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LEDs Still a Mystery to Many Contractors

April 20, 2015
As LED products continue to flood the marketplace, electrical contractors must balance the appeal of online buying expedience with the need to fully grasp a technology still shrouded in uncertainty.

Held up as one of the proven, readily deployable technologies that could put a big dent in global energy consumption over time, LED lighting products are drawing the interest of ever more electrical contractors looking for avenues into the lucrative and growing energy-efficiency market.

Enjoying full-throated support and promotion from the federal government — notably via the U.S. Department of Energy’s (DOE’s) Office of Energy Efficiency & Renewable Energy — LEDs continue to reap benefits through utility and governmental subsidy programs as well. The technology is also a likely benefactor of predictions that the energy services company (ESCO) business is poised for more growth.

Simon Bratt/Hemera/Thinkstock

Even as other established lighting technologies are refined and improved upon, LEDs have been anointed the clear leader in next-generation technologies that offer the best path forward in lighting. DOE says LED lighting sales based on lumen-hours are on track to account for 48% of all lighting sales by 2020, up from 3% in 2013. But as much as LED technology has improved and matured in recent years — and despite the impressive commercial inroads that have been made — it still holds mysteries on par with that of other newly introduced products, especially for contractors who haven’t closely tracked its evolution. In many respects, the growing LED lighting market has a “Wild West” feel to it — where clear, objective quality standards have been slow to take shape, and buyers may lack the information needed to vet the quality, suitability, and reliability of products and suppliers.

That might not be readily evident, looking solely at the supply picture. Judging from their ample availability through a growing network of manufacturers and distributors, LED lighting solutions might be judged fully proven and reliably deployable. Easily purchased through numerous online channels, as well as through brick-and-mortar retailers and electrical products wholesalers, LED lamps, drivers, and controllers have an established and growing market presence that, when taken at face value, might instill confidence and certainty among buyers.

Instead, however, the ubiquity of LED products, despite a slow concentration of more power into the hands of fewer big sellers, may actually constitute a red flag of sorts for buyers. While the sellers’ ranks are being culled some, the still-formative LED market is one marked by relative ease of entry. The door remains mostly open to suppliers peddling cheaper products of varying and even questionable quality and reliability, posing a very real threat to both uninformed buyers and even the growth trajectory of the LED market.

Factor in the persistent difficulty buyers have in assessing quality and intelligently comparing and contrasting products from different sources, and it’s clear that the market for LED products more than ever demands discerning, educated, and fully engaged buyers. When those two realities collide in a developing and changing market — opportunistic sellers and many new, eager, and novice buyers — it’s a recipe for confusion and dissatisfaction.

Nagging uncertainty

That’s where many LED buyers find themselves today as they struggle with the core problem of uncertainty. Unsure of everything from expected real-world energy savings to the quality and power of the light to the reliability of the warranty, many still navigate the market tentatively, lacking the full confidence they’re getting exactly what they and their customers need at the best price.

Peter Argyropolous, owner of Petros Electric, a Lancaster, Pa., contractor, regularly struggles to find the right LED solutions for clients. One of the big obstacles he faces is understanding the varying light quality of different products. His suppliers generally don’t offer samples that would help him economically evaluate different alternatives. If they do, restocking fees come into play for returned products.

“There may be 50 options for under-cabinet lighting, but each produces a slightly different color rendering,” he says. “I’ve seen it happen where an LED light is put in, and the kitchen countertops turn a puke green color under the light. Then the customer wants them ripped out. If I’m not able to show a sample, I can get myself in trouble.”

An equally burdensome problem, he says, stems from the exclusive arrangements many suppliers maintain with manufacturers, whose product lineups can vary widely. If he’s looking for an LED with certain specifications and his supplier’s LED source doesn’t make it, he’s sometimes forced to go online in search of the product, which can amount to even more of a “crapshoot” scenario.

Some six years into the LED era, for example, buyers still struggle to understand how incandescent, HID, and compact fluorescent wattage values translate to LED products. Bill Wedge, owner of Wedge Electric, an Orange, Calif., contractor, says it’s not as easy as it probably should be at this stage to find comparable output information. Some manufacturers provide such information; others don’t.

“I think it should be more clear,” he says. “Each manufacturer should have an equivalency chart — something to gauge your light selection because a lot of times the LEDs are brighter than the standard lights you’re replacing or that others are offering. Maybe there’s an outdoor light, a wall-pack type fixture, and maybe the person has a 175W lamp in an existing HID light, and they want to go LED. A lot of the manufacturers may say something, for instance, is equal to a 250W or a 100W. Well, is there a direct replacement? If there’s not a chart, give me a formula.”

Fig. 1. More than half of EC

The online enticement

The challenge of fully understanding LED lighting ahead of purchasing isn’t preventing buyers from taking their search into the online realm, where clear-cut answers may arguably be even harder to come by. A recent EC&M survey of 543 small electrical contractors’ purchasing practices found that 56% of respondents who answered a specific question about online purchasing of LED products have actually done so (Fig. 1). An additional 27% said they haven’t but are “likely” to do so in 2015. Only 17% said they had never bought online and had no plans to start. For respondents answering affirmatively to buying LEDs online, close to two-thirds indicated they’d only been doing so for a year or less (Fig. 2), while 36% noted they’d started this practice over the last two to four years.

Fig. 2. The vast majority of respondents to an exclusive EC

One survey respondent, George Torres, owner of Chili Electric, Los Lunas, N.M., went the online route after he couldn’t find satisfactory under-counter LED lighting for a customer or sufficient knowledgeable assistance through his local electrical suppliers. After an exhaustive search, he purchased LEDs, power supplies, and connecting hardware from an online vendor that turned out to be satisfactory.

“My local electrical houses have a limited amount of LED product; they’re still looking to sell conduit and the wire and fittings; the trim stuff is a secondary concern,” he says. “If they do have it, they’re locked into a very narrow band of products. And, if you have questions, they’re not trained enough to give you a detailed answer.”

Torres ended up taking LED education into his own hands and soon realized it was a steep learning curve — one that was complicated by a lack of good go-to sources of information.

“It’s like looking for a needle in a haystack that might be there, but until you ask the right questions and look in the correct spot, you won’t find it,” he says.

Contrary to his own reservations about buying LED products online, Tom Kristoff, owner of Kristoff Electric, Ravenna, Ohio, went that route when he needed to find LED lighting for a pool enclosure. Stymied in his efforts to find the product through his local suppliers, he found the special 2-foot LED fixture he needed through an online supplier.

“My local suppliers don’t stock a lot of LEDs for unusual applications like this, so I sometimes have to shop online,” he says. “Generally, though, I don’t buy online because I want to stick with brands I know and trust. People are calling me all the time trying to sell me LED products, but I don’t know who they are.”

Search for answers

Given the growing number of products and manufacturers in the market and the emerging applications for LED lighting, Kristoff says he’d like a supplier base that could offer better selection. Equally valuable, he says, would be general information on LED lighting products and applications.

But such on-site training and education, perhaps sponsored by manufacturers, is not presently a prime source of LED information for most contractors (click to see Fig. 3). Only 15% of the contractors surveyed by EC&M said they’re getting their LED training from “on-site manufacturer classes/seminars.” Only “trade associations” and “third-party training” were named by fewer respondents as sources. But contractors are looking to suppliers for information, only in different formats. Fifty-four percent included “electrical distributors” as a source of information, second only to “trade publications” in mentions. “Online from the manufacturer” was marked by 38%, while 31% identified “electrical industry web sites” as sources of information, suggesting the online realm, in general, is a fairly trafficked destination for contractors hunting for LED knowledge.

But the steady emergence of an online marketplace for LED lighting is being driven by the same practical considerations that drive contractors’ general purchasing behavior. Knowledgeable or not, contractors are looking to online sources simply because they see them as a source of prospective value. Of 172 contractors who replied to the survey question about their prime motivation for online LED product purchasing, “price” was identified by the most at 40% (Fig. 4). “Selection” was the prime reason for 35%, while “convenience” was the top reason for 22%. Far down the list were delivery time and warranty considerations.

Fig. 4. Although price topped respondents’ list as the primary reason for purchasing LEDs online, selection came in a close second.

As alluring as the online marketplace can be for LED buyers, it holds more than a few pitfalls, especially for the uninitiated. Those low online prices so many apparently seek can mask issues of quality, suitability, and warranty protection that can come into play if a buyer lacks up-front knowledge.

Those cautions hold true for offline purchases as well, but the ease of buying online may amplify those concerns. Sources of supply are extensive and varied, spanning lighting specialists, Big Box retailers, and general merchandise vendors. Of seven sites listed in the EC&M survey, more selected Econolight.com (50%) and Amazon.com (39%) as preferred web sites for purchasing (Fig. 5). The Home Depot’s site came in with 27%; 1000bulbs.com was identified by 21%; and the Lowe’s site was named by 17%. Fastenal and Grainger were named by the fewest respondents.

Fig. 5. Several industry websites were preferred by respondents, with econolite leading the pack.

The buyer’s challenge

The DOE’s LED lighting guru, Jim Brodrick, lighting program manager for the agency’s Office of Energy Efficiency and Renewable Energy’s Building Technologies, says LED lighting, despite its steady rise, remains a challenging area for many buyers.

The flip side of extensive and growing availability of LED products and falling prices is the disconcerting ease of choosing the wrong product, either for the specific application or as measured by various quality factors.

“It’s very difficult to distinguish the low-cost, poorly designed luminaire from the more expensive product that offers excellent performance,” Brodrick says. “The contractor must understand the technology sufficiently to be able to convince the facility manager or building owner why the least expensive LED luminaire is often not the best.”

The two most important considerations that LED product buyers have today, he says, are matching the right product to the application and making certain they can rely on the supplier for service and support (see Market Mechanics Matter as Much as Good Buy). That holds true whether product is bought online or at a brick-and mortar-outlet, but the more shadowy online environment can leave buyers more exposed.

Bernie Erickson, Northeast regional manager for lighting contractor Facility Solutions Group, Austin, Texas, says with so many suppliers clamoring to bring LED products to market it pays to be wary.

“I get tons of blast emails every day from no-name companies saying ‘buy my lamp for X number of dollars,’” he says. “They’re trying to beat everyone down on price, but they may be rushing product to market. Many companies offering 10-year warranties have only been in business two years.”

Yet the EC&M survey found that online LED buyers don’t seem to be having bad experiences with product support, narrowly defined. Of 175 contractors responding to a question about warranties, 95% said they’ve had no trouble with online sellers honoring the warranty on products (Fig. 6).

Fig. 6. Nearly all of respondents indicated that they had not had trouble with Internet suppliers honoring the warranty on LED products they purchased online.

When asked what types of LED products they purchase online, 98% named lamps, 41% indicated drivers, and 25% selected controllers (Fig. 7). Out of 26 product categories presented, not surprisingly, survey respondents were far and away most likely to buy luminaires (62%) than any other electrical product (Fig. 8).

Fig. 7. Lamps were far and away the leading product contractors bought online, followed by drivers and controls.

Online sourcing has opened up new opportunities for discriminating LED buyers, but its use may skew toward price-conscious smaller contractors starting to dabble in the market or those willing to throw the dice on a deeply discounted product. For larger contractors deriving substantial revenue from large-scale lighting installation or retrofit projects, the main sources of supply may be traditional distribution channels or manufacturer-direct arrangements.

Fig. 8. Out of 26 product categories, contractors were most likely to purchase luminaires (62%) online, followed by circuit breakers (47%) and test equipment (40%).

Jim Totzke, executive vice president of operations at Menasha, Wis.-based electrical contractor, Faith Technologies, Inc., says the company now buys LED lighting products from just a few proven sources. Over time, the company’s lighting retrofit group has identified suppliers who can best meet their needs on a range of measures. They’ve produced solid relationships that yield attractive pricing, timely product deliveries, and opportunities to stay on the cutting edge of LED product development.

“We’re to the point now where we have made relationships with suppliers that we know we can trust with this product,” Totzke says. “Having someone you can rely on to get you the fixtures, ballasts, and other components you need exactly when you need them is vital in our industry.”                                                   

Zind is a freelance writer based in Lee’s Summit, Mo. He can be reached at [email protected].

About the Author

Tom Zind | Freelance Writer

Zind is a freelance writer based in Lee’s Summit, Mo. He can be reached at [email protected].

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