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Home Support Why LED lighting provides economic benefit while reducing CO2

Why LED lighting provides economic benefit while reducing CO2

Energy conservation and the global movement towards CO2abatement.

Scarce resources and climate change are now two of the world’s greatest concerns. Although there are several arguments on the scientific evidence, the implications ultimately equate to those driven by the global energy depletion issue, which is indisputable. McKinsey has been working on this topic for several years from the perspective of climate change, and has developed a global greenhouse gas (GHG) abatement cost curve that offers a very holistic perspective on GHG abatement activities. These initiatives are in essence very much the same as those required for energy conservation (Exhibit 4).

Analysis using the GHG abatement activities reveals that replacing current non-energy-efficient light sources with energy-efficient light sources will provide substantial economic benefit while at the same time reducing CO2. In contrast, most other CO2 abatement activities will have a negative economic impact. Replacing incandescent
lighting with LED to reduce 1 t CO2 per year in 2015 would provide an economic benefit (calculated as total cost of ownership) of around EUR 140 per 1 t CO2. Achieving the same CO2reduction by introducing solar power would cost around EUR 80 per 1 t CO2(Exhibit 5).

Replacing traditional light sources would also require less capital investment than for solar power. The investment for substituting incandescent or CFL lighting with LED is a fifth of the investment for installing solar power, calculated on a t CO2e p.a. basis, which means subsidizing LED is a more efficient investment than subsidizing solar power from a government perspective.Replacing traditional lighting technology with energy-efficient technologies such as LED is therefore much easier and represents much sounder economics for reducing CO2emissions than other CO2 reduction activities. By and large, populations have now adjusted to the fact that the average price of lighting products will increase. Energy efficiency is the driving force that will contribute most powerfully to the upcoming discontinuity in the lighting industry.

Now you will be convinced why people starts to use LED panel light, it saves CO2 and money!

(Source: McKinsey - The Global Lightmarket Study 2012)