Obama Provides More Tailwinds for LED Lighting Manufacturers

One of Barack Obama's points in his stimulus package speech last Thursday was about making 75% of federal government buildings more energy efficient. It was a line that was easy to pass over as high-minded politician-speak but making all those government buildings "more efficient" could be as easy as changing the light bulbs. It reminded me of something that Jon Najarian was talking about a week earlier. See the video here. To recap some of the energy efficient and green characteristics of LED (Light Emitting Diode) bulbs....

• They use 40-70% less electricity according to the LED City Project.
• On average they burn up to 70,000 hours as compared to a life span of only 20,000 hours with more traditional incandescent or fluorescent bulbs.
• They put-off less heat and therefore a building's air conditioning system can provide cooling more efficiently while using less electricity.

Obama also should love the idea because LED bulbs are environmentaly friendly for two reasons.

1. There are likely to be changed far less often.
2. Traditional flourescent bulbs contain mercury and are treated as hazardous waste when it comes time to get rid of them. LED bulbs contain no mercury and are thus friendlier to the environment and hazardous disposal fees don't apply.

The two companies that Jon Najarian recommended for a bullish play on the future of LED lighting are Philips Electronics (PHG) and Cree, Inc. (CREE). To show that the market is catching on to the up-side possibilities, PHG and CREE both recently broke above their 50 day moving average.

If you have a preference to support American companies, Cree is based in North Carolina while Philips is based in Amsterdam. A recent press release by Cree highlights an upcoming project that will see 4,200 of their LED light fixtures installed in a section of the Pentagon that is undergoing renovation.

In choosing between the two companies, I would have to lean towards an investment in Cree because of the Pentagon project that they will soon have under their belt. More federal government buildings, potentially thousands more, seem to be a realistic new market for Cree now thanks to the new administration's upcoming stimulus package.

Disclosure: No position held

Comments

[kodiakaa:]

Here is a company that makes solar powered street lights using LEDs: www.solarlighting.com/, and American company in Florida.

Replacing streetlights or installing solar powered LED streetlights instead of conventional lights at government facilities could be one of the "shovel-ready" projects that would fit in the stimulus plan...

Jan 11 10:17 AM

[IST:]

If you are looking for highly efficient LED lighting and drivers, go to istl.com

Jan 11 04:31 PM

[personl:]

Lots of this stuff in Canada too. Try LightPowercanada

Jan 11 06:42 PM

[IU12:]

If you did any research at all before posting this, you'd see that Philips Lumileds is the company you are referencing (a subsidiary company of Philips Electronics) which is based in San Jose, California (USA!!!).

Jan 12 03:58 AM

[Glenn McSpa...:]

Pull up PHG's profile on Yahoo Finance and their address is Amsterdam.... See here finance.yahoo.com/q/pr...


On Jan 12 03:58 AM IU12 wrote:

> If you did any research at all before posting this, you'd see that
> Philips Lumileds is the company you are referencing (a subsidiary
> company of Philips Electronics) which is based in San Jose, California
> (USA!!!).

Jan 12 08:45 AM

[1poordog:]

Is there any movement towards LED lighting to replace the incandesant bulbs in the home?... I dislike the light intensity/color from the newer long life-neon tube bulbs on the market. And the retail homeowner would be a far larger market.

Jan 12 11:19 AM

[kertch:]

Aside from where these companies are headquartered, I would choose CREE over Phillips simply because it's a mid-sized company with 90% of its revenues comming from LED sales. Phillips, being a large electronics conglomerate, will have revenues suffer in other areas such as consumer electronics. If you think the LED lighting business will pop, choose a company that specializes in LEDs. Only a small portion of Phillips' revenue comes from LED sales. Why saddle yourself with the rest of thier busness?

Jan 12 01:59 PM

[Detroit Guy:]

A company here in Michigan, ilumisys, is doing good work in the area of replacing fluorescents with LEDs ilumisys.com

Jan 12 04:15 PM

[Universal H...:]

Obama? Obama gives a speech and his name leads the headlines... but he can't really DO anything, yet. Meanwhile, it's the current Administration that actually implemented the energy efficiency measure at the Pentagon- the more accurate title to this article should be "Bush Provides More Tailwinds For LED Lighting Manufacturers"! I know about 500 liberal investors probably just fought back a gag reflex, but let's give credit where it's due.

It's a tough world for Green Conservatives!

Jan 12 04:34 PM

[Glenn McSpa...:]

point taken. I give Bush full credit for the pentagon project.


On Jan 12 04:34 PM Universal Huckleberry wrote:

> Obama? Obama gives a speech and his name leads the headlines... but
> he can't really DO anything, yet. Meanwhile, it's the current Administration
> that actually implemented the energy efficiency measure at the Pentagon-
> the more accurate title to this article should be "Bush Provides
> More Tailwinds For LED Lighting Manufacturers"! I know about 500
> liberal investors probably just fought back a gag reflex, but let's
> give credit where it's due.
>
> It's a tough world for Green Conservatives!

Jan 12 10:03 PM

[User 336489:]

Flourescent? Are they making light bulbs out of wheat? Perhaps you mean fluorescent?

Jan 13 11:35 AM

[timbball:]

It's outlined in Bush's Energy Independence Act of 2007 that incandescent lightbulbs are being phased out starting in 2012. Europe is starting the same thing this year.

en.wikipedia.org/wiki/...


On Jan 12 11:19 AM 1Poordog wrote:

> Is there any movement towards LED lighting to replace the incandesant
> bulbs in the home?... I dislike the light intensity/color from the
> newer long life-neon tube bulbs on the market. And the retail homeowner
> would be a far larger market.

Jan 26 08:00 PM

[Tina Mao:]

China LED lighting factory, jlfgd.com,we are professional manufacturer of LED Lighting product.

Feb 27 01:41 AM

[Jonathan Ro...:]

LED lighitng is one step in the right direction, but outright grid-independence is a tremendous leap. Where new constrcution is concerned, the cost/benefit is tremendous when the cost if infrastructure is mitigated. In the retrofit scenerio, it is very localized as to cost/benefit, credits, and payback. The fact is that solar lighting is more efficient, and if done correctly, by taking into consideration issues including IESNA and LEED parameters for efficient lighting, it can be of tremendous value to any municipality going green. Feel free to check out solarpathusa.com for more information.

Mar 05 09:25 AM

[Jonathan Ro...:]

solarpathusa.com - Misspelled in previous comment.

Mar 05 09:28 AM