand lumen equivalency, colour temperature and other key metrics). Provide education for efficient and healthy lighting design.

Analysis