cfl market profile

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Most who purchase compact fluorescent lamps only install 1 - 5 lamps leaving the rest in the pack. Why would this be? Lack of dimmability, sluggish to achieve full brightness, or concerns about Mercury hazards?

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  • Big RESULTS

    Bigger PoTEnTiaL

    CFL Market Profile | March 2009U.S. Department of Energy

  • TaBle of ConTenTs

    Executive Summary 1

    Shipments and Market Share 2

    Sales Channels 3

    Market Competition and Variety 4

    Media Attention 4

    National Socket Saturation 5

    National Household Saturation 6

    Household Placement 7

    Energy Savings 8

    ENERGY STAR Criteria 9

    Consumer Perception 10

    Energy Efficiency Program Sponsor Activities 10

    CFL Promotions 12

    Strategy for ENERGY STAR CFLs 13

  • exeCuTive summaryThis document presents key market facts that ENERGY STAR partners will find helpful in developing CFL programs. A summary is presented below, with additional details contained within the body of this market profile.

    The market for Cfls* has grown tremendously, with dramatic increases in shipments1 and market share in the past three years. CFL availability, number of varieties, and quality have continued to improve, while prices have continued to fall. With the new ENERGY STAR Criteria V4.0 that took effect December 2, 2008, and upcoming standards on lamp efficiency from the Energy Independence and Security Act of 2007 (EISA 2007), CFLs appear poised to capture even more of the lighting market.

    Despite recent market growth, Cfl household saturation is still low throughout the united states, even in regions with successful and long-standing energy efficiency programs. While the commercial and industrial sectors were early adopters of CFLs, vast potential remains in the residential sector. It contains 90 percent of CFL-appropriate sockets, but has only 11 percent CFL saturation. Thirty percent of households still own no CFLs, and 64 percent of households that own CFLs have five or fewer. Overall, there is still plenty of room for the CFL market to grow.

    Cfls remain by far the quickest, cheapest, and easiest technology that utilities can use to improve energy efficiency and generate energy savings. Compared to other energy saving products, CFLs are inexpensive, and offer competitive energy savings and shorter payback periods, making them an easy way to achieve energy savings. Decreasing sales prices and increasing electricity rates have made CFLs more than eight times more cost effective than in 1990.

    Cfls are a significant, and often primary, source of Demand side management (Dsm) program energy savings. CFL programs have contributed more than 60 percent of energy savings of the most established energy efficiency program sponsors (EEPS), and 2097 percent of savings for newer programs. Regional differences in CFL promotions are apparent, with the greatest spending in California and the Northeast. California leads the way, with $88 million projected for 2008, accounting for over half of reported national CFL program spending.

    The success of the energy sTar Cfl program comes from the creativity and collaboration of energy sTar manufacturer, retailer and energy efficiency program sponsor (eePs) partners. These entities have worked diligently to improve the quality of CFLs and consumer perception of the product. DOE will continue to work with these partners to continue to increase CFL market share and realize the remaining savings potential for CFLs.

    *This market profile is focused on the general market for medium screw-based CFLs, which DOE considers to provide a reasonable assessment of the market for ENERGY STAR qualified CFLs. The market for pin-based CFLs is not covered because comprehensive data for these types of CFLs are not readily available.

  • shiPmenTs anD markeT share

    CFL shipments have grown tremendously in three years, from 21 million lamps in 2000 to 397 million lamps in 2007. This increase represents a compound annual growth rate of 52 percent.2 CFLs have captured an increasing share of the market for medium screw-based lamps, growing from 1 percent to 23 percent between 2000 and 2007, or about 3 percentage points a year.3 Despite increased interest in and demand for energy savings, current data indicates that CFL shipments fell in 2008, suggesting that additional support may be needed to help sustain the market.

    The future market for incandescent lamps is also uncertain. Because each CFL effectively replaces at least five incandescent lamps over its lifetime, incandescent lamp sales have already begun to decline substantially and will continue to fall. In addition, EISA will increase efficiency standards for all lamps over the next six years. While incandescent lamps may improve in efficiency during this time, current ENERGY STAR qualified CFLs already meet the new energy efficiency standards, and the market will likely continue to shift to CFLs.

    The market for Cfls has come a long way, with significant improvement in shipments, variety, and media attention in the past three years.

    ENERGY STAR CFL Market Profile, Page 2

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    2010*2009*2008*200720062005200420032002200120000%

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    CFLs Incandescent Lamps CFL Market Share

    CFL and Incandescent Lamp Shipments by Year

    Note: *Projections

    Source: D&R International, Ltd., 2009.

  • sales Channels

    CFL sales have occurred primarily through home improvement stores, mass merchants, and warehouse stores, which accounted for three-quarters of all CFL sales in 2006. Grocery stores and drug stores, which are the traditional channels for incandescent lamp sales, sell only a small share of CFLs. The reason for the difference in distribution channels is not entirely clear, but generally, home improvement stores, mass merchants, and warehouse stores:

    Have greater available shelf space.

    Can purchase in large volumes.

    Are better able to leverage pricing with suppliers.

    Offer multi-packaging.

    Sell higher-priced goods, making CFLs relatively inexpensive compared to other stock products.

    ENERGY STAR CFL Market Profile, Page 3

    Hardware Store(12%)

    Lighting Supply Store (1%)

    Home Improvement(40%)

    Other (3%)

    Drug or Grocery Store (8%)

    Warehouse Store(11%)

    Mass Merchant(25%)

    Source: Northwest Energy Efficiency Alliance, Consumer Products Market Progress Evaluation Report 3, 2007.

    CFL Sales Channels in the Northwest 2006

    In 2006, as part of its sustainability strategy, Walmart announced it was committed to selling 100 million CFLs in 2007. To achieve this goal, Walmart worked with its suppliers to increase volume, while significantly lowering costs and price points. In addition, Walmart expanded shelf space and selection, and improved the clarity and effectiveness of packaging and signage. Most importantly, it made CFLs the easiest choice for consumers by placing them in the most visible, central, and accessible shelf positions. The high-profile campaign generated significant media attention and helped transform the way retailers view CFLs. Walmart far exceeded its goal, selling 162 million CFLs in 200741 percent of all CFL shipments. Learn more at http://green.yahoo.com/18seconds/

    Walmart initiative

  • markeT ComPeTiTion anD varieTy

    The number of CFL manufacturers has increased five-fold since the ENERGY STAR CFL program began ten years ago. In 1999, five manufacturers offered 22 ENERGY STAR qualified CFL products; today, 93 manufacturers offer more than 3,340 ENERGY STAR qualified CFL products.4 Due to manufacturer innovation ENERGY STAR qualified models have expanded beyond simple spirals to reflector, a-shaped, tubed, globe, outdoor, dimmable, three-way, and candelabra options.

    meDia aTTenTion

    Improvements in product quality and growth in CFLs shipments have led to much greater press coverage. The number of magazine, journal and newspaper articles about CFLs has increased annually since 2002.

    ENERGY STAR CFL Market Profile, Page 4

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    20082007200620052004200320022001200019990

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    CFL

    Mo

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    s

    Man

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    ctu

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    Manufacturers CFL Models

    CFL Manufacturers and Models by Year

    Sources: D&R International, Ltd., 2009.

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    200720062005200420032002

    Art

    icle

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    Sh

    ipm

    ents

    (m

    illio

    ns)

    Magazine and Journal Articles

    Newspaper Articles CFL Shipments

    Newspaper, Magazine and Journal Articles on CFLs, 2002-2007

    Sources: Lexis Nexis, accessed September 9, 2008.

  • naTional soCkeT saTuraTion

    Current CFL socket saturation is 17 percent across all sectors, with most remaining potential in the residential sector. Commercial and industrial businesses were early adopters of CFLs and are nearly saturated. Almost all remaining potential is in the residential market, which contains 90 percent of all potential sockets, 11 percent of which contain a CFL.

    Despite dramatic growth in the Cfl market, plenty of potential remains, especially in the residential sector.

    ENERGY STAR CFL Market Profile, Page 5

    0.0

    0.5

    1.0

    1.5

    2.0

    2.5

    3.0

    3.5

    4.0

    4.5

    IndustrialCommercialResidential

    Total Lamp Sockets: 4.7 Bil