1. Next Generation Lighting Webinar Next Generation Lighting Webinar November 30, 2010

2. Next Generation Lighting Webinar Sample clients About

3. Next Generation Lighting Webinar About the Presenter Laura Moorefield, LC Senior Manager, Policy & Research This presentation is drawn from talks that Laura and Chris Calwell (Ecos founder and Senior Research Fellow) have delivered across the country over the past two years, and most recently, at the October 4-5, 2010, ENERGY STAR Partner Meeting in Denver.

4. Next Generation Lighting Webinar Key Topics Addressed How will new federal laws affect the residential lighting market? How will the mix of lighting technologies change in the near term? How should utilities shift their focus to achieve the greatest net energy savings cost-effectively? Utilities can continue to run cost-effective residential lighting programs before and after the new federal laws take effect. The main take-away

5. Next Generation Lighting Webinar Utility CFL Programs Have Made Tremendous Strides Utilities have paid rebates on hundreds of millions of CFLs nationwide since the early 1990s, saving billions of kWh At least 109 U.S. utilities are currently running lighting programs, with a total budget of more than $252 million. More than 90% of consumers are now aware of CFLs About 70% of national households now contain at least one CFL CFLs have achieved a national socket share of about 16% and represent about 20-25% of screw-based general service bulb unit sales Roughly 3,000 qualifying general service CFL models listed on the ENERGY STAR website CFLs have become far smaller, more widely available, and more affordable – now commonly available in many types of stores for $2 to $5 apiece without utility rebates

6. Next Generation Lighting Webinar But, the Market is Not Transformed CFL socket saturations are as high as 20-30% in some parts of the country, depending on how we measure it. Source: NMR Group Inc, "Final CFL Modeling Report" (2010)

7. Next Generation Lighting Webinar News of the Incandescents Death Has Been Greatly Exaggerated…

8. Next Generation Lighting Webinar What Will EISA Really Do? EISA does not ban incandescent technology; it sets minimum efficiency requirements for lamps. Many halogen incandescent lamps are available today that pass EISA. Phases in Tier 1 efficiency requirements for 40 – 100 W general purpose (household) lamps starting in 2012 Provides weaker requirements for modified spectrum lamps Exempts 5 lamp types unless sales increase substantially: Includes provisions for a tougher Tier 2 in 2020 Requires review and update of current FTC lamp labeling Allows Nevada & California to enact EISA one year early, or to keep existing state standards in place - 3-way lamps - Rough service lamps - Shatter proof lamps - Vibration service lamps - 2,601 – 3,000 lumen lamps

9. Next Generation Lighting Webinar EISAs General Service Incandescent Lamp Standards EISA Effective Dates Power (watts) Light Output (lumens) Efficiency (lumens/watt) Std. Incan. EISA Maximum Std. Incan. EISA Ranges Std. Incan. EISA Minimum 1/1/20121007216901118 - 260016.915.5 – 36 1/1/201375531170788 - 148915.614.9 – 28 1/1/20146043840563 - 104914.013.1 – 24 1/1/20144029490232 - 74912.38.0 – 26 The way the EISA law is drafted requires manufacturers to reduce wattage, but allows them to greatly reduce light output as well, particularly with modified spectrum bulbs. As a result, many of the incandescent bulbs sold after EISA takes effect will be far dimmer and similar in efficiency to the standard soft white incandescent bulbs sold today. Utilities can help pull the market toward better choices than these minimally compliant bulbs.

10. Next Generation Lighting Webinar Emerging Technologies Offer More Energy-Efficient General Service Lighting Options

11. Next Generation Lighting Webinar New Incandescents are Not Created Equal: Comparison of EISA Compliant 100 W Equivalent Lamps Barely EISA MS Compliant 72 W, 1250 lumens 17.4 lm/W Barely EISA SS Compliant 72 W, 1490 lumens 20.6 lm/W 2x Incandescent 50 W, 1600 lumens 32 lm/W Visible light transmitted Infrared light reflected, absorbed by filament Source: ADLT Todays 100 W lamp: 1690 lumens, 16.9 lm/W (not EISA compliant)

12. Next Generation Lighting Webinar Amazon.com Customer Comments On EISA-Compliant EcoVantage Modified Spectrum Lamps I have been looking for energy saving light bulbs that don't have mercury - EcoVantage is the answer. The light quality is similar to what I use now and I like the fact that I'm saving on my electric bills. I would recommend this product to anyone looking for an energy saving alternative to CFL's. I love these bulbs! They are so bright. I hate those twist bulbs but wanted to switch to something that is energy saving. I love that they don't have mercury - I really feel like I am doing something for the environment! Lamp reviewed: 630 lumens, 43 W, 14.65 lm/W –Advertised as 60 W equivalent Todays 60 W typical soft white: 840 lumens, 14 lm/W

13. Next Generation Lighting Webinar EISA Shifts the Baseline and Presents New Program Challenges For a long time, the story has been very simple: CFLs good. Incandescents bad. Now the consumer education story is more complicated, but also more honest: there is no one right lighting technology for every application. We need a portfolio of options for different applications and customer needs. Implications: –Net savings from each rebated product will be smaller, but incremental costs will go down –Is a shift to specialty CFLs a move in the right direction? –Residential lighting programs will still cost less than generating electricity –Net to gross ratios for CFLs vary enormously today and may get worse.

14. Next Generation Lighting Webinar New FTC Labels Address Lumen Output & Energy Costs, but Not Wattage Equivalency 14 New Front Package Label New Back Package Label Existing FTC Label

15. Next Generation Lighting Webinar New Lamp Wattages and Wattage Equivalence Claims Are Proliferating

16. Next Generation Lighting Webinar Education Will Be Needed to Help Consumers Choose Bulbs Based on Lumens, not Watts Consumer is trying to replace: WattsLumensTechnology 60800Incandescent Options in store (2014): WattsLumensTechnologySavingsResult 8800LED52 W Maximum achievable savings 13800CFL47 W Much more savings than required by EISA, same amount of light. 43800IR Halogen17 W This is what EISA intended. Same light output, lower wattage. 531100Halogen7 W Less savings than intended, more light than is needed. 53 72 600 800 Modified Spectrum Halogen 7 -12 W Less savings than intended, not enough light. Customer may upgrade to brighter bulb, using more energy ?

17. Next Generation Lighting Webinar Australias New Consumer Education Approach

18. Next Generation Lighting Webinar U.S. DOEs New Consumer Education Approach

19. Next Generation Lighting Webinar Program Options for Replacing Todays 60 W Incandescent Bulbs – The Portfolio Approach Todays incandescent bulbs: inefficient but inexpensive Todays CFLs: more efficient than incandescent bulbs, but behave differently and cannot substitute for all lighting applications EISA cuts power use by about 30% Compliant bulbs already on the market, but dimmer than standard incandescents Improved CFLs and LEDs could yield even greater savings Super-efficient, bright incandescents could fill the gap between CFLs and lamps that just barely meet EISA

20. Next Generation Lighting Webinar Emerging Technologies Offer More Energy-Efficient GSL Replacement Options CFLs LEDs 2x Incandescent

21. Next Generation Lighting Webinar 2010 2009 Technology Projections* * Based on DOE SSL R&D Multi-Year Roadmap (Cool White/Warm White ranges) 2015 2012 General Service LEDs are Getting Brighter and Meeting DOEs Efficiency Targets 60 W Eq. 75 W Eq.

22. Next Generation Lighting Webinar Watts Saved by Various Replacement Technologies Before and After EISA 2010 201120122013 2014

23. Next Generation Lighting Webinar Utilities Use a Wide Range of Assumptions to Calculate CFL Program Cost Effectiveness NTG table source: U.S. DOE, 2010, ENERGY STAR CFL Market Profile Costs Per CFL Benefits Per CFL Incremental Cost Hours/ day Watts Saved Measure Life (Years) Net to Gross Ratio Lifetime Savings (kWh) National Range<$1.00 - $3.001.9 – 338 – 521.3 – 100.19 – 9.17<100 – 500+

24. Next Generation Lighting Webinar Modeled Program Costs for Lifetime kWh Savings Note: Utility costs/kWh are total program costs divided by lifetime savings; they are not levelized costs. 4.0 ¢ / kWh 2.0 ¢ / kWh 1.0 ¢ / kWh 0.5 ¢ / kWh

25. Next Generation Lighting Webinar Putting Efficiency Program Costs in Context Program TypeApproximate Costs Todays CFL Programs0.5-1.0 ¢ / lifetime kWh saved Future CFL or LED Programs (estimated) 1.5-2.5 ¢ / lifetime kWh saved National Average for All Residential Efficiency Programs 3 ¢ / lifetime kWh saved Typical Operating Costs for Existing Power Plants 3 - 5 ¢ / kWh generated New Natural Gas Power Plants (no CO 2 capture) 5 - 7 ¢ / kWh generated CFL or other residential lighting efficiency programs after EISA may cost more than they do today, but are still likely to cost less than other utility-run efficiency programs and power plants.

26. Next Generation Lighting Webinar How Much Lighting Energy Can Be Saved in a Typical House? -16% -51% - 16% - 51%

27. Next Generation Lighting Webinar Conclusions EISA does not ban incandescent bulbs Utilities can continue to run cost-effective residential lighting programs before and after the new federal laws take effect Confusion about the new lighting technologies will be high – consider shifting some of your incentive budgets to consumer education Next generation lighting programs will include a mix of technologiesCFLs, LEDs, 2x incandescents, and perhaps othersthat will meet the wide variety of consumer needs New technologies and program approaches can cut residential lighting energy use in half over the next decade – saving more energy than CFLs have saved over the last 20 years

28. Next Generation Lighting Webinar Contact Information Ted Schultz SVP Strategy & Innovation Charlotte, NC tschultz@ecosconsulting.com M 704-905-4305 Visit our Next Generation lighting site www.ecosconsulting.com/nextgen Questions and Answers Laura Moorefield Senior Manager, Research & Policy Durango, CO lmoorefield@ecosconsulting.com T 970-259-6801 ext. 310

29. Next Generation Lighting Webinar Extra Slides

30. Next Generation Lighting Webinar CFL Imports Have Rebounded after Sharp Declines during the Economic Downturn in 2008 and 2009 Data Source: USA Trade Online Source: Ecos Analysis of USA Trade Online Data 2010 set record for highest imports in 1 st half of year