Don’t Let the Dim Bulbs Prevail in the Lighting Market

By Kennedy Maize

In journalism, we call it “burying the lead.” That’s what the New York Times did in a Sept. 25 story headlined “Build a Better Bulb for a $10 Million Prize.” The story said that the U.S. Department of Energy is prepared to pay $10 million for development of an efficient, cost-effective replacement for the venerable, everyday 60-W incandescent light bulb.

That’s interesting, but the real story is that the government is now admitting, after more than 25 years of hype, that the compact fluorescent light bulb (CFL) is a failure. This is despite a major marketing effort by the government, designating the CFL bulb as an “Energy Star” product, worthy of purchasing by those consumers who want to be “green.” At the urging of federal and state governments, many utilities are subsidizing purchase of CFL bulbs (including a clumsy, embarrassing program from Allegheny Energy two years ago, sending the bulbs to its customers without properly informing them that the cost of the lightbulbs would be added to their bills).

DOE has now admitted that CFLs won’t meet the needs of most consumers. The market has also demonstrated this fact. Consumers aren’t buying the more expensive CFLs. In a separate article in the Times (Sept. 28), the head of DOE’s Energy Star program wrote to the lighting industry that sales of CFLs were plummeting, down 25% from 2007 figures. Richard Kearney wrote that “it’s apparent that the market is heading in the wrong direction.” His prescription: more subsidies for the politically-correct bulbs. Wrong choice.

DOE’s new $10 million “L Prize” program demonstrates the problems with CFLs and the government’s brainless response to market failure. DOE has specified that the winner of its $10 million light bulb sweepstakes must provide the same amount of light and color, produced by the old-fashioned 60-W Edison incandescent bulb; it must use only 10-W of power, last 25,000 hours; 75% of the bulb must be made in the USA (a clear sop to union labor).

The article in the Times noted that consumers “rebelled against the (CFL) bulb’s shortcomings: the light output from compact fluorescent bulbs was cold and unpleasant, their life was much shorter than claimed, many were large and undimmable, they would not work in cold environments, and they contained polluting mercury.” My artist wife, a major consumer of cable TV home makeover shows, noted that she had never seen an interior designer recommend CFLs as part of a remodeling job.

In short, CFL’s are a classic market failure, which DOE is now trying to address by more market intervention. It won’t work.

The agency faces a real problem. In 2007, a feckless Congress, aping command-and-control economies in Europe, mandated a phase-out of incandescent bulbs by 2012. It was a classic example of legislative stupidity.

What to do? DOE’s response: try to find a technological winner, as decided by a panel of Washington bureaucrats, and impose that on the marketplace. That’s where we are now.

My guess is that nothing the light bulb makers – Phillips, GE, and Osram Sylvania – can come up with will satisfy consumers used to cheap, effective, if inefficient, Edison bulbs. The inefficiencies, in aggregate in the total economy, may be great, but they don’t translate to an average household.

The result, initially, will be a thriving black market for incandescents (stockpile now, boys, for sales later), followed by a repeal of the provision in the law.

My advice is that the government should do absolutely nothing, and then go back to Congress to argue that the legal requirement was ludicrous, and government should let people make their own decisions about light bulbs. Any other course of action is, well, dim-bulbism.