CONTRACTOR Trend: Time to Change the Perception
Less than 20% of US Professionals believe that LED Tubes are Ready for the Market.
The Source of this research statistic is the 2011 Electrical Contractor Magazine survey of 700 Electrical Contractors regarding their opinion on the readiness of LEDs. Only 19% of the surveyed contractors believe that LED Tubes are ready to replace traditional Fluorescent Tubes. The bullet points below include the other comparative findings from the survey with the Lamp Type and the corresponding % of the Electrical Contractors that believe LEDs are ready to replace traditional lamps:
Compact Fluorescent (CFLs): 23%
Fluorescent Tubes: 19%
Simply, the vast majority of individuals across the energy and lighting landscape, have been disappointed with the quality of the imported LED Tubes and the lack of a robust and reliable thermal management system. The EAGLE LED TUBE has begun to change market perception. See the Challenge > Solution > Results file to shift industry opinions: GAME CHANGING LED PRESENTATION: Introducing the 'EAGLE LED TUBE' Series
MARKET Trend: Large and Growing Market
Now is the time to take advantage of the opportunities across the Building Illumination sector.
See the cart to the right illustrating that the Building Illumination sector for LEDs is growing at over 50% per year. Linear lighting dominates the Commercial and Industrial sector, so the LED Tubes and Multi-Tube Fixtures are at the center of retrofit and new construction opportunities.
ROI Trend: High Return on Investment
LED Tubes produce the top results across the high efficiency lighting options.
See the OPERATING COST REPORTS to the right that illustrate the LED Tube performance. The Independence LED Lighting researchers develop and provides these and other graphics and statistics to support the sales and communications efforts of our Authorized Resellers:
TAX Trend: The EPAct LED OPPORTUNITY
The Energy Policy Act (EPAct) of 2005 created the Energy Efficient Commercial Buildings Deduction, which allows building owners to deduct the entire cost of a lighting or building upgrade in the year the equipment is placed in service, subject to a cap of the total cost of the system or $.60 / Sq. Ft. of the retrofitted area. The Emergency Economic Stabilization Act of 2008 (HR-1424), approved and signed on October 3, 2008, extends the benefits of the Energy Policy Act of 2005 through December 31, 2013.
EPAct for LEDs - The LED Tube Advantage:
LED linear ‘Tube’ lights, such as the EAGLE LED TUBE, reduce the wattage from a traditional T8 4’ Fluorescent Tube form 32 Watts down to 15 Watts. This reduction of over 50% lifts the LEDs to the maximum EPAct Tax Deduction bracket of $.60 / Sq. Ft. The EPAct Tax Deduction includes the cost of the LEDs and the Installation Labor, which means the entire cost of the lighting project is eligible for this incentive in the same year.
The EPAct Tax Deduction is available for Building Owners that pay Federal Taxes, so Not-For-Profit Organizations, and most Real Estate Investment Trusts (REITS), Condominium Associations and Private Schools are ineligible. However, Publically Owned Buildings such as Municipal Properties and all Public Schools may ‘ASSIGN’ the EPAct Tax Deduction to the architects, engineer, or lighting designer involved in the renovation or lighting retrofit.
EPAct for LEDs - Tax Deduction vs. Tax Credit:
The EPAct Tax incentive is a 179d EPAct Tax Deduction not an EPAct Tax Credit. A Building Owner may deduct $0.30 to $0.60 / Sq. Ft. The level of the deduction within the range is based on reducing the electricity cost of the lighting against ASHRAE 90.1-2001 baseline Watts per Sq. Ft. by property type.
Note: Property types like Parking Garages use less wattage per Sq. Ft. so the $.60 EPAct Tax Deduction offers a higher Percentage Discount given that the LEDs are covering more lighting surface. Property owners may elect to choose support services to help manage the paperwork and provide the required third -party verifications.
Source: High Brightness LED Reports from the October 2010 Strategies In Light International Conference. CAGR = Compounded Annual Growth Rate. Building Illumination is projected to grow faster than the General Lighting Market.
Source: High Brightness LED Reports from the October 2010 Strategies In Light International Conference. Building Illumination (Red) in the graph is projected to grow faster than any other sector
Note: These Investment Forecasts are based on $0.12 per kWh, raw energy reduction, & do no factor estimated 3% annual increase in electricity costs or any government or utility incentives. They also factor re-investment of fluorescent options, based on a 50% reduction in price over lifetime. .
These Investment Forecasts are based on $0.12 per kWh, raw energy reduction, & do no factor estimated 3% annual increase in electricity costs or any incentives.
EPAct for LEDs - Assigning EPAct:
Since government entities are tax exempt, they cannot use the EPAct 179D deduction, but hey can assign the deduction to an outside firm by signing an allocation letter acknowledging the firm as the primary designer or provider. As a means to incentivize a struggling construction industry to design and build more energy-efficient and sustainable properties, this assignment came about in 2008. Eligible firms are typically architects, engineer, lighting designers, or contractors involved in the renovation or lighting retrofit.
EPAct for LEDs – Fair Play:
Given the complexity of the EPAct process, firms have met some resistance when requesting an ‘Assignment’ signature. To streamline the process and help reduce friction, it is helpful to share with the government organization point person a breakdown of how the incentives work. Sharing in the incentive with the government entity is a very fine line. Some firms may offer to make a charitable contribution to the government entity or reduce their fee on a future project, but this is not necessary under the EPAct 179d Tax Deduction program. Government entities should not under any circumstances request a kick-back for an incentive that was intended for the outside firm. Please note that the government entity does not bear the responsibility to grant permission for an outside firm to use this deduction but only to acknowledge them as the primary provider of the relevant lighting design or engineering.
EPACT for LEDs – Financial Example
Retrofit Tube or Fixture cost of LEDs = $80,000
Retrofit Installation cost of LEDs = $20,000
Total Retrofit Cost = $100,000
Total LED Retrofit Sq. Ft. = 50,000
EPAct $.60 / Sq. Ft. = $30,000
Building Owner’s Tax Rate = 35%
NET Cash Value of the EPAct Deduction = $10,050.
Percentage Discount off of Total Retrofit Cost = Approx 10%
COMMERCIAL TREND: Lighting Efficiency Patterns
Only 20% of existing commercial buildings feature some degree of upgraded lighting technology, according to the DOE, while 80% continue to operate lighting systems installed before 1986. Property owners and operators site the initial cost of changing out older lighting systems and replacing them newer ones as the reason for delaying the lighting retrofits. Energy-efficient lighting typically costs more to purchase up front than traditional systems, and in some cases a retrofit may require skilled labor for changing out whole fixtures vs. a tube for tube retrofit with linear.
EPAct's Energy Efficient Commercial Buildings Tax Deduction was created to enhance the financial attractiveness of investment in the most energy-efficient lighting and other building technologies.
LED TREND Report: 8.25.12
Published on GREENandSAVE News referencing Independence LED Lighting: Source Article
Top LED TV and LED Tube Manufacturers offer Customers and LED Distributors new opportunities.
Two of the fastest growing trends in the Light Emitting Diode (LED) Market are the LED TVs for the consumer sector and LED Tubes for the commercial sector.
In each case, the LED manufacturers have certain opportunities as well challenges that their distributors and resellers face in bringing the LED Tubes and LED TVs to the end users. The opportunities center on ENERGY SAVINGS and the excitement over the “New” technology. The challenges center on the higher cost and assessing the Return on Investment (ROI). While LED TVs can save homeowners money over the LCD TVs, the savings is minute compared to the savings a business owner can yield by retrofitting with LED tubes over the fluorescent incumbents.
In an economy struggling to recover there are also jobs for Distributors and new business opportunities. Job creation is the bonus ripple effect to the new “Energy Smart” LED technology for both LED TVs and LED Tubes. As an example, see this breakdown of the surprisingly high number of employment variations generated with LED manufacturing: Job Creation through U.S. LED Manufacturing
Highlights on the LED Tube Market:
Points for Business Owners looking to reduce operating costs with LED Tubes:
LED Tubes provide an opportunity to reduce electricity costs by 50% or more over traditional T12 and T8 fluorescent tubes. All LED tubes are not created equal, and in most cases the overseas LED manufacturers produce LED tubes with internal drivers. The internal driver creates a significant risk of failure and cost burden on the facility owner or operator, because when it fails the whole LED tube fails and needs to be replaced. An LED tube with an internal driver is like a car with a started that you could not replace without sending the whole car to the scrap yard. Buyers beware!
Here is a Top 10 check list for high performance LED tubes:
- External Driver
- Deep Fin Extruded Aluminum Heat Sink
- Surface Mounted Diodes
- Aluminum Circuit Boards
- Modular System for production efficiency
- Different Wattage Level Choices
- Consistency in the color of the Diodes
- Smart Control Enabled Tubes
- Five Year Warranty
- A key to Quality Control: Made in America
Sample Performance: U.S. LED Manufacturer: Independence LED
Points for Distributors looking to get into the LED Tube market:
For LED Tube sales, the major lighting companies, like GE, Sylvania, and Philips have tried desperately to hold onto their market share and margins on fluorescent tubes. This is not unlike the major automotive companies like GM desperately holding on to combustion engine technology. So, other companies have stepped up the challenge and they have mostly been from China. A U.S.LED Manufacturer “saw the light” with the window of opportunity several years ago and now offers both LED Tubes and Multi-Tube LED Fixtures. The example of Independence LED Lighting referenced above also offers, Reseller Support Services. Quality LED Tubes are key but the support services and $0 down financing are an excellent counterpoint that many manufacturers do not offer. Given that LED Tubes are not created equal the same Top 10 list of criteria for business owners looking into buying LED tubes applies for a Distributor looking to represent LED tubes to their clients.
Value Added Reseller opportunities exist for LED Tubes as they do for LED TVs. For LED Tubes, examples of added value may include a lighting audit of the prospective retrofit facility, a savings report that illustrates the Return on Investment, a comparison against other options such as the new generation of T5 fluorescent tubes, or reviews of financing opportunities with cash-flow positive results. LED Tube Distributors may find that the best sales opportunities exist in long run time areas with 24/7 light such as exit stairs, hallways of hotels, hospitals, and dorms, three shift industrial facilities like warehouses, distribution centers and factories, plus parking garages. Overall the higher the kWh, the higher the ROI on the LED Tubes. Here is a link to a page with the U.S. State-by-State cost of electricity as well as the kWh cost in countries across the industrialized world. See: kWh Costs and Maps. As the global population increases and drives increasing demand for energy, there is a growing demand for quality LED Tubes and the accompanying demand for LED tube distributors.
Highlights on the LED TV Market:
Points for Home Owners looking to save money and improve their viewing experience with LED Flat TVs:
An LED TV uses less power, provides a brighter display with better contrast, a thinner panel, and lesser heat dissipation than a conventional LCD TV. This is because an LED TV uses light-emitting diodes for backlighting versus CCFLs used by conventional LCD TVs. The display of an LED TV is not an LED display, so a more technically correct name for it would be "LED-backlit LCD television".
There are 3 types of LED TVs based on their backlighting methods:
A) Edge-LEDs: (most common) positioned around rims of the screen & use special diffusion panels to spread the light evenly behind the screen.
B) Dynamic RGB LEDs: This backlighting technique allows specific areas on the screen to be dimmed.
C) Full-array LEDs where LEDs are arranged behind the screen but are incapable of dimming or brightening individually.
Points for Distributors looking to get into the LED TV market:
For LED TV sales, the big box stores like Best Buy and WalMart dominate the market along with the massive number of internet sites offering LED TV discounts, LED TV wholesale pricing, and LED TV sales specials. So the traditional distributors have largely been “boxed out”, but there is still room for the Value Added Resellers. In the LED TV market, the Value Added Resellers are like the Audio Visual centers that include the surround sound systems, home theaters, and custom installations. Given the advanced features on the new LED TVs such as specialized programming, many home owners look for support. Here is an example of a service provider that adds “all around” value: All Around Technology
Successful LED TV Value Added Resellers can guide the home owners with key questions and insights: Where do you want to watch your LED television? You might opt for movies in the family room, cooking shows in the kitchen, sports in the billiards room or late night talk shows in the bedroom. Every television location is unique in its purpose and design. LED TV resellers can help optimize viewing enjoyment.
All Around Viewing
The increasingly diverse and complex technology of LED television can be intimidating for many homeowners. What are the benefits of rear-screen, plasma, liquid crystal display, and light-emitting diode – LED TV? What picture resolution do you need? What is the appropriate LED TV screen size for the room and what is best value when it comes to cost?
Delivering the Advantages of LED TV Flat-Panel and Surround Sound
The latest generation of LED flat-panel television has the capability of providing a dramatic viewing experience. LED TV Value Added Resellers often have in house experts that work with architects and decorators to ensure that every LED television will be ideally located and tastefully implemented. Don’t forget about surround sound for the LED TV system. These LED TV systems are an excellent option for many rooms. Without surround sound, you may find yourself missing subtle elements of dialogue or Get in on the action with the latest in LED TV digital surround sound.