At Nela Park in East Cleveland, General Electric Co. is taking on the
big job of replacing the incandescent light bulbs it helped make
ubiquitous with new, more efficient — and more expensive — LED lighting.
“We've got plants all over the world making incandescent bulbs,
and they're being shut down every year,” said Michael Petras, CEO of GE
Lighting, which is based at Nela Park.
Mr. Petras' challenge is
to convert GE's $2.5 billion lighting business from technology that was
developed at the start of the last century over to new technology still
being perfected in the 21st century.
But he's going to get a
little help. Governments the world over are turning against
incandescents, with some high-wattage bulbs already outlawed in Europe
and Australia and the United States set to do away with 100-watt
incandescents in 2012.
Job No. 1 for Mr. Petras and GE might be
to educate the public, not only about the huge energy savings LED lights
offer, but about the inevitability of change. For instance, GE's
research shows that nearly three-quarters of Americans are unaware that
100-watt incandescent bulbs no longer will be available after 2012,
Mr. Petras said.
Then, GE must convince customers a $20, $30 or
even a $40 LED light is a good value when those customers are used to
buying incandescent bulbs for no more than about $4 for a four-bulb
pack. The initial price tags no doubt will surprise many consumers, but
the bulbs provide energy savings of up to 80% over traditional bulbs,
and they last many times longer. For that reason, Mr. Petras said, it's
important for GE to be a dominant player in the new market from the very
beginning.
“These bulbs last so long (that) in a lot of cases
the fixture will need to be replaced before the bulb,” Mr. Petras said.
“So it's important to get that first sale, because the light might
outlast the socket.”
Business lights the way
Commercial and institutional buyers already are becoming convinced. Mr.
Petras said consumers will come on board later, because they won't reap
the huge cost savings that a Walmart store or some other big facility
gets from changing bulbs.
To that end, GE is going after the
commercial and institutional markets with LED fixtures unheard of just a
few years ago. Those new products include LED street and parking lot
lights that use only a fraction of the electricity of metal halide
bulbs, last longer and emit more controllable light patterns.
While
a metal halide streetlight might last 15,000 hours, an LED version
lasts about 50,000 hours, Mr. Petras said. That saves users additional
money on maintaining lights that might be 30 or 40 feet in the air.
Businesses
are easy to convince because nearly all of them are looking for ways
to save on energy, and lighting is a way to save energy fast, said Bob
Taussig of Lighting Services in Twinsburg, which sells high-tech T5
florescent lighting to companies looking to replace incandescents or
metal halides. Tax credits assigned to businesses that increase their
energy efficiency, combined with lower electric bills, make new lighting
systems an easy sell, Mr. Taussig said.
“Between the tax
reduction and the 50% energy savings, people are buying this,” he said.
“Our business is better than it's ever been.”
Those same
business factors are helping GE sell its new lights commercially. But
for Mr. Petras truly to succeed, he needs consumers, not just
businesses, to spend more on their electric lights. And he needs them to
choose GE lights over the cheaper imports that Mr. Petras expects to
compete with him in the United States and abroad. GE plans to combat
them producing bulbs that are more efficient and last longer, Mr.
Petras said
Perennial front-runner
It will be a tough job, but many think GE will succeed. Among them is
Ron Runkles, industry director for electric lighting at the National
Electrical Manufacturers Association in Rosslyn, Va.
Mr.
Runkles predicts we're only seeing the tip of the iceberg in terms of
new lighting products — and LEDs still might be years from fully
overtaking incandescents. But incandescents definitely are on the way
out, and GE is bound to continue to be an industry leader, in LEDs or
any other type of lighting to come, Mr. Runkles predicts.
“There's
a lot that can be done, and GE is out on the forefront,” he said. “They
say, "Let's grow the entire market and we'll (various lighting
companies) fight it out amongst each other,' but they're in front.”
As
for consumers balking at $30 light bulbs, Mr. Runkles said they might
at first. But that too will pass, he predicts.
“People thought
the same thing about the first incandescents,” he said. “They said,
"This is expensive, all this wiring and expense for a couple of
incandescent bulbs.'” Eventually, they saw value in what were then
expensive light bulbs, and they will again, he said.
Article from: Crain's Cleveland Business |