An LED rarity

Here's another reason why LED light bulbs cost so much: they rely on Chinese-controlled rare earth minerals, a research report notes.
Written by Mark Halper, Contributor

First the good news. Manufacturers of LED light bulbs are getting better all the time at improving the bulb's "warmth" - that glowing feeling that people get from the soft light of candles.

Regular readers of this blog know that interior designers have criticized LEDs for emitting a coldness compared to the 100+year-old incandescent bulb. Manufacturers like Philips are addressing that problem by coating their bulbs with phosphor - a process that explains the yellow color of Philips LED bulbs such as their new 75-watt model (pictured). That, in turn, should help the energy efficient LED bulb ultimately replace the electricity-hungry incandescent, which requires roughly 80% more power than its LED equivalent.

One problem: phosphor comes from rare earth minerals, and as a new report from Pike Research notes, China controls 97% of the world's rare earth production.

"China’s new export quotas, introduced in July 2010, have seen prices for rare earths skyrocket," the report notes.

That can't help the industry's acknowledged need to cut bulb prices, which range to over $40 in the U.S. and €20 in Europe - LED bulbs have a bill of material that include components that convert a home's alternating current to direct current and that knock down the voltage.  I have at least 30 light fixtures or lamps in my house in the UK (many of you will have more). If they all blew at once, I'd have to find $1200 to replace them, using American prices. That's a capital cost in some books. The rare earth situation does not make that any better.

What does soften the blow is the money I'd save on electricity over the years, and the money I'd save by possibly never having to buy light bulbs again. Remember, these things are supposed to last for anywhere from 15 to 25 years, which is, of course, unproven.

Of course the lighting industry is not the only renewable energy sector, or technology business for that matter, afflicted by the rare earth quandary. Manufacturers are using rare earths in everything from iPhones to wind turbines.

"Rare earth metals have been identified as a troubling area of potential risk for a number of prominent clean energy technologies including wind turbines, electric vehicles, fuel cells, and energy efficient lighting," the Pike report notes.

I've said it before and I'll say it again: I like the long-term prospects for LED bulbs. But unless prices decline, they have a rare chance of taking the consumer market by storm soon.

Photo: Philips

This post was originally published on Smartplanet.com

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