Lighting has become an increasing financial burden to businesses in recent times following dramatic price rises in the cost of fluorescent lamps and electricity. The Energys Group look at how best to respond to this price crisis
A key factor that is largely taken for granted with regards to flourescent lamps is that an essential component in their production is phosphors – which are rare earth elements (REEs). However, a shortage of these vital components is having a huge impact on the price of flourescent lamps. Combine this with the fact that UK businesses have had to contend with dramatic spikes in electricity prices, and it is clear that this price crisis could not have come at a worse time.
A shortage of phosphor
So, why has there been a shortage of phosphors? Well, in order to protect its diminishing reserves, China, which controls 95% of the world’s supply of REEs, has reduced its export supply. This has had a dire impact on fluorescent lamp supply, forcing prices up. In fact, the major lighting retailers have this year announced price hikes of 35-70% for fluorescent lamps, with further price increases planned for Q4 and next year’s Q1.
What’s more, the trend of rising fluorescent lamp prices is likely to continue. Chinese exports of REEs, including the sub-group that contains phosphor, fell 40% last year, to 30,259 tonnes (according to the European Commission). Lobbying from the major western powers persuaded China to keep exports of REEs in 2011 on par with 2010 levels. However, because the new quota for exports has been amended to include ‘ferroalloys’, which contain rare earth metals, EU officials and traders suggest that it is an effective decrease in REE exports.
My advice to businesses is to avoid further delays in their decision making process and start the upgrade to newer, efficient lighting now.” – Kevin Cox, technical director of light sector specialist, Energys Group
The obvious solution is to seek new sources of REEs. Indeed, there are reserves in the US, Australia, Russia, India, and Malaysia, but expanding mining in these regions takes time. REEs from these countries are unlikely to become available until later this year or 2013. Another option is to obtain phosphors through recycling. However, this process is in its early stages and will not have an immediate effect on bringing down the price of phosphors.
Volatile energy prices
The problem of rising lamp prices is worsened by the volatility of global energy markets, which has led to a rise in wholesale energy costs. This has driven up electricity prices – by as much as 60% in some cases. With organisations already struggling to manage an increased spend on fluorescent lamps, also contending with soaring energy bills is pushing many organisations to the limit.
Kevin Cox, technical director of light sector specialist, Energys Group, commented, “The combination of phosphor shortages and rising energy prices is creating a big problem for UK business. What organisations are looking for is a way to stabilise their lighting spend, instead of being buffeted by market forces. Boosting energy efficiency on-site is by far the most pro-active response to the crisis, and selecting retro-fit solutions can help to keep costs to a minimum.”
Boosting energy efficiency
The double blow of price increases in both electricity bills and replacement lamp costs can be softened with the use of energy efficient lamps with long life spans. Good quality T5 lamps have a life expectancy of over 20,000 hours, and organisations can expect to consume up to 65% less energy by using them.
“News of the phosphor shortage should not be seen as an all-out warning against fluorescent lamps,” said Cox. “It is simply important that organisations differentiate between short lifespan, older lamps and the newer, energy efficient and long life lamps. By choosing the latter option, businesses can drastically reduce both the frequency of lamp replacement and also cut their electricity bills.”
Paybacks
Tough economic conditions have seen many organisations unwilling and reluctant to undertake a costly lighting upgrade, despite the fact that the value of upgrading to energy efficient T5 lamps has been well documented. However, Cox warned, “It is a false economy to leave in place old, energy wasting lamps – especially now that retro-fit converters like Energys Group’s ‘Save It Easy’ allow the new T5 lamps to be slotted into the existing light fittings.
“It is likely that prices for both energy and lamps will continue to rise. My advice to businesses is to avoid further delays in their decision making process and start the upgrade to newer, efficient lighting now. Taking into account lamp price increases and rising electricity prices, payback periods on all of Energys’s lighting solutions have dropped dramatically – by as much as 25%. Many energy efficient lighting conversion projects are now paying for themselves in less than a year, and with financing options also available it is often possible to upgrade with no capital outlay at all.”
Energys Group
T: 01306 621 546
