Lighting Evolution and The Falling Costs of LED Lights

Jun 6th 2018

LED lighting evolution

Did you know that prehistoric people needed to chop wood 60 hours a week just to get enough wood to produce the amount of light equivalent to a 100Watt bulb in one hour? This was researched by William Nordhaus, a Yale economics professor who conducted a series of experiments to compare the cost of lighting in different eras throughout history.

Nordhaus’ Experiment

For the sake of the experiment, Nordhaus used an open fire Neolithic lamp, a Babylonian-style sesame oil lamp, a candle, town gas, a kerosene lamp, an electric lamp, and a modern light bulb. The cost of lighting in the experiment was expressed in lumen-hours. A lumen-hour is the quantity of light (in lumens) radiated for a period of 1 hour. Nordhaus’ calculations showed a drastic decrease in the cost per 1,000 lumen-hours. The first Neolithic lamp in today’s terms would cost around 40 cents per lumen-hour. For comparison:

  • The first electric lamp created by Edison would have a cost of 9 cents per lumen hour,
  • The modern CFL light bulbs would have a cost of 0.124 cents per lumen hour and
  • The modern LED light bulbs would have a cost of 0,0008 cents per lumen hour!

Where did these numbers come from? Let’s take a look:

We mentioned that prehistoric people needed to chop wood 60 hours a week just to produce one hour of light. With the gas lamps in the late 19th century, you could get that amount of light for just over 3 hours of work. But the incandescent light bulbs, and now LED light bulbs changed everything. The former one could produce an hour of light with just 36 minutes of work, while the latter one with just under a second! However, you probably know that in the first years when LED bulbs were introduced to the market, they were considered unfeasible. This was mainly because of their high costs. The LED phenomenon was discovered only two decades after the first incandescent light bulb but LED lights still took much longer to conquer the market.

How did LED lights become so affordable?

Incandescent lights became popular very quickly despite the fact that they were generally inefficient. As a matter of fact, the main reason why that was the case lies in their inefficiency. They were inefficient but they were also very cheap to produce because companies quickly developed the ability to mass-produce them with the help of machines.

This was the main reason why the development of LED lighting technology had such a slow path. It wasn’t until 1962 that the first visible-spectrum LED in the form of red diodes was developed. Yellow and green diodes followed and the blue diode of the 1990s eventually led to the discovery of white LEDs. This is a path that most disruptive technologies follow. The first attempts to create a product are always ridiculously expensive and economically inefficient. Additionally, they’re made in small batches and don’t enjoy the advantages of economies of scale. That’s why the first Ford cost more than the average annual salary in the US (at the time) and the first commercial cell phone has $4,000 USD back in the 1980s.

But as production volumes increase, the per-unit cost decreases, making the product more affordable and thus encouraging a higher demand. The increased demand brings more competitors at the market, which leads to an even higher price decrease, and so on.

The same pattern followed the growth of LED lights. The price of LED bulbs has dropped for more than 85 percent in the last 10 years. Subsequently, the sales tripled in 2016, when LED lights reached a market share of 40% in the US and 31% in Europe. But that doesn’t mean that LED lights have reached their ceiling. LED lights are the future and it’s only a matter of time until they become as commonplace as oil lamps, candles, and incandescent bulbs once were. 

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