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Excerpts from a Research report for Consumer Outdoor Lighting with primary focus to shift to more efficient lighting. 
For the most part this was an early stage in the conversion to Compact Fluorescent lighting (CFL). 

A further energy savings can be obtained using even more efficient Light Emitting Diodes (LED) illumination.

For additional information contact the agency link (http://www.cee1.org/resid/rs-lt/fixtureassessment.pdf).

FINAL REPORT

Residential Lighting Fixture

Market Assessment:

Ceiling Fans and Outdoor Lighting

 

4.2. Market Assessment

Lighting accounts for about 10 to 15 percent of total energy consumption in a typical U.S. home.1 About 87% of residential lighting sources currently use incandescent technologies. The U.S. Department of Energy estimates that up to 31.7 billion kWh, or 35% of all electricity currently used for lighting, could be saved with the use of CFLs. While about half of U.S. households are familiar with CFLs, only 8.9% of households use CFLs.2 A considerable amount of research has been devoted to characterizing overall residential lighting markets. Rather than repeating it here, among the many resources that exist, we recommend two sources in particular for assessments of the overall fixture and CFL markets: Lighting the Way to Energy Savings: How Can We Transform Residential Lighting Markets? (Natural Resources Defense Council, December 1999) and Lighting Market Sourcebook for the U.S. (Lawrence Berkeley National Laboratory, December 1997).

7.2. Types of Outdoor Lighting
From a functional and style perspective, there are three basic types of outdoor lighting: decorative, security, and landscape lighting. These distinctions are not consistent in the lighting industry; manufacturers and retailers market lighting fixtures in any number of configurations. Also, the categories are not mutually exclusive. For example, both decorative and landscape lighting can serve a security lighting role, some ground-mounted landscape lighting fixtures have decorative elements, and controls are not exclusively limited to flood lighting. However, by categorizing outdoor lighting by functional and style characteristics, we can isolate some of the elements that are important to consider in promoting energy saving alternatives.

Phase 2: Residential Lighting Fixture Market Assessment: Ceiling Fans and Outdoor Lighting Page 35 The lack of a detailed and comprehensive source of U.S. shipments, imports, and exports of residential outdoor fixtures makes it difficult estimate sales volume by category. Across all categories of residential outdoor lighting, the largest volume of sales probably can be attributed to decorative lighting, followed by security, then landscape lighting.33 As Table 6 shows, the California Energy Commission estimates that over 10% of all fixtures installed in homes are decorative, just over 1% are security and a similar number are other types of outdoor lighting (presumably landscape).

 

 

 

 

 

 

Table 6: Energy Using Characteristics of Outdoor Lighting

% of all
fixtures

% of all watts

Average

hours per day

 

% of all kWh

Outdoor ceiling 1.8% 1.5% 3.10    2.0%
Outdoor wall flood  1.3 3.0 2.06 2.6
Outdoor lantern  8.6 6.7 2.97  8.6
Outdoor wall barn 0.1 0.1 10.55 0.4
Other outdoor  1.0 0.8 5.16 1.7
All outdoor total  12.8 12.1 2.96 15.3
 

 

Source: Heschong Mahone Group. Residential Lighting Baseline: Lighting Efficiency Technology Report.

California Energy Commission. CEC Contract #400-95-012. October 21, 1996.

Other sources offer incomplete data or data not directly comparable. For example, according to the U.S. Census Bureau, U.S. shipments of residential outdoor fixtures in 1998 consisted of 3.2 million fixtures designed for attachment to the house and 13.7 million unattached fixtures for the garden, patio, and yard. No estimates were provided for shipments of custom lighting (lanterns, etc.). Another source of residential outdoor lighting shipments (including imports, domestic production, and exports) from 1993 estimates about 9 to 10 million units of post, yard, and landscape lighting; about 8 million units of wall and ceiling fixtures; and about 2 million units of parabolic aluminum reflector (PAR) holders.34 Approximately 6% of outdoor fixture shipments in the U.S. are fluorescent; the vast majority are incandescent.35 It is estimated that about

200,000 to 350,000 Energy Star outdoor fixtures were sold in 1999.36 

7.2.3 Landscape Lighting

Whereas decorative lighting and flood lighting are designed to illuminate areas of outdoor space, in landscape lighting, the effect of the lights (ability to highlight a landscape or architectural feature with light and shadow) is often more important. Landscape lighting fixtures are intended to be unobtrusive; it is common for them to be concealed within the foliage they are intended to illuminate. Manufacturer lines of landscape lighting include spot lights, floods, and products such as walk-way lighting, bollards, deck lighting, and step lighting fixtures that are sometimes included in decorative product lines.

Due to the fact that landscape lighting is largely installed for aesthetic purposes, it is a category of outdoor lighting reserved primarily for higher-income consumers, and it is a market that is closely tied to a strong economy. As applications of landscape lighting often incorporate artistic design, consumers are likely to utilize the services of a landscape designer or lighting consultant in specifying fixtures. Landscape lighting designs vary widely, as do the costs, with consumers spending $800 to $1,200 for lighting a typical suburban front lawn, but as high as $10,000 for Phase 2: Residential Lighting Fixture Market Assessment: Ceiling Fans and Outdoor Lighting Page 38 more elaborate full yard designs.39 At the low end of the landscape lighting market are products used primarily for pathway lighting.

Landscape lighting configurations are varied and applications can be highly creative. Variations include downlighting (light source from above) to imitate moonlight or sunlight, uplighting (light source from below), or backlighting (light source creating a silhouette of object of interest against a backdrop wall or fence).

Lighting sources commonly used in landscape lighting include incandescent, halogen, and mercury vapor. In some cases, colored light sources are used for dramatic effect. Low voltage systems are also commonly used with landscape lighting design. While individual low voltage lighting fixtures are available from retailers, a popular method of marketing this style of lighting in home improvement and hardware stores is to package a family of low voltage products together. Some solar pathway fixtures are available, although those at the low-end of the market do not provide the levels of light output that many consumers expect, and one retailer from a big box home improvement store we spoke to discourages selling them based on high return rates.

The fact that many landscape fixtures require very low light output makes them a potentially good application for CFLs. However, many landscape lighting fixtures designs are physically small, which may limit applications where CFL-based fixtures can match consumer expectations. 

7.4. Energy-Savings Potential

Outdoor lighting accounts for 10% to 15% of total household lighting energy use. This is due to the fact that most homes have outdoor lighting, and the lights are used for multiple hours each day. The DOE estimates that in approximately half the homes with outdoor lighting, the combined wattage of all outdoor lights is over 150 watts. Four out of ten homes turn their lights on for the evening, and the remainder either leave the lights on all night, or have them controlled 40 E-Source. Lighting. Technology Atlas Series, Volume 1, 1997. Boulder, CO. Phase 2: Residential Lighting Fixture Market Assessment: Ceiling Fans and Outdoor Lighting Page 40 in some way.41 It is estimated that outdoor lights are used an average of almost 3 hours per day.42 The vast majority of outdoor lighting is incandescent, not energy saving CFLs

 

8.2. Retail Sources for Fixtures

In home improvement and maintenance activities, there is a large do-it-yourself market. Consumers find residential fixtures in a wide variety of retail stores that range from home improvement stores to hardware stores to department stores to lighting specialty stores. The store that consumers shop in depends somewhat on the type of fixture being purchased. For example, consumers buying ceiling fans are most likely to go to a home improvement store, unless they are buying a higher-end fan, which can be found at a lighting specialty store. Consumers buying decorative and security outdoor fixtures go to home improvement stores and hardware stores, whereas a consumer in a high-end, custom home may utilize a landscape contractor to assist in landscape lighting. Contractors (builders, electrical) are occasionally involved in the specification of fixtures for renovation and remodeling work.

 

8.2.1 Home Improvement Stores

Home improvement stores dominate the market for replacement fixtures or those purchased for a renovation or remodeling project; one recent study in the Northeast found that nearly two-thirds of consumers buying outdoor fixtures and about half of those buying indoor fixtures purchase them from home improvement stores.54 Home improvement stores are also a source of fixtures 54 Opinion Dynamics Corporation and Regional Economic Research. Baseline Study of the New Jersey Residential Lighting Market. November 1999.

Phase 2: Residential Lighting Fixture Market Assessment: Ceiling Fans and Outdoor Lighting Page 52 for many contractors. These stores carry selections of decorative, security, and landscape outdoor fixtures within the low- to mid-price ranges. Two national chains, Home Depot and Lowe.s (900 and 556 stores respectively), lead the do-it-yourself (DIY) market among home improvement stores. The nation.s third largest home improvement chain, HomeQuarters/Builders Square, filed for bankruptcy in June 1999, leaving only Menard.s (Midwest) and HomeBase (West) with small regional holds in the home improvement market. 

Last year, Home Depot accounted for $30.2 billion in sales. It is the nation.s 6th largest retailer and growing.55 This growth could be significant for the lighting industry, as several developments are occurring within the company. 

First, the chain is expanding with the Expo Design Center, a 15-store chain that carries high-end lighting, appliances, carpets, and kitchen and bath fixtures, with plans for 200 stores within five years. 

Secondly, while Home Depot has displaced many small hardware stores, it is now trying to compete for the customers who prefer a smaller hardware store venue by opening Villager.s Hardware in 3 locations in New Jersey.56

Thirdly, Home Depot announced in June 2000 that it is acquiring Georgia Lighting, a leading specialty lighting designer, distributor, and retailer based in Atlanta. It is expected that this acquisition will strengthen Home Depot.s sourcing, training, and merchandising from the low end to the high end of the lighting market.57

While Home Depot has a strong and apparently gaining hold on the lighting market (from both the consumer and contractor position, and covering the lower- to higher-ends of the market), the company has a reputation for being a tough negotiator with manufacturers. Buying decisions are made on a regional basis, but buying agents or regional .team captains. also make product recommendations to other team captains in their areas of expertise. This sharing of information can have significant influence on the buying decisions by other regions.58 Biannually, Home Depot also conducts product reviews, inviting existing vendors to review the terms of their supply contracts, and allowing new vendors to make their pitches.59 While the opportunity to be a supplier means widespread distribution, many manufacturers are reluctant to comply with Home Depot.s stringent product specifications, quantities, and tight price margins. This probably inhibits niche fixture manufacturers selling products in this market. When Home Depot is unable to gain the desired market share or contract terms in a particular product category with existing brands, it sometimes bypasses them by creating its own. The Hampton Bay line of ceiling fans it carries is one such example. Hampton Bay is actually a brand manufactured by a handful of suppliers for Home Depot. Eliminating national marketing costs, Home Depot gains a better profit margin, and manufacturers are able to utilize some of their excess capacity. The only other competing brand name for ceiling fans in the stores is Hunter.

55 American Express Top 100 Retailers. Stores magazine. July 2000. 56 Forbes Magazine. .Under Construction.. Bruce Upbin. January 24, 2000. 57 Press release, .The Home Depot Announces Plans to Acquire Georgia Lighting.. Atlanta, June 3, 2000. 58 Calwell, C.; Granda, C.; Gordon, L.; Ton, M. Lighting the Way to Energy Savings: How Can We Transform Residential Lighting Markets? Volume 1: Strategies and Recommendations. Natural Resources Defense Council. December 1999. 59 Forbes Magazine. .Profit in a Big Orange Box.. Bruce Upbin. January 24, 2000. Phase 2: Residential Lighting Fixture Market Assessment: Ceiling Fans and Outdoor Lighting Page 53 Lowe.s, based in Wilksboro, NC, is Home Depot.s largest competitor, but about half the size. With $12.2 billion in sales, Lowe.s is the nation.s 20th largest retailer.60 Its stores are located mostly in the Southeastern part of the country, but a 1999 acquisition of Eagle Hardware & Garden (Renton, WA) expanded its territory to include stores in the West. Lowe.s makes vendor deals at the national level for its stores, but does not have the cutthroat reputation of Home Depot among suppliers.

 

8.2.2 Hardware Stores

Many hardware stores, including national chains and independently operated stores, closed their doors during the 1990s due to competition with big-box home improvement stores. Two national hardware chains, Ace and True Value, continue to thrive.

The Ace Hardware chain consists of 5,100 affiliated stores, all independently owned and operated. Ace offers its member stores the benefit of bulk purchasing power to negotiate supplier contracts at more competitive prices than stores could receive on their own. It also creates its own Ace brands in some product lines. Among the lighting fixtures that Ace stores carry are ceiling fans and decorative, landscape, and security lighting.

The True Value hardware chain is part of the TruServ company and consists of 10,500 independently owned stores across the nation, with $14 billion in sales. As a cooperative, its stores purchase lighting products directly through a corporate fulfillment center, eliminating direct contact with manufacturers. Like Ace, this enables member stores to use the volume purchasing power of the cooperative, which makes them more price competitive and allows them to consolidate the costs of distribution, operation, and promotion. For some product lines, TruServ creates private label brands.61 Among the lighting fixtures that True Value stores carry

are ceiling fans and decorative, landscape, and security lighting.

 

8.2.3 Mass Merchandisers

Large discount department stores sell a variety of product lines that usually include light bulbs, some portable lamps, and a limited selection of hard-wired fixtures. Selections of ceiling fans and outdoor lighting at mass merchandisers are more limited than at other retailers previously mentioned, and the product lines tend to be lower-end. Due to the wide product lines sold in these stores, there has been a problem in making sales personnel knowledgeable about lighting fixtures and energy-saving fixtures in particular. The largest mass merchandisers that sell ceiling fans and outdoor fixtures include Wal-Mart, Sears, KMart, and Target (the nation.s top four retailers, in order)62.

60 American Express Top 100 Retailers. Stores magazine. July 2000. 61 TruServ. www.truserv.com.

62 American Express Top 100 Retailers. Stores magazine. July 2000.

Phase 2: Residential Lighting Fixture Market Assessment: Ceiling Fans and Outdoor Lighting Page 54

 

8.2.4 Lighting Specialty Stores

Lighting/electrical specialty stores typically carry a wide variety of fixtures and more unique product lines that might include those from niche manufacturers. Often, these companies are lighting distributors who have showrooms open to the public. They cater to the contractor and higher-end consumer market, and have among the most knowledgeable sales staffs. The majority of lighting specialty stores are independently owned, while a few, such as Lamps Plus, are larger chains.

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For additional information contact the agency link (http://www.cee1.org/resid/rs-lt/fixtureassessment.pdf).