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New Survey: 95% of US Cities Satisfied with LED Streetlights and Saving Nearly 60% in Costs

October 29, 2012

WASHINGTON, Oct. 29, 2012 /PRNewswire/ — Among cities and municipalities in the United States that have implemented Light-Emitting Diode (LED) streetlight projects, 95% were satisfied with the overall performance of the streetlights. The more efficient LED streetlights were found to save on average nearly 60% in combined energy and maintenance costs, according to a new survey published today by Washington, DC-based research firm Northeast Group, LLC. The firm surveyed nearly 100 cities and municipalities across the US that have implemented some form of LED streetlight initiatives. The results were published today in the new study “United States Smart Infrastructure: LED and Smart Street Lighting.

“LED streetlights are transforming cities and municipalities across the US,” said Northeast Group. “Not only are LEDs helping save money through reduced energy and maintenance costs, but 95% of the cities and municipalities we surveyed said both they and residents were very happy with the performance and light quality of the new streetlights. Many reported that law enforcement officials in particular had praised the lights for improving visibility and public safety. The success of these LED projects is also helping to set the stage for more advanced ‘smart’ street lighting systems, which will reduce energy consumption by a further 20-30%. In total, the LED and smart street lighting markets are expected to reach a cumulative $4.7 billion in the US by 2025.”

But there are also some challenges facing the market. The survey revealed that 45% of the respondents had funded their LED streetlight projects almost entirely with stimulus funding from the American Recovery and Reinvestment Act (ARRA). A further 36% relied on ARRA funding or other grants for at least a portion of their financing. As this stimulus funding recedes, financing for future LED streetlight projects has been more difficult to secure, despite the success of early projects. However, the price of LED streetlights is steadily falling and on track to hit parity with legacy technology within a few years. As a result, the payback period for these projects is becoming more favorable and within the reaches of budget-constrained cities and municipalities. As the LED streetlight business case continues to improve, the number of projects is expected to expand rapidly in the coming years.

Northeast Group’s study identified nearly 400 US cities and municipalities that had either already begun or had considered installing LED streetlights. After conducting interviews with nearly 100 of them, the survey was able to draw conclusions such as the actual savings captured by pilot projects and full deployments, the public reaction, the most common financing mechanisms, and the vendors serving this market. Northeast Group found that over 25 vendors were already active in the US LED streetlight market and that, with expected strong growth, the market will continue to attract many vendors offering diverse solutions.

“Perhaps the most surprising finding in our survey was that most cities had only converted a small percentage of their streetlights to LEDs, even though they’ve been extremely popular,” added Northeast Group. “It was hard to find any detractors from these projects, yet LED penetration remains below 1% of the overall streetlight population in the US. Certainly, some hurdles, such as financing, remain. But overall these findings show that the market has vast growth potential.”

In addition to consuming less energy and reducing maintenance costs, LED streetlights also turn on and off nearly instantly and have dimming capability. This enables cities to install “smart” features to the streetlights, which further reduce energy consumption through dimming, improve billing, and enable remote monitoring features. Cities that have already installed communications networks for related smart grid infrastructure can take advantage of existing installations to lower overall costs.

“Smart streetlights are the logical next step,” according to Northeast Group. “Current pilot projects such as in Chattanooga, Tennessee have demonstrated that smart streetlights improve safety while lowering costs. As more cities invest in LED streetlights and smart grid infrastructure, smart streetlights will help cities further reduce energy consumption. A majority of the cities in our survey were interested in pursuing smart streetlight systems in the future.”

Northeast Group’s study provides full survey results and analysis, forecasts to 2025 for the LED and smart streetlight markets, detailed cost-benefit analyses, and profiles of the leading vendors. It also includes detailed case studies of the largest and most successful projects. The study is 120 pages long and includes over 80 charts, tables, and graphics. The study was completed using both primary and secondary sources, including a survey of nearly 100 cities and municipalities. The study provides valuable insights for those vendors hoping to expand in the US streetlight market and also those cities and municipalities who are considering these types of projects and would like further data and analysis to help make their decisions.

ABOUT: Northeast Group, LLC is a Washington, DC-based smart grid market intelligence firm.

Key questions answered in this study:

  • What were the average energy and maintenance cost savings for cities and municipalities implementing LED and smart streetlight projects?
  • What are the typical break-even periods for these projects?
  • What are the primary financing mechanisms for these deployments?
  • How large will the LED and smart streetlight markets be through 2025?
  • Who are the leading vendors in the US LED market and who is poised to lead the growing smart streetlight market?
  • Which cities are leading the way in smart streetlight installations and how can other cities emulate them?
  • How will smart streetlights fit into larger smart infrastructure plans?
    Table of Contents

    i. Executive summary                                                     1
    ii. Methodology                                                          9
    1. Introduction to smart infrastructure                                 12
                    1.1 What makes infrastructure "smart?"                  12
                    1.2 Smart infrastructure applications                   14
                    1.3 How do smart infrastructure applications build
                     on each other?                                         20
    2. Overview of LED and smart streetlight benefits                       21
                    2.1 Background of LED streetlights and comparison
                     to other technologies                                  21
                    2.2 Cost savings potential of LEDs                      25
                    2.3 Advanced "smart" lighting features                  30
    3. Survey analysis: the current status of LED and
     smart streetlights in the US                                           38
                    3.1 Energy and maintenance cost savings from LED
                     streetlights                                           39
                    3.2 Financing LED streetlights                          42
                    3.3 Scale of LED streetlight installations              46
                    3.4 Public reaction to LED streetlights                 48
                    3.5 Interest in "smart" streetlight features            49
    4. Contested issues in LED and smart streetlight
     systems                                                                51
                    4.1 City vs. utility streetlight ownership              51
                    4.2 Legal issues involving dimmed streetlights          59
    5. Case studies                                                         62
                    5.1 Chattanooga                                         62
                    5.2 Los Angeles                                         67
                    5.3 San Jose                                            69
                    5.4 Seattle                                             74
    6. LED and smart streetlight market forecast                            79
                    6.1 LED and smart streetlight deployment pace           79
                    6.2 Cost of LED and smart streetlight deployments       81
                    6.3 LED streetlight market forecast                     82
                    6.4 Smart streetlight market forecast                   85
    7. Vendors                                                              90
                    7.1 Cooper                                              90
                    7.2 Cree                                                91
                    7.3 Echelon                                             93
                    7.4 GE                                                  94
                    7.5 Global Green Lighting                               94
                    7.6 Holophane                                           95
                    7.7 Leotek                                              96
                    7.8 LSI                                                 97
                    7.9 Philips                                             98
                    7.10 Schreder                                           99
                    7.11 Sensus                                            100
                    7.12 Additional vendors                                101
    8. Conclusion                                                          102
    9. Appendix                                                            104
                    9.1 Cities responding to municipal street lighting
                     survey                                                104
                    9.2 Cities identified as having considered LED
                     streetlights                                          105
                    9.3 Companies covered in this report                   111
                    9.4 List of acronyms                                   112

    List of Figures, Boxes, and Tables

    Survey highlights                                                  3-6
    LED and smart streetlights: key takeaways                                7
    Combined LED and smart streetlight market forecast                       8
    LED and smart streetlight market forecast data                           8
    Table 1.1: Smart infrastructure market segments                         13
    Figure 1.1: Smart infrastructure overview                               15
    Table 1.2: Communications technologies                                  16
    Figure 1.2: Smart grid value chain                                      17
    Table 2.1: LED streetlight benefits                                     22
    Table 2.2: Different types of streetlight
     luminaires                                                             23
    Table 2.3: HPS to LED wattage cross-reference                           25
    Table 2.4: Payback on Ann Arbor's LED streetlight
     program                                                                27
    Figure 2.1: Payback on Ann Arbor's LED streetlight
     program                                                                27
    Table 2.5: Simple payback on replacement of 4-year
     HPS streetlights                                                       28
    Figure 2.2: Adjusted payback on replacement LED
     streetlights in Ann Arbor                                              28
    Table 2.6: Simple payback --4-year lifetime HPS
     replacement and higher energy costs                                    29
    Figure 2.3: Payback on replacement LED streetlights
     assuming higher energy costs                                           29
    Table 2.7: Summary of payback in LED cost-benefit
     examples                                                               30
    Figure 2.4: Conservative estimate of payback with
     dimming                                                                33
    Table 2.8: Conservative estimate of payback with
     dimming                                                                33
    Figure 2.5: Payback with better scaled dimming                          34
    Table 2.9: Estimate of payback with better scaled
     dimming                                                                34
    Figure 2.6: Payback with better scaled dimming and
     higher energy prices                                                   35
    Table 2.10: Estimate of payback with better scaled
     dimming and higher energy prices                                       35
    Table 2.11: Summary of payback in smart lighting
     cost-benefit examples                                                  37
    Figure 3.1: LED streetlight projects in the US                          38
    Table 3.1: Northeast Group municipal streetlight
     survey summary                                                         39
    Figure 3.2: Average energy savings from LEDs                            40
    Figure 3.3: Reported energy savings from LEDs                           40
    Figure 3.4: Cities with access to LED streetlight
     rates                                                                  41
    Figure 3.5: LED streetlight financing                                   43
    Figure 3.6: Percentage streetlights converted to
     LED                                                                    47
    Figure 3.7: Completion of LED streetlight projects                      47
    Figure 3.8: Interest in "smart" streetlight
     features                                                               49
    Table 4.1: Streetlight ownership models                                 52
    Figure 4.1: Major investor-owned utilities
     offering LED rates                                                     53
    Box 4.1: Calculating streetlight flat rates at PG&E                     55
    Box 4.2 Traditional and decoupled rate making                           57
    Figure 4.2: States with electric decoupling                             57
    Box 4.3: Hypothetical streetlight decoupling
     example                                                                58
    Figure 4.3: Legal framework for assessing liability
     of streetlights                                                        60
    Table 4.2: Dimming criteria for the standard IESNA
     RP-8-05                                                                61
    Table 5.1: Summary of case studies                                      64
    Table 5.2: Payback on LED and smart systems in
     Chattanooga                                                            66
    Figure 5.1: Payback on Chattanooga's smart
     streetlight project                                                    66
    Table 5.3: Payback on Los Angeles' LED streetlight
     program                                                                70
    Figure 5.2: Payback on Los Angeles' LED streetlight
     program                                                                70
    Table 5.4: Cost breakdown of San Jose's smart
     lighting system                                                        73
    Table 5.5: Payback on San Jose's smart streetlight
     program                                                                74
    Figure 5.3: Payback on San Jose's first 2,100 smart
     streetlights                                                           74
    Table 5.6: Seattle vendor selection cost analysis                       76
    Figure 5.4: Cost of different streetlight
     manufacturers in Seattle                                               76
    Figure 5.5: Price per streetlight of Seattle's LED
     streetlight project                                                    77
    Figure 5.6: Payback on Seattle's LED streetlight
     project                                                                77
    Table 5.7: Payback on Seattle's LED streetlight
     project                                                                78
    Figure 6.1: Annual investment in LED and smart
     streetlights                                                           79
    Figure 6.2: Common types of streetlight fixtures                        81
    Figure 6.3: Price range for different watt LED
     streetlights in municipal survey                                       82
    Figure 6.4: Average cost of sub-100 W cobra head
     LED streetlights                                                       82
    Figure 6.5: Average cost per streetlight of smart
     streetlight projects                                                   82
    Figure 6.6: Detailed LED streetlight market
     forecast                                                               83
    Table 6.1: LED streetlight forecast data                                83
    Figure 6.7: LED streetlight penetration rate                            84
    Table 6.2: LED and smart streetlight market drives
     and barriers                                                           85
    Table 6.3: Smart streetlight forecast data                              87
    Figure 6.8: Smart streetlight market forecast                           87
    Figure 7.1: Market share of leading LED streetlight
     vendors in municipal lighting survey                                   90
    Figure 7.2: LED vendors by number of cities served                      91
    Table 7.1: Leading LED and smart streetlight
     vendors                                                                91
    Table 7.2: Vendors in largest US LED streetlight
     projects                                                               92
    Table 7.3: Additional vendors in the US LED
     streetlight market                                                    102

Companies covered in this report

  • American Electric Lighting
  • Amerlux
  • Arizona Public Service Co
  • Cooper Lighting
  • Cree
  • Detroit Edison
  • Dialight
  • Duke Energy
  • Duralight
  • Echelon
  • Ecofit
  • ESL Spectrum
  • GE
  • Georgia Power
  • Global Green Lighting
  • Greenstar
  • Holophane
  • Kansas City Light & Power
  • Kim
  • King
  • LED Roadway
  • Leotek
  • Lighting Science
  • LSI
  • Omega Pacific
  • Pacific Gas & Electric
  • Portland General Electric
  • Progress Energy
  • Ringdale
  • San Diego Gas & Electric
  • Schreder
  • Sensus
  • Southern California Edison
  • Sternberg
  • Sylvania

SOURCE Northeast Group, LLC


Source: PR Newswire