The fact is that all our lights will be LED at some point in the future. We need to accelerate the transition.
I want to open discussion of a small and eccentric scheme to reduce emissions and household bills while slightly improving the UK's energy security. My suggestion is that the UK gives every householder a voucher for 10 high efficiency LED lightbulbs.
LEDs are now better, more long-lasting providers of light than the traditional compact fluorescent bulbs (CFLs) and halogen spotlights that now form the bulk of the UK's lighting stock. The halogen spotlights are also strikingly inefficient and very widely installed - it's not unusual for modern kitchens to have a ten or more 50W GU10 bulbs.
However the LED equivalents are still expensive and take-up is quite slow. The payback for the average bulb is probably about four years. This is an excellent rate of return compared to money held on deposit at 2% interest. But for most people it's still too long. Free vouchers will change this.
Giving every householder ten free bulbs would reduce bills by at least £20 a year and for some people much more. It would cut UK emissions by about half a percent and, importantly, should shave peak electricity demand by at least double this percentage. I calculate the cost to be about £1.6bn, or slightly more than the much-disliked ECO scheme.
The scheme could be restricted to those in fuel poverty, reducing the cost to a fraction of this amount. The cost per tonne of carbon saved is approximately equivalent to other measures. The scheme is progressive because the benefits can be directed mostly to less well-off people.
In the last year, LEDs have come of age. The newest lamps now give the same brightness and quality of light as halogens and the old incandescent bulbs. They fire up immediately, unlike many compact fluorescents (CFLs).
They last many tens of thousands of hours, or several years in continuous operation. They can be retrofitted in existing 12V (eg, MR16) and mains voltage sockets - including, most importantly, the ubiquitous, energy-guzzling GU10s.
Although the price of LEDs is coming down, they are still expensive for the high-output versions. For example, Wickes is selling a high quality GU10 replacement (45W equivalent lighting just 4.5W power consumption) for just shy of £20.
At the lower end of the market, the most competitive online retailers are offering 12V halogen replacements at around £6 from unbranded suppliers. But even that represents a 'price barrier' to most shoppers. As a result, most of the big retailers give LEDs relatively little space and don't promote them heavily.
However the fact is that all our lights will be LED at some point in the future. We need to accelerate the transition.
Electricity use in the home
Over recent years the amount of electricity to use for lighting in the home has tended to fall. CFLs have reduced average energy used from about 700 kWh a household to around 500 kWh a year. This is still about a seventh of total residential demand.
Getting people to replace fridges or televisions with more energy-efficient models is difficult. Few people are going to trade in an old, but functioning, washing machine because they might save £20 of electricity a year. Lights are different. The payback is much shorter and it is simple to take out one bulb and put in another.
There's another reason for pushing this scheme. Lighting demand is at its peak just as the UK experiences its maximum electricity need at 5.15 on a December afternoon. The lights are still on in shops and offices, and most homes need lighting at this time as well. So quickening the slow process of switching to LEDs will help shave electricity demand, reducing the possibility of blackouts in future years.
Note: When people speak of the 'lights going out', they refer to the possibility that the UK's power generation capacity will not be able to meet this early evening weekday peak. There's no possibility yet of more generalised power cuts at other times of the day.
Giving 26 million homes a voucher for ten LEDs isn't a trivial expense. But it is little more than the discredited ECO scheme and it will be much more effective. The voucher will be usable at any participating retailer (which might chose to take its wares door-to-door to offer customer a chance to pick the lights they want).
It's hard to be certain as to the cost. But if the LED market is anything like the CFL market, price falls will come surprisingly fast and deep as sales volumes pick up. The Government would also be able to negotiate low prices even for the highest quality bulbs, by guaranteeing manufacturers a high volume of sales.
I think retailers (together with the manufacturers supplying them) will be willing to accept £60 as the government payment for redeeming the voucher, or £6 a bulb. This implies a cost of about £1.6bn, perhaps spread over two fiscal years as ECO is.
I assume that the ten LEDs are all installed by the homeowner. The average light bulb in a high traffic location in the home is on for two hours a day. If we estimate that the ten LEDs are all in these locations and save an average of 25W, then the total yearly saving per household is about 150 kWh.
In fact, it is likely to be much more than that in some households, especially those running banks of GU10s. But to stick with this modest estimate, the financial benefit is about £20 at today's electricity prices, more in a home on Economy 7 tariffs. The carbon saving is about 2 million tonnes a year, or 2% of the UK total.
We cannot accurately know how many of the bulbs will typically be in use when the early evening peak arrives. If this number is 50% of all the bulbs installed under this scheme, the likely saving is about half a gigawatt or just less than 1% of peak UK demand.
This is about half the electricity provided by a large new gas-fired power station but, more importantly, it will make a significant improvement in the safety margin available to the National Grid.
The other changes that might spring from the scheme
Once householders have changed ten bulbs successfully, they will be more likely to move on to convert their whole house. Then the savings might be three times as much.
The example of the savings in domestic homes will tend to accelerate the remarkably slow switch to LEDs in shops and in commercial and public buildings. Once facilities managers have experienced the benefits of LEDs at home, they will be far more likely to authorise LED purchases in the workplace.
Moreover the massive scale of demand the scheme would trigger would make the market highly competitive - simultaneously raising quality, increasing choice, and reducing prices.
The impact on fuel poverty
Of course the impact of this scheme isn't particularly significant. £20 for the average household is a small fraction of the total electricity bill. But for the poorest people, who are more likely to be at home all day, the savings could be larger. They tend to use fewer lights but to have them for longer.
If we wanted to more precisely focus the scheme, it could be restricted to the same groups as the ECO is targeting - older people and households in the most deprived areas.
Even though the scale of this proposal is quite small, it would induce a much faster shift to LEDs than will otherwise occur. It can be targeted at people for whom cash is tight and therefore for whom a switch to LEDs is simply too expensive, even though the payback is only a few years.
The push to improve the energy efficiency of UK homes must go on. The last few weeks have shown how difficult it is to get insulations standards improved at a reasonable price. A switch to LEDs offers equivalent benefits and much, much easier implementation.