The Insignia 800 lumen, 60-watt dimmable LED
Best Buy hopes $10 is tipping point for consumers on LED bulbs
- Article by: John Ewoldt
- Star Tribune
- May 18, 2013 - 9:05 PM
Holding out on trying an LED light bulb until the price comes down? Best Buy is waiting for you.
The Richfield-based electronics retailer quietly introduced 40- and 60-watt equivalent LED bulbs late last year for $15 and $18, but a subsidy from Xcel Energy will drop the prices to $9.99 and $10.49 in most Twin Cities stores starting Sunday.
“Our goal was to sell LED bulbs for under $10,” said Mike Dahnert, global product manager at Best Buy. “We think that’s the magic price point.”
In 2012, Best Buy entered into a license agreement with local inventor Dave Carroll to sell his now patented bulb that looks like an incandescent. Like many retailers, the company initially climbed aboard the LED bandwagon because the bulbs offer a longer life span of 10 to 20 years and energy savings of 70 to 80 percent. Once retail prices sank below $20 per bulb, more jumped on.
Best Buy, which sells the bulbs under its private-label Insignia brand, waited to market the bulbs until they qualified for Energy Star designation and utility subsidies. With both in hand, the company will soon begin promoting the bulbs more aggressively, Dahnert said.
The move comes at a time when the LED market could use a ray of hope. In 2012, LED made up only 2.5 percent of lighting products sold, including residential, municipal and commercial sources, according to the Department of Energy (DOE). Since LED came on the mass market in 2009, consumers have had concerns about cost and quality, said James Brodrick, lighting program manager of the Building Technologies Office at the DOE. “They’re hesitant to try something new,” he said.
Blame the compact fluorescent. Despite massive PR campaigns from utilities about CFLs’ energy savings that started around 2005, consumers were turned off by the bulbs’ hazardous materials and overstated life spans. Their cool blue light, slow warm-up, and “pig tail” shape also failed to spark consumers’ interest.
“CFLs’ success never materialized because they didn’t deliver what consumers wanted — good color, long life and dimmability,” said Michael Siminovitch, director of the California Lighting Technology Center at the University of California, Davis. “We learned that people buy service, not energy savings.”
The fact that the LED market is already growing faster than compact fluorescents is a sign that the lighting industry isn’t repeating that mistake. With better technology, more manufacturers and prices falling into the $10 range, LED is poised to bring about the biggest change in lighting technology since the 1940s, Brodrick said.
But some insiders are careful not to get overconfident. Too many LED bulbs of questionable quality are still being sold, said Niral Patel, president and owner of Solus LED in St. Louis Park, a lighting efficiency consultant and commercial supplier of LED products. “You get what you pay for,” he said.
Siminovitch thinks putting the emphasis on price is a race to the bottom. It could mean compromises on color quality, consistency, dimmability and humming issues, he said. Even worse, safety. Earlier this year, 550,000 LED bulbs sold under Definity, EcoSmart, Sylvania and Westinghouse brands were recalled for a possible fire risk.
Online reviewers of many LED bulbs confirm quality concerns. Some reviewers of the Insignia bulbs at BestBuy.com have commented online about humming or flickering when the bulbs are dimmed.
“We’re aware of it and we have some solutions in the works,” Dahnert said. The Insignia bulbs come with a 10-year, no-questions-asked warranty.
Admittedly, today’s LEDs don’t dim as well as incandescents, but that should improve in the next year, Siminovitch said. Until then, consumers should return the ones that dim poorly or consider replacing older, standard dimmer switches with those made for LEDs.
Consumers can’t avoid all issues just by buying higher-priced LED bulbs, said Celia Kuperszmid Lehrman, deputy home editor at Consumer Reports. There are good and bad bulbs at $13 to $15, but spending $20 to $25 is no guarantee of getting a good bulb either, she said.
That’s frustrating for consumers. When people bought incandescents, they couldn’t make a mistake, said Kuperszmid Lehrman. “Buying LED, they can.”
That requires a different mind-set than the days of mindlessly choosing a bulb off the shelf. Consumers need to change their frame of thinking when buying LED. “It’s more like buying a microwave than a coffee filter,” Brodrick said. “You’re going to have this bulb for 10 years or so.”
4 billion bulbs
With prices expected to drop another 50 percent in two to three years and quality rising, experts think there will be a big shift to LED in the residential market within 18 to 24 months. Consumers will be the beneficiaries of the race to meet and beat the $10 price barrier.
Best Buy may be in the lead for now, but Home Depot will soon be able to undercut Best Buy’s prices with two versions of a 60-watt LED equivalent from Cree Inc. The hardware giant has been selling two versions for $13 and $14 without a subsidy since March. After the bulbs receive Energy Star approval, which is pending, they will be eligible for utility subsidies, pushing them below the $10 benchmark that Best Buy has set.
Regardless of price, the sheer number of bulbs to be replaced has manufacturers and retailers beaming. North American residents have about 4 billion incandescent light bulbs in their homes, said Mike Watson, vice president of marketing at Cree Inc. Still, LEDs aren’t expected to capture the majority of the lighting market until 2020, Brodrick said.
Part of the delay can be attributed to consumers who stocked up on 75- and 100-watt incandescents after the Energy Independence and Security Act of 2007 required manufacturers to quit making them. The 40- and 60-watt incandescents, while still on store shelves, will be phased out by the end of 2014.
Eventually, the LED industry hopes to dazzle consumers with quality and features instead of low prices and energy savings. Instead of choosing between warm or cool light, LEDs will offer consumers the ability to choose their hue on a controller. Research at the California Lighting Center has shown that consumers tend to prefer redder hues at sunrise, blue in midday to match the overhead sun, and red again at sunset, said Brodrick.
LED also will allow us to put lights on walls, surfaces and edges, Siminovitch said. “We could have panels, partitions and walls creating soft, low-glare light.”
John Ewoldt • 612-673-7633
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