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Buildings and Cities

LED Lighting (Commercial)

The origin of LEDs (light emitting diodes) dates back to the 1874 invention of the diode—a crystal semiconductor. Under certain conditions, diodes emit light. In 1994, three Japanese scientists invented high-brightness LED bulbs, for which they were awarded the Nobel Prize in Physics in 2014.

LEDs work like solar panels in reverse, converting electrons to photons instead of the other way around. They use 90 percent less energy than incandescent bulbs for the same amount of light, and half as much as compact fluorescents, without toxic mercury. On top of that, an LED bulb will last much longer than either other type.

Lighting accounts for 15 percent of global electricity use. LEDs transfer 80 percent of their energy use into creating light—rather than heat, like older technologies—and reduce electricity consumption and air-conditioning loads accordingly. LED streetlights can save up to 70 percent of energy and significantly reduce maintenance costs.

The question about LEDs is not whether they will become the standard in lighting fixtures; it’s when. The price (per watt equivalent) is two to three times higher than incandescents or flourescents, but falling rapidly. Virtually any bulb currently in use can be replaced by LEDs.


diodes emit light…observed in 1907: Zheludev, Nikolay. “The Life and Times of the LED—a 100-year History.” Nature Photonics 1, no. 4: 189-192; Schubert, E. Fred. 2014. Light-emitting Diodes. Cambridge: Cambridge University Press, 2007.

1960s…commercial applications: Zheludev, Nikolay, “Life and Times”; Schubert, E. Fred. Light-emitting Diodes. Cambridge: Cambridge University Press, 2014.

Nobel Prize in Physics in 2014: Overbye, Dennis. “American and 2 Japanese Physicists Share Nobel for Work on LED Lights.” New York Times. October 7, 2014.

LED [vs.] incandescent [vs.] compact fluorescent: Pimputkar, Siddha, James S. Speck, Steven P. DenBaars, and Shuji Nakamura. “Prospects for LED Lighting.” Nature Photonics 3, no. 4 (2009): 180-182. 2009.

80 percent of…energy use [for] creating light: Pimputkar et al, “Prospects.”

kerosene lamps…emissions: Lam, Nicholas L., Yanju Chen, Cheryl Weyant, Chandra Venkataraman, Pankaj Sadavarte, Michael A. Johnson, Kirk R. Smith et al. “Household Light Makes Global Heat: High Black Carbon Emissions from Kerosene Wick Lamps.” Environmental Science & Technology 46, no. 24 (2012): 13531-13538; Meaker, Morgan. “The Developing World Faces a Silent Killer. Could a $1 Solar Light Help?” The Guardian. March 1, 2016.

“A sixth of humanity…[vs.] the electrified world”: Mills, Evan. “Can Technology Free Developing Countries from Light Poverty?” The Guardian. July 30, 2015.

India…1 million solar lighting systems: REN21. Renewables 2016 Global Status Report, Paris: REN21 Secretariat, 2016.

lighting…global electricity use: Neslen, Arthur. “Plan for 10 Billion Ultra-Efficient LEDs Lights Up Paris Climate Summit.” The Guardian, December 7, 2015.

view all book references

Technical Summary

LED Lighting (Commercial)

Project Drawdown defines LED lighting (commercial) as: the use of efficient light-emitting diodes (LEDs) in commercial buildings. This solution replaces conventional commercial lighting solutions (bulbs, ballasts, and systems), such as incandescent or fluorescent lighting.

LED lighting offers great potential to reduce greenhouse gas emissions in commercial lighting. This is not only due to the high luminous efficacy [1] of LED lighting, but also due to the size of the lighting sector in commercial buildings. Traditionally, there have been four types of light source technologies used in commercial lighting: linear fluorescent lamps, compact fluorescent lamps, incandescent lamps (including halogen lamps), and high-intensity discharge lamps. Globally, linear fluorescent lamps have traditionally been the most widely used, at approximately 75 percent of installed lighting. However, this is expected to change, as LED lighting products (lamps and luminaires [2]) penetrate the market.

Project Drawdown’s LED lighting (commercial) solution takes into account the entire luminaire, including the light source, the control gear, and the luminaire housing. The luminous efficacy of the entire luminaire indicates that LED luminaires are more energy-efficient than conventional technologies. Global estimated average luminous efficacy for all commercial luminaires is: 94 lumens per watt for integrated LED luminaires; 56 lumens per watt for LED luminaires with replaceable LED lamps; 61 lumens per watt for linear fluorescent lamp luminaires; 42 lumens per watt for compact fluorescent lamp luminaires; 63 lumens per watt for high-intensity discharge luminaires; and 12 lumens per watt for incandescent lamp luminaires (all assuming an estimated luminaire efficiency [3] of 70 percent). [4] The most modern conventional technologies, especially linear fluorescent lamp luminaires, may currently have greater overall luminous efficacy than some LED luminaires; however, LED luminaires are expected to reach a luminous efficacy of 230 lumens per watt. The analysis below estimates the potential financial and emissions impacts of high LED adoption in commercial buildings compared to conventional technologies.


The implementation unit in the analysis is lumen: the rate at which a luminaire can produce visible light. The functional unit is lumen-hour, which describes the production of visible light over time.

Total Addressable Market [5]

The total commercial lighting demand was taken as the total addressable market for LED lighting (commercial): 70 petalumen-hours in 2014. This data was obtained from several sources, including the International Energy Agency (IEA, 2016 and 2006). Current adoption [6] of LED lighting (commercial) was estimated to be 3 percent of the total commercial lighting market.

Adoption Scenarios [7]

Impacts of increased adoption of LED lighting (commercial) from 2020-2050 were generated based on three growth scenarios, which were assessed in comparison to a Reference Scenario where the solution’s market share was fixed at the current levels.

  • Plausible Scenario: This scenario uses prognostications of commercial LED adoption from two key sources (DOE SSL Program, 2015; Bergesen et al, 2016), which show growth to approximately 82 percent of the commercial lighting market by 2050.
  • Drawdown Scenario: This scenario uses a linear growth to 90 percent adoption worldwide in 2050.
  • Optimum Scenario: This scenario has linear growth to 95 percent by 2050.

Emissions Model

Direct grid emissions (with typical emissions factors [8]), as well as indirect production emissions, were included in the climate calculations. The indirect emissions indicate that LED production releases about 2.4 times as many indirect emissions as the weighted conventional options.

Financial Model

Firsts costs for LEDs average at US$64 per kilolumen. [9] This compares to a weighted average of US$49 per kilolumen for conventional technologies, with no learning rate. Operating costs account for the commercial price of electricity, and amount to US$0.0021 per kilolumen-hour for conventional lighting and US$0.0017 per kilolumen-hour for LEDs. No maintenance costs were included.

Integration [10]

The integration process first had each building solution ordered according to the point of impact on building energy usage (with building envelope solutions like insulation first, building applications like LED lighting [commercial] second, and building systems like building automation systems last). The energy savings potential of LEDs was reduced to represent the prior energy savings of higher order solutions, and the output from LEDs was used to adjust the input of other solutions.


In the Plausible Scenario, the global greenhouse gas emissions reduction of LED lighting (commercial) was estimated to be approximately 5.04 gigatons of carbon dioxide-equivalent gases. Additionally, the operating savings amount to US$1.09 trillion over the 2020-2050 period. This comes at a negative net installation cost of –US$205 billion, since the lifetime of LEDs is much higher than that of the conventional technologies and thus would require fewer replacements.

The Drawdown Scenario shows a very similar impact at 4.9 gigatons, at a net cost of –US$128 billion. This produces the same operating savings as the Plausible Scenario. The Optimum Scenario, however provides a higher impact at 8.1 gigatons with a net cost of –US$179 billion, and saves US$1.9 trillion on operating costs over 2020-2050.


Commercial LED lighting shows the potential to be a financially sound investment for commercial building owners given LEDs’ high luminous efficacy and long lifetime. Given the expected future efficacy development, LED lighting should offer even higher energy efficiency compared to conventional lighting technologies soon. In addition, LED lighting enables advanced lighting controls including dimmable lighting, various colors of light, and color tuning. The purchase price of LED products may still hamper the wider penetration of the technology, but the price is decreasing. Simultaneously, the luminous efficacy is increasing, making LED technology an increasingly attractive lighting solution. Despite the high purchase price, the total life cycle costs of LED commercial lighting are typically somewhat lower than those of conventional technologies due to the low operating costs. The high energy efficiency, reduced operating costs, and reduced amount of greenhouse gas emissions are considered to be the main benefits of LEDs, but the much longer service life—usually 50,000 hours—is also very attractive.

[1] The amount of visible light produced for a given power supply.

[2] The light housing.

[3] Light output ratio.

[4] A lumen is a measure of the visible light emitted by a source. We present adjusted units in this summary according to the context: a kilolumen corresponds to one thousand lumens, and a petalumen corresponds to one million billion lumens.

[5] For more on the Total Addressable Market for the Buildings and Cities Sector, click the Sector Summary: Buildings and Cities link below.

[6] Current adoption is defined as the amount of functional demand supplied by the solution in the base year of study. This study uses 2014 as the base year due to the availability of global adoption data for all Project Drawdown solutions evaluated.

[7] To learn more about Project Drawdown’s three growth scenarios, click the Scenarios link below. For information on Buildings and Cities Sector-specific scenarios, click the Sector Summary: Buildings and Cities link.

[8] From the Intergovernmental Panel on Climate Change (IPCC).

[9] All monetary values are presented in US2014$.

[10] For more on Project Drawdown’s Buildings and Cities Sector integration model, click the Sector Summary: Buildings and Cities link below.

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