A short market insight on how the ban on incandescent lighting is going to effect the lamp market; in particular the CFL and LED illumination markets.

1. The EU Ban on Inefficient Lamps
An Analysis of It’s Impact and Repercussions
Akhil Sivanandan
Research Analyst,
Environment and
Building Technologies
July 2009
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4. Phasing out incandescent lamps in the EU
In February 2009, the EC decided to implement a planned phase out of inefficient forms of lighting for general illumination
purposes. This resolution is mainly targeted at phasing out incandescent lamps starting 2009, but will over the course of a 7
year period encompass other forms of lighting.
This article is intended to deal with the first two phases of the directive. It tries to give an explanation on:
•The major technologies impacted.
•The current and future strategies likely to be adopted by market participants in dealing with this.
•Medium and long term implications of the ban.
The main pieces of legislation that will impact the market during this time are:
• The first two phases of the ban on clear and non-clear lamps that will be implemented from September 2009 onwards.
The latter phases are still unclear as they will be modified post 2014.
• Directive on the restriction of the use of certain hazardous substances in electrical and electronic equipment:
2002/95/EC (RoHS directive).
• Directive on the energy performance of buildings: 2002/91/EC (EPBD).
• Eco-design of Energy-using Products: Directive 2005/32/EC (EuP).
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5. The Current Situation
Lamps Market: Current Market Scenario (Europe), 2009
Efficiency
CFL
LED
Incandescent
Size of
bubble is
indicative of
market size.
Growth Source: Frost & Sullivan
• A look at the current lighting scenario shows a mature incandescent market outselling energy efficient
technologies like compact fluorescent lamps (CFLs) and light emitting diodes (LEDs).
• However, the CFL and LED markets are both growing at a higher rate. The increasing efficiency of these
products helps sustain growth.
• Costs of these products have also been dropping, making them more accessible to the consumer.
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6. Phasing out inefficient lighting:
The Roadmap
Legislative Roadmap for Phasing out Inefficient Lighting (Europe)
2008 2009 2010 2011 2012 2013 2014 2016
Incandescent and all
Initial Draft. halogens which don’t
Consumers and have A rating
market discontinued. Only clear lamps with
participants CFLs and LEDs with A low voltage halogen
notified rating allowed. Second level with integrated or non-
functionality integrated
Energy labelling
requirement for Incandescent/ Incandescent Incandescent All requirements transformers reaching
all lamps conventional /conventional /conventional Incandescent and Review class B allowed. Other
halogen > halogen > halogen > /conventional regulations as decided
100W below C 75W below C 60W below C halogen in stage 5
discontinued discontinued discontinued below C
discontinued
B & C Halogens
allowed
Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Stage 6
Clear lamps Notable exceptions:
Source: Frost & Sullivan;
Fluorescent lamps without integrated ballasts, European Commission
Non-Clear lamps
HID lamps
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7. Roadmap Explanation
The EU has set 2 different targets for clear and non-clear omni-directional lamps. It should be noted that legislation covering
directional lamps (i.e. – those with at least 80% of light output concentrated in a solid angle less than 120 degrees) is
currently in the works and should come into play when new energy labels are implemented post 2012. A staged entry format
is there for these targets in order to give manufacturers time to redesign or develop their products.
For clear lamps:
• The minimum standards for clear lamps will come into complete effect from September 2009.
• All clear lamps which do not have an A rating under current eco-design ratings are to be banned from sale in stores
unless they are for special illumination purposes. This will effectively stop sales of all incandescent and low efficiency
halogen lamps.
• The lamps used for special illumination purposes will have to be labeled as such, clearly marking their specific purpose
and functionality as per EU guidelines as well as noting that they are not suitable for household illumination.
For non-clear lamps:
• The phase out will be more gradual. From September 2009 onwards, lamps greater than 100W with ratings less than C
(i.e. D,E,F and G) will be discontinued. All lower wattage lamps of F&G class will be phased out so only E class lamps
remain.
• From September 2010 onwards, lamps greater than 75W below C class will be discontinued. The wattage is decreased
every year as per the diagram until by 2012, all lamps (incandescent/halogen) below C class are discontinued.
From 2013 onwards, the levels will be made progressively stricter, thereby phasing out all incandescent lamps. The second
level functional requirements will come into being, also new technologies and labeling schemes will also come under review.
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8. Impact on the Incandescent lamp market
Lamps Market: Current and Future Trends (Europe), 2009
100
Long term: 2 paths are possible.
100
Scenario 1: Complete replacement
Lighting Market Share(%)
by CFLs, LEDs or other
technologies (like improved halogen)
in all aspects.
0
Scenario 2: Continued development
100
and need of incandescent in
specialist applications.
Incandescent
CFL
LED
Other technology (halogen,
0 0 long fluorescent etc.)
2008 2010 2012 2016 Source: Frost & Sullivan
The legislation is slightly misleading as far as the impact on incandescent lamps is concerned.
Immediate effect – Shift from general
illumination to specialist applications for It does not outright ban the technology of incandescent lamps, but only those ones which are
incandescent. used for general illumination and cannot meet the efficiency rating criteria (which most can’t).
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9. Impact on the CFL market
CFL Market: Current and Future trends (Europe), 2009
Growth
Size of bubble
is indicative of
market size.
2008 2012 2016 Source: Frost & Sullivan
• Immediate application space for CFLs is in the residential sector. Over the span of the new legislation, it will gain
greater market size in both residential and non-residential sectors as it begins to replace incandescent lamps.
• High growth in the initial years as apart from long fluorescent lamps, CFLs are the only major alternative to
incandescent lamps, especially for residential applications. This will decrease over time due to competing technologies
and market saturation.
• The problem of mercury content will be regulated by the RoHS (if unregulated, mercury emissions would increase from
2.9 tonnes in 2007 to 3.1 tonnes by 2020). However, continuing evolution of the technology might remove this problem
altogether. From stage 2 onwards, it will be a maximum of 1.23 mg of mercury for each CFL.
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10. Impact on the LED market
LED Market: Current and Future trends (Europe), 2009
Retail revenues
Customised
solution
revenues
Size of bubble
is indicative of
market size.
2008 2012 2016 Source: Frost & Sullivan
Current scenario:
More than 90% of revenues for illumination comes from customised projects and solutions for commercial applications.
LEDs for illumination are classified as A class, but do not have significant volumes to warrant closer evaluation.
Short term scenario:
Not much change in status quo over the next few years. Gradual shift to main stream will take place.
Long term scenario:
Majority of revenues from off the shelf solutions through retailers rather than customised solutions.
Establishment as a mainstream technology.
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11. Conclusions
• Incandescent technology will either be phased out completely or will have very niche
applications in the short term.
• The main succeeding technology will be CFLs and to an extent long fluorescent lamps
like T5s. This holds true for both the short and the long term.
• LED lighting is still mainly for bespoke applications in the commercial sector. Large
increases in penetration for the residential sector will not happen in the short term.
• Manufacturers with greater experience in the new technologies will have greater success
rates due to established reputations and an increased distribution base.
• Stricter quality control measures after the first two stages will also play in favour of
established manufacturers who will be better positioned to upgrade and improve their
products.
• Climate change legislation will also play a part. Partnerships with utility firms and other
vested interests could boost market image and thus increase market penetration for new
technologies and for manufacturers.
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