By Paul Chesser
Entrepreneurs in industries tied to the energy efficiency gambit, justified by the climate change House of Cards, all have the same false bravado: They are “game changers” and “market leaders” (for products nobody wants); all their squandered revenues are “investments;” their technological breakthroughs are always “just around the corner;” and it just takes one more round of mandates/grants/loans/tax breaks to achieve viability in the free market.
It’s true of renewable energy and electric vehicles, and as Cree Inc. CEO Chuck Swoboda revealed recently, it’s true of the alternative light bulb industry, too. In a shareholder meeting at the company’s Durham, NC, headquarters, he boasted about his marketing acumen that he says will persuade the public to embrace Cree’s light-emitting diode (LED) technology and abandon the traditional light bulb – which consumers will soon have no choice about.
The meeting featured some new Cree television commercials, with one titled “Eulogy,” in which a spokesman buries an incandescent in a field. “We are changing generations of belief about lighting,” Swoboda said.
In reality the changes in how we light our homes and businesses are not because of brilliant advertising. It’s because the U.S. government – like other countries – implemented a gradual ban on incandescent light bulbs. Last year 100-watt bulbs were made illegal. This year it was 75-watters. Next year restrictions on 60-watt bulbs take effect.
Unsurprisingly, Swoboda didn’t address the fact that government policy is largely behind the market growth for his products. Yet despite that huge advantage, he said the company would need to dedicate greater resources in the future to promote LEDs.
So what’s the big deal? Why the need for all the money and effort to convince consumers they need Cree’s LED-style lamps – which are supposed to be big energy savers – instead of the old-fashioned incandescents, especially when the government is giving him a big push?
Well, have you seen the price of light bulbs lately? Home Depot will sell you a six-pack of General Electric, “Double Life” 40-watt soft whites online for $3.97. That works out to 66 cents per bulb – probably pretty tough to beat, but if you can make a difference on energy savings, the market will listen.
Unfortunately the problem with Cree’s LED competitor to that bulb is while it consumes only six watts of energy, it costs $9.97 at Home Depot – per bulb. That means 15 of the GE soft white incandescents could be bought for the same price as the single Cree LED. Or put another way, Cree wants you to believe its newfangled bulb will last longer than if you replaced a bulb in the same fixture 15 times, and/or that the energy savings will make up the difference.
Two years ago, as the prohibition on 100-watt bulbs loomed, a Rasmussen poll found that 67 percent of respondents disapproved of the ban. Seventy-two percent said light-bulb choices are none of the government’s business. And whether new bulb technologies wou