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Government Subsidized ‘Affordable’ Green Bulb Coming Soon to a Store Near You

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By Doug Powers  •  March 9, 2012 12:26 PM

**Written by Doug Powers

Last year, the Department of Energy launched the “L Prize” — a $10 million award to any manufacturer that could come up with a light bulb that was affordable to consumers, but also met certain “green” standards. Philips won the prize. Flashback to last summer:

Philips has just won the DOE’s $10 million L Prize Competition for the creation of a decidedly non-curlicue 60W equivalent LED lighting solution. The company was named the first winner in the 60W replacement bulb category at a Washington DC event, yesterday. It’s taken three years to find a winner that could meet the high standards set forth by the DOE, specifically “ensuring that performance, quality, lifetime, cost, and availability meet expectations for widespread adoption and mass manufacturing.” Requirements further stipulated that the 60W incandescent killer use less than 10 watts of power, and provide energy savings of 83 percent. If Americans replaced all of their 60W incandescents with Philips’ little winner, the DOE estimates savings of $3.9 billion in a single year. The bulb is expected to hit shelves as soon as early 2012.

Wow, that’s quite a savings. Thank goodness the government got involved to make things cheaper.

As the above story promised, the bulb that won the $10 million “green and affordable” DoE prize is becoming available. So just how affordable will the new bulb be?

Energy Secretary Steven Chu said the prize would spur industry to offer the costly bulbs, known as LEDs, at prices “affordable for American families.” There was also a “Buy America” component. Portions of the bulb would have to be made in the United States.

Now the winning bulb is on the market.

The price is $50.

Retailers said the bulb, made by Philips, is likely to be too pricey to have broad appeal. Similar LED bulbs are less than half the cost.
[…]
How the expensive bulb won a $10 million government prize meant to foster energy-efficient affordability is one of the curiosities that arise as the country undergoes a massive, mandated turnover from traditional incandescent lamps to more energy-efficient ones.

The DoE estimated a savings of $3.9 billion in a single year? For the sake of argument, let’s assume all 114 million (or so) in the US households have eight “old school” bulbs in them. If we were to replace them all with the L Prize winner at $50 a bulb, that’s $400 per household. The cost to all households would be almost $46 billion just to buy the new bulbs. And we might as well add to the expense the $10 million in prize money taxpayers are on the hook for in order to pay a company to create light bulbs people either can’t afford or won’t want.

To paraphrase Obi Wan, this is not the savings we’re looking for.

Update: Email from reader Erik S:

I noticed the”savings” mentioned on the topic of the new “green” LED bulbs and I ran afew numbers to add to your computations.

If the overall savings per year was $3.9 Billion for approximately 114 million households, that’s a whopping $34.21 per year, per household. Given your assumption of 8 old-school bulbs, it would still take about 12 years to recoup the initial investment in the bulbs!

Also this analysis from reader Tom:

All the calculations of energy savings are based on comparison to incandescent bulbs. However, the compact fluorescent bulbs use 13 watts to give the equivalent lumens of a 60 watt incandescent. At Amazon.com, 8×13 watt CFLs for $9.20, so about $48.85 more to save 3 watts, not 50 watts. Instead of 12 years to break even, roughly 2 centuries. Thank you, Steven Chu.

**Written by Doug Powers

Twitter @ThePowersThatBe

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