As many green building programs continue advocating the transition away from conventional incandescent light bulbs to more energy-efficient compact fluorescent bulbs, solid state lighting is gaining traction in the marketplace, due to its numerous competitive advantages, and being elevated by government funding, which identifies this industry as a major job creation enterprise. A report in August 2009 by Strategies Unlimited forecasted that the high-brightness LED market would grow from $5.1 billion in 2008 to $14.9 billion in 2013, representing a compound annual growth rate of 24 percent.

Last month, Energy Secretary Steven Chu announced more than $37 million in Recovery Act funding to support high-efficiency solid state lighting projects. Solid state lighting (SSL), which uses light-emitting diodes (LEDs) and organic light-emitting diodes (OLEDs) instead of incandescent bulbs, has the potential to be 10 times more energy-efficient than traditional incandescent lighting, according to the U.S. Department of Energy. This federal office states that lighting accounts for approximately 24 percent of the total electricity generated in the U.S. today; by 2030, the large-scale deployment of cost-effective SSL could reduce electricity consumption for lighting by one-third across the country. However, like any early-stage technology, significant levels of R&D funding are necessary to reach maturation. The 17 projects selected for stimulus funding were categorized into three areas including: basic research, product development, and domestic manufacturing. 

Furthermore, these 17 SSL awards will be leveraged with nearly $28.5 million in private industry cost sharing, which increases the total project value to more than $66 million. SSL manufacturing-oriented projects received the largest portion of funding out of the three areas noted below:

1. Core Technology Research ($4 million): Three projects will focus on advancing the technical knowledge base of SSL for general lighting purposes. The projects will investigate improved performance based on fundamental research in design and materials with respect to cost.
2. Product Development ($10.3 million): Six projects will support the development and improvement of commercial grade SSL source, component, or integrated lighting products in order to develop commercial-grade screw-in fixture replacements for conventional lighting, as current pricing makes them prohibitive in mainstream adoption.
3. SSL Manufacturing ($23.5 million): Eight projects will focus on achieving significant cost reductions and enhanced quality by improving manufacturing equipment, processes, or monitoring techniques. These projects will address the technical challenges in production where SSL will be competitive with existing lighting.

The SSL industry has benefitted from six prior rounds of DOE funding, but this is the first time that the DOE has funded manufacturing projects. This is due to a new DOE initiative to accelerate the adoption of SSL technology through manufacturing enhancements that address cost. Similar to the clean energy growth opportunity, including widespread adoption of renewable energy sources, the U.S. could capitalize on this expanding market with appropriate incentives to foster a major domestic manufacturing industry to support SSL. Even though U.S.-based industry leaders such as Cree, based in Durham, NC, who received part of this stimulus funding, continue to hire more aggressively than other high-tech companies in other fields at this time, their next plant will be built in China.  States such as Arizona may be able to replace displaced manufacturing with the proper corporate tax incentive legislation in place before more opportunity is lost overseas.

As companies such as Cree make headway in technical feats such as their recent record-breaking achievement of 208 lumens of light intensity per watt for a white power LED, there is still a limited supply chain for equipment used in LED production with only two major players involved. One of them, Veeco Instruments Inc., located in Somerset, NJ, received stimulus funding for LED equipment development but is still far behind its German competitor, Aixtron, in market share. If the U.S. continues to fund SSL and attaches more job creation constraints to awards, it has the opportunity to nurture a vibrant manufacturing base to strengthen its economy and reduce greenhouse gas emissions in the process.

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