In part two of our two-part series, Neonlite director Fred Bass argues against the industry’s case to keep energy-guzzling halogens alive, calling such a move ‘nonsensical’.
Sometime in the next few weeks, the European Commission is expected to vote on whether to delay a ban on halogen lamps. Halogens are the last real bastion of incandescent technology. They are a thriving holdover of conventional filament burning bulbs – superior in many ways to standard filament lamps because they are treated with a halogen gas, improving their lifetime and efficiency.
Although the industry has long promoted them for their so-called ‘eco’ benefits, they are only slightly more efficient than the conventional filament bulbs that the EC has already widely banished. They are terribly inefficient compared to modern LED (light-emitting diode) and CFL (compact fluorescent) bulbs. Thus, halogens are carbon culprits. That’s why the EC in 2009 scheduled them for a September 2016 retirement.
The conventional lighting industry, represented by the Brussels-based trade body LightingEurope, is now campaigning for a stay of halogen’s execution. It wants to push the halogen ban out by another four years – to 2020, nearly six years from now. It seems stuck between a rock and hard place: While it tries itself to steer consumers toward an LED future, it claims that quality, performance and price of LEDs will not be ready to meet mass consumer demand until 2020. Europeans today are buying more halogens than anything – more even than CFLs it notes, warning of a bulb shortage if the ban takes hold. As good as LEDs are, they just aren’t ready yet to provide the same quality of light as halogen at an affordable price, nor will they be by 2016, LightingEurope claims. It notes that LED lamps are still too different from conventional lamps in appearance, price and quality, and that this difference is confusing consumers.
‘Nonsense,’ say LightingEurope’s critics. LEDs have arrived, are more than ready for prime time, and the sooner the better from an environmental perspective. The conventional industry has already had half a dozen years to prepare for the ban, which, ironically, it lobbied for itself in the first place. If the big traditional lighting companies like Philips, Osram and GE can’t meet LED demand, then the newfangled companies born in the CFL and LED era can – companies such as Aurora, Neonlite, TCP, LIFX, Opple, Cree, Acuity – they note. Some suggest that the big companies are simply trying to hold onto their old ‘replacement bulb’ business model for as long as possible while they make the difficult transition to LEDs, which vendors say last for 20 years.
Lux recently spoke at length with two leading voices on opposite sides of the issue: Diederik de Stoppelaar, secretary general of LightingEurope, and Fred Bass, a director of Hong Kong-based Neonlite and managing director of its UK-based Neonlite International group, which includes the Megaman brand of LED lamps. Neonlite has no incandescent legacy. It started life some 20 years ago as a CFL company, and today about 90 percent of its business is in LEDs. Bass firmly opposes any delay to the halogen ban.
Bass (pictured, right) and de Stoppelaar are not completely at odds. They agree that the industry must weed out inferior LED products that are tarnishing the technology’s reputation. They also implore the industry to clear up the confusion surrounding the relative merits of the different lamp technologies – confusion that the industry itself fosters through loose, or at least non-uniform, performance claims via packaging and merchandising.
But they couldn’t be further apart on the subject of the ban. In a two-part series, we bring you an edited version of our questions and answers with de Stoppelaar and Bass. Yesterday, de Stoppelaar made the case for delaying the ban until 2020. Today, Bass lays out why the EC should stick to its guns and just get on with the ban as planned:
Lux: The halogen ban is set for 2016, the EC is voting on pushing it back to 2018, and LightingEurope says that’s not even long enough of an extension. They want 2020. What’s your take on all of this?
Bass: I’m very much on the side of no delay at all. You’ve got to understand Megaman’s position. We’ve been making low energy lamps since we started 20 years back. We have no legacy in high energy lamps. We just have low energy. (Almost) all of our business is in LED. So to be fair my perspective is just go for the ban because obviously it suits my business. But taking that apart, if you just look a the bigger picture, the environmental picture and all athe rest of it, to me it makes no sense to delay when LED technology has moved at such a pace compared to all the market predictions. The price is half of what it was expected to be at this stage and it’s going to keep going at that pace. To consider pushing out the ban, it’s just nonsensical.
It would be less credible if they moved the dates. It was such a landmark decision. Then to sort of say ‘oh well the industry doesn’t really like it, we’re going to push the dates out,’ then I think the directives will lose their credibility. So you have the credibility issue, the energy issue, and you have technology that is moving at a much faster pace than was ever predicted. And you have LightingEurope saying we don’t want it to change until 2020. It’s very very strange to me. The consumer is only going to gain by switching to the new technology.
Is there any argument at all for delaying?
If there is a need to change a date you shouldn’t make big changes like 4 years, you should make modest changes, 1 year perhaps. I’m not in favour of any movement at all. I can accept that in some parts of Eastern Europe maybe, the standard of living, market pricing may make the lamps less affordable. I also accept that some of the lamp technology hasn’t got a direct LED replacement, so maybe there could be a case to say that certain types of lamps can be delayed but the vast majority of the common GLS type, A-lamp type products are available, they’re at the right price and to a standard which is good enough for the domestic market. It may not be a 50,000-hour lamp, but 15,000 hours is already good enough for 10 years use or whatever. I can’t understand why you’d push it back.
But then, as you said, you don’t have the legacy business to worry about, the way many of LightingEurope’s members do.
They have a different perspective. They’re not like Megaman without the legacy in halogen. These are big companies with lots of production in these areas. And clearly there must be a conflict of interest when they offer a view on the situation. On the one hand they want to see progress and environmental improvement and on the other hand they’ve got a vested interest in these older technologies as well. It’s not easy for them to manage the situation. But I can’t agree with their position.
Yes, it’s almost bizarre. The industry has been telling the world to move to LEDs for several years, and now their message is that LEDs aren’t ready.
It doesn’t ring true. LightingEurope was taking a a leading role in establishing legislation with Brussels getting the directive in place. They had lots of input. And for them to turn around now and say ‘we want to push it out four years,’ even though we see all the market indications moving faster than we anticipated, I have a problem with that. I suppose in principle we can leave the ban in place for the vast majority of lamps, and maybe there’s some compromise on some smaller issues where the technology isn’t quite ready on certain types or whatever. But I don’t see any need to change it on the mass market.
Are they just holding on to the vestiges of the good old business model of selling replacement lamps, and trying to extend that for as long as possible until they figure out how to make money from long lasting LEDs?
There’s probably something in that. There’s a massive price range in the market. That means margins on LEDs are now very very slim. And there’s an awful lot of new players in the market in LED. It’s fragmenting. If you look at that dynamic for the big players, their predictions on profit on LED will be quite different from what they were a few years ago. So in as much as we see a huge drop in the price of LEDs, that will clearly hit the potential profits of big manufacturers clearly. And there’s a lot of new players on the market, so I think market share of the large companies is an issue. If a huge volume of LEDs is required in two years time, I think the market can supply it, but maybe it’s not them.
So there’s not really an overall manufacturing capacity issue that will lead to the bulb shortage that LightingEurope is warning about?
From a Megaman perspective it’s an opportunity. Why isn’t it an opportunity for them as well? It’s odd. There’s going to be a very different model going forward. Five years down the line, whatever state the ban’s in, everybody will be using the longer lasting LED technology and therefore there won’t be the same replacement market. The dynamics of the whole lighting industry are changing. Everybody accepts that and we’re planning for it. We all understand that the traditional incandescent retrofit business is finished. Whether it finishes in 2016 or finishes in 2020, it’s finished.
A lot of LightingEurope jobs are in Europe. Closing down halogen lines could mean costly and politically difficult layoffs.
True. And there again there’s another conflict of interest. From a European perspective one tends to be very mindful of any threat to the loss of European jobs. That will be another factor in their argument. I still don’t think it’s sufficient to delay.
Although your company doesn’t have the legacy burden, it’s a tough business for any company new or old. Nobody’s future is guaranteed.
No. There are lots of new players in the market. It’s a very volatile situation. I’ve been in the business a long time. It’s the most exciting time I’ve ever had in the industry. When I started in the industry, we were using technologies that were 100 years old. Now nothing’s for sure.
So where will the money come from in the future?
It will be a combination of things. The retrofits will be very strong for I guess the next five years. But there will be an increasing amount of integrated fixtures business. The estimates are that in new builds, in five years time, half of the fittings will be LED. So we have to be in integrated fixtures as well as retrofits. And we have to be in other areas like smart controls. We don’t know how big that will be but we think it’s a very significant development; it adds considerably to energy savings. The Megaman philosophy is not to get into complex building management system, but to find solutions that can be fitted almost like a retrofit. Wireless systems and so on mean we have a ready market without rewiring a building.
What about the problem that LightingEurope secretary general Diederik de Stoppelaar mentioned – that there are non-brand names selling substandard lights at very low prices, tarnishing the reputation of the LED industry?
That’s one area where actually I agree with him. There’s a lot of new players. Market surveillance in Europe is a key issue that we’ve been going on about for many years – LightingEurope and ourselves. So I would agree, but I don’t see that that has anything to do with the delay in the ban. There is an issue with keeping out the rubbish but that is not I my mind any excuse for a delay. It’s nonsensical: ‘We’ve got rubbish in the market, we must delay the ban.’ What’s that got to do with anything? It’s a separate issue.
I think you also might agree with LightingEurope’s point that the industry needs clear, consistent marketing and merchandising in which the consumer can understand and trust the information on packaging, signage and so forth.
(Yes). I walk into a retail shop and I’m totally confused by the whole display in the lighting area. I’m a lighting guy for 35 years and I’m totally confused by the way it’s presented, the way it’s sold to the public. There’s an environmental organisation in Brussels, ECOS (European Environmental Citizens’ Organisation for Standardisation) where one guy, Edouard Toulouse is really big on this. He wants to change the whole way this thing is sold to the public. And I’m totally with him. It’s so confusing. Waht does the normal guy do when he walks in the store? What does he buy? It’s impossible. Lamp packaging and display is a mess. The industry knows it. The authorities know it. But it has nothing to do with whether you should ban the product or not.
More on the halogen storm, from Lux:
- The halogen ban: Why it should not happen
- Lighting industry says LEDs are not ready for mass consumer uptake, blasts anti-halogen report
- Lighting industry group warns of lamp shortage if Europe bans halogens
- European consumers prefer inefficient halogens over energy savers, so group says ban them ASAP