New Mexico Senator Jeff Bingaman’s office this afternoon sent out a press release hammering the Washington Post’s page-one story on the high cost of the LED light bulb that just won a government prize. Bingaman’s right.
First, the Post doesn’t take into account the savings consumers can expect from an LED bulb over its lifetime compared to using incandescents. Second, it’s probably a bit much to call it “government-subsidized” in the headline when it was developed without government money. Third, a graphic illustrating the story uses incorrect data that says incandescent bulbs cost less than they really do.
Finally, the Post has removed the offending information from its infographic online without posting a correction or otherwise noting anything has changed.
(Let me disclose that my wife works in energy efficiency, though she deals with the industrial sector.)
Here’s the deal: To spotlight LEDs and help speed their development, the Energy Department created a contest called the L Prize, which would award $10 million to the best affordable LED replacement for a 60-watt incandescent bulb.
Philips won the contest with its LED that uses 10 watts of power to kick off the same amount of light as a 60-watt incandescent.
Here’s the Post’s top:
The U.S. government last year announced a $10 million award, dubbed the “L Prize,” for any manufacturer that could create a “green” but affordable light bulb.
Energy Secretary Steven Chu said the prize would spur industry to offer the costly bulbs, known as LEDs, at prices “affordable for American families.” There was also a “Buy America” component. Portions of the bulb would have to be made in the United States.
Now the winning bulb is on the market.
The price is $50.
Fifty bucks? Ouch. It’s a lot of money to pay upfront for a light bulb.
But let’s look at some context, which the Post skims over in its story (a line stuffed in the eighteenth paragraph that says “The new bulbs can cut energy costs by more than 75 percent,” but doesn’t quantify what that means), and which it messes up in its graphic.
According to the Post’s own infographic, the LED is projected to last as long as thirty incandescent light bulbs. At 60 cents a pop, that knocks $18 off the LED’s premium over its lifetime.
And, of course, the whole point of super-efficient lighting is to use much less energy, which isn’t an upfront cost but one that accumulates over time. Bingaman’s office calculates that at 11 cents a kilowatt-hour, Philips’s LED will use about $33 worth of electricity over its lifetime, compared to $198 for incandescents.
That means that $50 bulb will actually cost $133 less than using 60-cent incandescents, plus it will produce far less carbon and other pollutants as a bonus (and perhaps as additional cost savings if there’s ever a carbon tax). And that’s just what the bulb costs now. As LED production ramps up, those costs will go way down.
Bingaman’s office also notes that the Post used erroneous energy costs to calculate the lifetime cost of a bulb. The Post’s graphic implies electricity costs just 1 cent per kilowatt-hour, but the national average is 12 times as much, or 11.8 cents per kilowatt-hour. If you live in New York City, you pay some 26 cents per kilowatt-hour, meaning the LED would save you twice as much. Here’s the original graphic:
Here’s what the Post has on its website now:
It’s good that the Post fixed this. It’s not good that it didn’t flag it to readers.
On the bigger picture, though, you can of course ask why the government is in the business of spending $10 million on a prize to build superefficient light bulbs. And you can say that the upfront cost of such a bulb makes it unaffordable—it clearly does for many or most people. And it’s fair to ask whether the extra few watts this LED saves is worth the extra cost.
But you can’t elide the total cost savings such a bulb will ultimately deliver, especially when that’s its reason for being.
UPDATE: The Post has corrected its graphic, but doesn’t flag the correction to readers.
There are greater troubling issues beyond the price and the cost savings benefits of efficiency.
The problem is that the L-Prize contest which was supposed to foster U.S. green technology competitiveness was RIGGED.
As a foreign based (headquartered) corporation Philips was specifically excluded from eligibility according to the law that established the L-Prize in particular public law 110-140 section 655(f)(1). Under U.S. federal law the term "a primary place of business" used in the statute refers to the single headquarters location, which in the case of Philips is Amsterdam. Philips, of course, would have known that they were ineligible, so they put out PR flak alleging that the bulb was the result of a global effort. The truth is otherwise. The bulb was developed in the Netherlands. Because Dept. of Energy energy efficiency bureaucrats have been hobnobbing with Philips executives for years they apparently decided not to enforce the law.
The L-Prize entry also failed to meet key technical requirements of the contest.
The Philips entry does not meet the stated uniformity requirement of the contest. This is admitted in a document obtained under the Freedom of Information Act, see HTTP://TINYURL.COM/43ECMQM. The curt justification asserted in that document based on comparing uniformity to and standard incandescent lamp is factually (quantifiably) false.
The Philips entry also failed to produce the required amount of light. In one test 62 out of 100 bulbs failed. (See above linked document) Whether the commercialized version will consistently produce the requirement amount of light is an open question, HOWEVER the stated procedure for the contest was that if the entry failed a test the entry would fail. What happened is that Philips wanted to submit prematurely to claim the prize and the Department of Energy did not want to follow the rules and fail them, rather they embarked on RIGGING the contest. They kept the failure secret and proceeded with other tests.
The result is that a bulb developed by Dutch inventors, built with some (possibly most) of its parts made in Shenzhen China (see http://www.dailytech.com/Philips+Wins+10M+USD+Govt+LPrize+for+Worlds+Most+Efficient+Light+Bulb/article24082.htm ) has been given a great initial advantage which may allow it to dominate U.S. competitors, even thought the contest is rigged.
We may wind up with Dutch citizens enjoying social welfare benefits such as vacations for the unemployed, supported by Chinese workers working 12 hours a day and american consumers squeezed by $50 light bulb prices whether they pay that amount at the check out counter or indirectly pay for subsidies through their electric bill.
#1 Posted by Philip Premysler, CJR on Sat 10 Mar 2012 at 11:31 AM
Physics with padikiller:
Energy and work are equivalent. One can be transformed into the other. Expending energy creates work. By theorem.
Now let's move on to economics.
Work makes wealth. It takes work to grow tomatoes, to build bridges or to report on the news.
Ergo, expending energy makes wealth, and so conversely, rationing energy destroys wealth.
The leftist energy non-solution - rationing energy and looking to efficiency to solve our country's energy dependency problem - won't work. We can all drive tinny electric golf carts and we can all take 2 minute tepid showers, but the practical effect of doing so is negligible. A decent standard of living requires large expenditures of energy.
We need more energy. We need to exploit fossil fuels now to stay competitive in the global economy and we need to fund research into alternative energy sources - most particularly nuclear fusion.
Wind and solar just won't get it done. There is no practical way to store electricity efficiently and safely enough to exploit these intermittent energy sources, and the physics involved in battery storage doesn't show promise (witness the Chevy Volt - the latest iteration of electric car stupidity).
Practical nuclear fusion is the long term solution to our energy problem. The top couple of inches of Lake Erie have enough deuterium to exceed the energy in all the oil reserves in the world.
Of course, these pragmatic views, based as they are on physics and traditional economics, fly in the face of Thimbilistic Chittumism - which states that the Gubmint's Energy Fairy can provide for us ad infinitum, as long as we overinflate the tires on our hybrids and buy carbon offset credits.
#2 Posted by padikiller, CJR on Sat 10 Mar 2012 at 11:20 PM
Ergo, expending energy makes wealth, and so conversely, rationing energy destroys wealth.
The leftist energy non-solution - rationing energy and looking to efficiency to solve our country's energy dependency problem - won't work."
I know. It never works in nature. That's why dinosaurs still walk the earth. Big > small 100% of the time! Efficiency is for mice and mammals. Padi physics! It's the law.
http://images4.wikia.nocookie.net/__cb20110507084030/happytreefriends/images/8/8a/Nutty.gif
#3 Posted by Thimbles, CJR on Sun 11 Mar 2012 at 12:56 PM
"Thimbilistic Chittumism"
Really?
#4 Posted by Thimbles, CJR on Sun 11 Mar 2012 at 01:01 PM
An Introduction to Elementary Thimibilistic Chittumism:
Thimbilistic Chittumism is an exciting new school of modern economics, and is already expanding to include several dependent variants, such as the Lieberman and Brainard variants.
Whereas traditional economics is weighted by centuries of data and analysis, Thimbilistic Chittumism is refreshingly devoid of any such tedious academic foundation.
TC is also unburdened by consistency or predictive utility.
For example, traditional economic theory informs that maximum market efficiency is obtained when all parties to a transaction act in their own best interests in a free and voluntary market. TC, on the other hand, teaches us that while markets work best when most workers (excepting bankers, managers, doctors, lawyers, etc) act in self-interest, and when most consumers (excepting news consumers and medical patients) act in self-interest, market efficiency is destroyed when owners or investors act in self-interest.
When the minor inconsistencies (like, for example "what if the workers ARE the owners?" or "what if the investors ARE the consumers?") resulting from this fundamental TC tenet are marginalized and ignored, as they must be, TC theory crystallizes into a promise of endless utopian bliss and harmony.
A major premise of TC is that people who are too lazy to work are entitled to the property and labor of those people who do actually work. This noble societal outcome is primarily achieved through the creation of new "rights".. The "right" to somebody else's Band-Aids and birth control pills, the "right" to force somebody else to teach one's kids and the "right" to somebody else's steak and Snickers Bars, for example.
However, without a doubt the most intriguing aspect of Thimbilistic Chittumism lies in its application. While businesses that find themselves beholden to antiquated traditional economic theory slavishly devote misspent energy to analysis and evaluation of market conditions, proponents of TC are liberated from any such rigor.
Whereas a typical business might, for example, devote thousands of dollars and several months to a study of employee compensation, and integrate this study into a more complex and never-ending study of its ongoing business practices, a TC proponent merely pulls an arbitrary wage increase from his posterior and finishes the job with 500 words of digital copy tapped into life in a Seattle Starbucks.
A crucial TC component is reliance upon the force of law to secure the transfer of wealth. The government can do things better than the free market can, according to Thimbilistic Chittumites. The response to failed regulation is always more of it.
Finally, Thimbilistic Chittumism is unbound by history. Such an optimistic, forward-looking approach obviates the need to consider the sheer, abject and utter failure of similar economic theories in every single instance in which they have ever been applied anywhere on Earth. TC is thus entirely unconcerned with oppression, repression, starvation, incarceration, stagnation or other such diversionary bugaboos.
#5 Posted by padikiller, CJR on Sun 11 Mar 2012 at 02:26 PM
As once was said to Wittgenstein:
http://www.dead-philosophers.com/?p=422
"Are you still talking?"
#6 Posted by Thimbles, CJR on Sun 11 Mar 2012 at 11:24 PM
I see padi knows as little about atomic physics as he does about economics.
But wake me up when you have 'practical nuclear fusion,' padi.
It isn't as if the gummint hasn't wasted billions on that, although for some reason padi has not posted dozens of content-free opinions deploring that.
#7 Posted by Harry Eagar, CJR on Mon 12 Mar 2012 at 05:22 PM