Philips targets office market with new LED light

AMSTERDAM (AP) -- Almost anybody who works in an office has grown accustomed to the glow of fluorescent tubes providing light from overhead. Now Royal Philips NV says it has developed a working prototype of a lamp it says will confine the fluorescent bulb to the recycling bin of history.

The Dutch company said Thursday it has developed an LED light that will be interchangeable with the best fluorescents currently on the market. Its claim that the new light will save energy and money and cut pollution commands attention as Philips is the world's largest maker of lights by sales globally. Philips lighting sales in 2012 amounted to 8.4 billion euros ($11 billion) in a total global market that consulting firm McKinsey puts at 70 billion euros.

In an interview with the Associated Press ahead of the unveiling of the new light, a top executive said the prototype is headed to mass production and will hit the market in 2015. He said that in 10 years, LEDs will replace at least half of fluorescent bulbs, which have dominated workplace lighting since shortly after World War II.

"This is a major step forward for the lighting world," said Rene Van Schooten, CEO of Philips' light sources division. "It will bring an enormous savings in energy."

Experts outside the Dutch company have long expected LEDs to eclipse fluorescents. However, if Philips' bulbs make it to market as advertised, that would be somewhat ahead of expectations.

In recent years, energy-efficient lights made by Philips, Siemens AG, General Electric Co, Cree Inc. and others using LEDs, or light-emitting diodes, have made significant inroads in the home market, replacing many incandescent and halogen bulbs.

But because fluorescent bulbs are highly efficient, LED lights have so far achieved only a small foothold in business and industry. LEDs are competitive in heavy use settings where their longer lifespans and a minor energy edge pay off.

Philips says its new lamp will change that. The technical milestone the company claims to have achieved is the ability to produce 200 lumens of light per watt of energy.

According to Mark Hand, a technology expert at Philips competitor Acuity Brands Inc., that's about twice the output per watt of the best fluorescent tubes currently on the market; he estimated the best LED lamps may get up to 120 lumens per watt.

Although Cree already advertises a lamp it says reaches 200 lumens per watt under some circumstances, Van Schooten said the Philips lamp is different. It will be first on the market that reaches that level of efficiency and functions across a normal range of temperatures and is capable of consistently producing the same amount of warm white colored light as comparable fluorescent tubes.

Essentially, "if you walk into the room, you don't say, 'what a funny lamp'," Van Schooten said.

U.S. Department of Energy projections published in April 2012 showed the government had expected the industry would only achieve efficiencies of 160 lumens per watt for such lamps by 2015.

The potential impact in terms of energy savings, cost savings, and also pollution reduction are all significant — though toxic materials are used in manufacturing both fluorescents and LEDs.

Lights suck up about 15 percent of all energy produced globally, and fluorescent lights currently make up more than half of the total lighting market.

In the United States alone, fluorescent lights consume about 200 terawatts annually, according to Philips estimates.

Cutting that in half would save $12 billion in electricity costs and lessen carbon dioxide emissions by 60 million metric tons per year.

Dr. Eugenia Ellis, a professor of engineering and architecture at Drexel University who works with LED installations, said an efficiency improvement at the level Philips forecasts would be impressive: cost savings from using LEDs can already be significant. She gave the example of a hospital recently saving $75,000 a year on energy bills by switching.

Ellis added that Philips is seen as a dominant force in LEDs, and is known for forcefully protecting its intellectual property.

Philips' Van Schooten said that initially, sales prices of its LED tubes will still be higher than fluorescent lights. But taking into account electricity costs, the increased efficiency in 2015 will make them cheaper to own within a year, as opposed to three years at present.

And further manufacturing savings and efficiency improvements to LED lights will come with each generation of technology.

"The case is rather compelling, but of course it takes some time to replace existing infrastructure," Van Schooten said.

Acuity Brands' Hand said a 10 year view may be pessimistic. Although LEDs currently make up only a small percentage of his company's $1.9 billion in annual sales, he expects that to change quickly.

"LEDs will take over, definitely within 10 years," he said. He predicted that LEDs would make up more than 50 percent of new sales "certainly within 5 years, maybe within three."

Ironically, Philips will both lose and gain from the change — it is not only the largest maker of LEDs, but also of fluorescent tubes.

"Clearly we'll have to phase that out," Van Schooten said. But "we knew this moment was coming for some time."