LEDs: Bright Past, Bright Future

Investor Arthur Frentzel offers a very long and detailed assessment of the LED business. The conclusion is that the very good days are ahead for the industry and, by extension, end users who benefit from the technology.

Frentzel’s high level takeaway is that the industry is being driven forward by lower adoption costs, increasingly good performance and “macro policy changes” – positive general rule- and lawmaking – to promote a mass transition to LEDs.

Macro conditions sometimes are overlooked, since they don’t deal directly with LEDs. The Trump administration is expected to usher in reduced banking regulations, lower corporate taxes and increased lending. Overall business costs should recede. The future is promising because the  new frontier of smart buildings has not gotten going in earnest. This area, which is deeply tied to LEDs, is estimated in Frentzel’s piece to be worth $20 billion.

Last summer, Think Progress noted a report by Goldman Sachs that is just as bullish about LEDs:

The accelerated deployment of light-emitting diode (LED) bulbs is on track to save U.S. consumers and businesses $20 billion a year in electricity costs within a decade, which would lower U.S. CO2 emissions by some 100 million metric tons a year! The growing global effort to speed up LED adoption could ultimately cut global energy costs and carbon pollution 5 times as much.

20 Something Finance’s GE Miller says that LEDs have experienced a four-stage evolution in an extremely compressed 10 year timeframe. The first phase was the attraction of early adopters will to pay a premium for the new technology. That was followed by what Miller labels “wise adopters.” In this phase, prices had shrunk far enough that LEDs were a wise investment by savvy shoppers. The third phase was highlighted by more improvements and the idea that it was “foolish not to upgrade.” We are at the beginning of the fourth stage in which LEDs will be the only available lighting source.

The thought is that the good times will continue for LEDs. Research hasn’t stopped. The latest idea is to use perovskites – a substance also being used in solar voltaic fabrication – as a key material. Perovskites, PhysOrg writes, self-assemble and create a more “efficient, stable and durable” product. It also may end up being less expensive, the story says.

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