The Value Position - Sell LEDs to Customers (2)

Besides the basic price tag, the proposition involves maintenance and energy usage.

“In a typical return-on-investment (ROI) drill, the contractor has to explain to the customer what the replacement tradeoffs are over a specified period of time,” said Jim Benson, general manager of marketing at GE Lighting, Cleveland. “Over 30,000 hours, one 10-watt PAR30 LED lamp would be used, costing $42. But for that same timespan, 15 incandescent 45-watt R30 bulbs priced at $4 each would be needed, and 10 halogen 50-watt PAR30 lamps each at $7.50. When you factor in maintenance (frequency of changing lamps) and energy use, then the total cost of ownership is $74 for the single LED, $225 for the 15 incandescents, and $245 for the 10 halogen lamps."

Now, these estimates are based on current pricing levels for the three product types, but to make the case for LED lamps even more convincing, it is expected that, as they gain in marketplace acceptance, their prices will come down.

“LED lamp prices are decreasing, and this will be ongoing,” said Peter Soares, director of consumer channel marketing at Philips Lighting Co., Somerset, N.J. “Last November, we planned to introduce a 60-watt equivalent at $50, but by December, the price was revised to $40, and in those states where utility rebates are available, that could push the acquisition price down to $25.

“In addition, that LED bulb uses 12.5 watts of power and will last 25,000 hours, which is 25 times more than the incandescent it will replace, saving the homeowner $140 over the life of the bulb. When you multiply that by the number of lightbulb sockets in the average home, that really adds up.”

Soares also anticipates that there will be a shift in mindset among homeowners with regard to lighting, and it will begin to be considered a major energy-saving purchase decision along with state-of-the-art windows, heating systems and major appliances, not only for the attractive payback, but as a selling feature if the house is put on the market. Contractors should remind customers of this additional benefit when discussing a changeover to LED lamps.