LED manufacturers think it’s about time to change the purchasing conversation around LED pricing. This means looking at the total bill-of-materials (BOM) for the LED lighting system instead of just the cost of the LED.
In a recent conversation with Paul Scheidt, leader of product marketing for LED components at Cree Inc., he explained that while LEDs used to be the most expensive part of the lighting system that is not the case today. With LED manufacturers doing a good job of reducing costs and improving the performance of LEDs over the past three to four years, LEDs are no longer the most expensive component in a lighting system.
“There is a lot of movement in the industry towards commoditization where everyone wants to make the same LED product and just argue over price,” said Scheidt. But LEDs aren’t impacting system costs as much as other parts in the system, including the heat sinks, optics, and printed circuit boards (PCBs), he added.
“One of the biggest errors is the notion that if you get the cheapest LED you’re going to make the cheapest system,” said Scheidt. “If you look at the stack-up of what’s involved now – most people are paying more for the heat sinks than they are for the LEDs. Or they are paying more for the PCB. When you start looking at those things then you start thinking that maybe you shouldn’t be paying that much for the heat sinks or PCBs.”
“It is mind blowing to the industry today to say if you want to reduce the system cost then let’s reduce the cost of the things that don’t light up,” said Scheidt.
One of the key points he makes is that as LED performance improves – putting more light into a smaller package and increasing reliability – the size of other components in a lighting system, including the chassis, PCB, optics and driver all can shrink in size as well, which further reduces cost. It also reduces PCB placement costs by requiring fewer LEDs per application.
Higher light output in a smaller package and reliability are how you address cost issues around thermal, mechanical, and optical elements, said Scheidt. “If you apply all these benefits you can achieve up to a 40 percent reduction in system cost.”
An example showcasing these principles is Cree’s new SC5 Technology Platform that doubles the light output of its new generation of LEDs, the Extreme High Power (XHP) LEDs. Cree touts that these LEDs can reduce system costs by up to 40 percent in most lighting applications by doubling the lumens out of a single LED and achieving longer lifetimes even at higher operating temperatures.
By improving the reliability of its LED, it directly impacts the heat sink in the lighting system. “The argument we get all the time is that the mid-power LEDs are fine if we keep them cool. That is the problem right there. If you have to keep them cool, it costs you money,” said Scheidt.
“Anybody in the electronics industry knows if you can run a device hotter you can use less heat sink. It’s just a simple design principle,” said Scheidt. “The tradeoff you’re making with heat is that you can potentially reduce the lifetime of the LED, but we’ve improved the reliability such that we can deliver a lot of lifetime even at higher temperatures so the constraint is not as constraining as it was previously.”
With the XHP LEDs, Cree has been able to improve the lifetime of the LEDs by almost double – from 30,000 hours to 50,000 hours - under the same conditions versus previous generation LEDs with the same amount of light output.
“LEDs are no longer the most expensive portion of an LED lighting system, but they fundamentally determine the overall system performance and cost,” said Dave Emerson, vice president and general manager for Cree LEDs, in a press release. “While other LED manufacturers only promise incrementally lower LED cost, our new Extreme High Power (XHP) LEDs leveraging the SC5 Technology Platform directly address the increased burden that thermal, mechanical and optical elements now place on total system cost.
The first LEDs based on the SC5 Technology Platform are the XLamp XHP50 and XHP70 LEDs. Cree said: “XHP LEDs allow lighting manufacturers to drastically reduce the size and cost of their lighting system design by using fewer, more reliable LEDs to achieve the same brightness.”
This translates into lighting designs that need fewer optics, a smaller PCB, a smaller driver, and a smaller enclosure. In addition, since the XHP LEDs can run hotter and still achieve longer lifetimes, lighting manufacturers can reduce the size of the heat sinks.
“We can talk about performance of the LEDs themselves but the more important thing is the implications for what you can do with the system around them with this level of performance and with this level of reliability,” said Scheidt.
There is some resistance around discussing these issues because LED buyers and lighting system designers have learned certain design principles that work and they don’t want to change. “We try to explain to people that it really is okay to run the LEDs hotter but there are materials people are using that aren’t qualified to run hotter so not only do they have to change the LED, they may have to change the optic material, heat sink or PCB material,” said Scheidt.
The XHP LEDs also enable other cost reductions at the system level not possible with other LED solutions, said Cree. An example cited is roadway and outdoor area lighting where XHP LEDs can produce a radically smaller and lighter luminaire that requires a less expensive pole, in addition to the luminaire cost savings. This also can be applied to other lighting applications, including track, stadium and high bay. (Register here if you want to sample the XHP LEDs.)
Ultimately, the adoption of LED lighting translates into energy savings. One of the newest examples from Cree will be on display at this Sunday’s Super Bowl game. The University of Phoenix Stadium installed 312 Ephesus Lighting stadium fixtures featuring 44,928 Cree XLamp MK-R LEDs. The new system uses 310,000 watts of energy as compared to the 1.24 million watts needed to power the previous metal halide light system, delivering a 75 percent reduction in energy consumption, according to Ephesus Lighting. In addition, each Ephesus LED light provides nearly double the illumination of traditional metal halide lights.
Other benefits of LED lighting include a quick turn-on time. “Most stadiums rely on high-intensity gas discharge fixtures for the main lighting that take time to power up to full brightness—a half hour is common. LED lights, in addition to being efficient, can be turned on and off with the flick of a switch as LEDs have more control and metal halide fixtures typically require a minimum 20-minute warm-up period,” said Ephesus.
Whether you’re watching the game between the New England Patriots and the Seattle Seahawks at the stadium or in your living room, the lighting experience is expected to be better thanks to the brighter and more uniform LED lighting. Go Patriots!