25 Sep 2018
The Role of Governments in the Transformation of the SSL Industry
The introduction of solid-state lighting (SSL) has disrupted the global structure of the lighting industry. The potential for substantial energy savings and reductions in the environmental impact of lighting have led to considerable interest by national and regional governments in encouraging adoption. The most intense efforts have been in China, where federal, provincial and local governments have made substantial investments to drive the transformation and expansion of the lighting industry. Thus, although most of the fundamental discoveries that led to the development of LEDs were made in Japan, Europe and North America, Chinese manufacturers are capturing larger and larger fractions of industry revenues and profits.
There are many ways in which governments can influence industrial transformation.
• Support for research and development
• Education and retraining of skilled workers
• Subsidies or barriers to new manufacturing facilities
• Protection of domestic industry
• Market development
• Quality control
The history and impact of government activity in China will be compared with that in Europe and North America. In 2017 SSL products gained a share of 65% in the Chinese lighting market (measured in unit sales, rather than value). The penetration of the installed base reached 35%, leading to energy savings of 200TWh and a reduction in CO2 emissions of around 150M tonnes. Revenues from exports from China continued to rise, despite substantial price erosion.
Developing countries have struggled to participate in the industry renewal, partly due to the withdrawal of the dominant international players in the traditional lighting industry and also to challenging economic conditions and instabilities within national governments. India has been most successful, finding a way to stimulate LED adoption and rebuild the domestic industry with only minimal government subsidy. The key elements in the UJALA program, promoted in 2014 by President Modi, were large-volume purchases of LED bulbs through a tender process, support for domestic manufacturing of lamps and luminaires, reinforcement of quality control measures, and establishment of a new distribution program for domestic bulbs.
In contrast to India, the lighting industry in countries such as Brazil and South Africa has received little help from governments and companies have struggled to survive under the onslaught of imports from China.
The major goal of the presentation will be to present data from these countries and to highlight issues for the audience to discuss concerning the appropriate roles of their own governments in supporting the health of the lighting industry