Ron Farmer, CEO of US LED, talks about LEDs and some of the changes in the industry.
Please excuse any typos in this hasty transcript.
Jay Curry: And we’re back, hello Texas, welcome back to Texas business radio. I’m Jay Curry, your host for this segment, Matt had to step out. He’s going to be back for our next segment, but we’ve got a dandy one for this 15 minutes. I think you’re going to enjoy this. We’re talking about how to turn the world green, and in particular, relating to lighting and energy consumption.
I have here, in the studio, Ron Farmer, who’s the president of US LED, a … I guess, lighting manufacturer, I’m not sure what you’d call yourself.
Ron Farmer: Yeah.
Jay Curry: Ron, thank you for joining us. Why don’t you explain, you know, what US LED is all about?
Ron Farmer: Okay, well, it’s a LED lighting company for commercial and industrial lighting, and that would be, easier said, it’s like parking lot lighting, and wall packs, and interior lighting in a building like this one, or the building that your listeners are in right now. I’m sure, if they look up above their head, they’ll have a two-by-four, or a two-by-two troffer, incandescent cans and such as that.
And, so, that’s what we replace. Whether it’s in a retail store, or it’s in an office, or convenience store, hospital, you know, manufacturing, distribution centers, we do all of that.
Jay Curry: So, it literally is engineering and manufacturing, though, it’s-
Ron Farmer: Yes, it is.
Jay Curry: … I mean, it’s easy to say what you just said, but you have to really understand what’s behind this. It’s not just, take this light bulb out and put the other one in-
Ron Farmer: No, no it’s not that-
Jay Curry: … it’s much bigger than that, right?
Ron Farmer: No, it is much bigger than that. Well, probably, let’s go back one half a step-
Jay Curry: Sure.
Ron Farmer: … because you alluded to wanting to know whether or not we do our own engineering, and we do-
Jay Curry: Yeah.
Ron Farmer: … we have in-house engineers. We have nine on our staff, engineering staff, I mean. Seven are degreed engineers. So, we design the shape of the product, we design the heat sink, we design the board, the LEDs, how they’re applied, the lensing, how we direct the light and everything. So, that’s all done in-house. So, we don’t take any Chinese products and relabel them and simply put our name on it and do a multiple listing. So, we don’t do that. And, so, as a result, we can set a standard and keep that standard across the breadth of all of our product.
Another claim to fame for us, I mean, there’s a couple, three I’d like to mention. One is the catalog. It’s a very large catalog. So, we can go into an office building to do pretty much everything. We can do the hallways, back room, bathrooms, the parking garage, the parking lots, and so on.
And we do the same thing even in some place like a convenience store. You wouldn’t think of a convenience store as being some place with a lot of variety, but it really does, if you think. They’ve got a car wash, they’ve got the canopy lights, they’ve got interior, refrigeration lighting where you get your bottled water, or beer, or whatever.
You know, we can do all of that lighting, and it’s all-
Jay Curry: They’re also open 24-hours, practically, in most cases.
Ron Farmer: Yeah.
Jay Curry: Certainly a long time, and those lights are going daytime and nighttime.
Ron Farmer: Sure.
Jay Curry: So, that’s a good application, a good example.
Ron Farmer: Yeah. That’s a good example. So, we’ve done over 6,000 convenience stores in the United States. We’ve done … I can’t even tell you how many, something like 17,000 retail stores that we’ve done in the United States. Done over 4,000 this year alone. And that’s retrofitting from fluorescents over to LED lighting, or over from incandescent lighting, or HID lighting and such as that. So, we’ve got a large …
And the thing I was going to mention earlier, sort of our differentiator, is that our lights last longer not just than incumbent lighting, but they last longer than most of the LED products as well. We have a 200,000-hour L70. And L70 just a commercial term within our industry.
And it’s all … All the testing is done the same, no matter whether its us, or Cooper, or whomever. And, so, when we say that ours are 200,000 hours and somebody else’s are 50,000, which is a standard in the industry, the LED industry, I’m talking about now, you know, ours are much longer life.
So, in 10 years a standard LED lighting product has to be replaced, because its lost 30% of its light. It’s too dim now, at the end of the 10 years. Ours will have only lost seven or eight percent of the light in that same 10-year period. So, we can go 20 or 30 years with our lights, and they will actually last that long.
Jay Curry: That’s a big competitive advantage to you versus Phillips, or GE, and some of those, is they’re putting in pretty standard stuff.
Ron Farmer: Lifetimes. Standard lifetimes. And, so-
Jay Curry: Right, versus your really engineering these things that are-
Ron Farmer: Yeah. Everybody has that choice, by the way. I mean, you can … I mean, it isn’t that GE doesn’t know the difference and how to do the difference, it’s not that at all, it’s just that some companies, and I don’t … I haven’t looked at GE’s catalog lately, so I don’t know exactly, you know, whether theirs are 50,000 hours still or not, but that’s very standard in the industry. If you looked at, you know, the largest percentage, I would say that probably 80% of all the LED lighting will be a 50,000-hour life fixture, even an engineered fixture.
Now, another differentiator that your listeners might want to know is that there’s a difference between a LED screw-in light bulb, they only last 15 to 25,000 hours in general. And, so, that’s a much, much less lifetime than what an engineered fixture, even at 50,000 hours, is. It’s half or less.
Jay Curry: So, there’s a tremendous response, tremendous ROI for this, both in cost and in saving of power, right?
Ron Farmer: Right.
Jay Curry: Didn’t you say something like 20% of all of our electricity is just for lighting, and …
Ron Farmer: Yes, yeah, the last time I looked was several years ago, but it was 19% of all of the electricity produced in the United States was used for lighting, and we can … We, as an industry, can save about 75% of that, 60 to 80%. We have some that we’ve saved over 80% [inaudible 00:05:56] I mean, where we’ve done a side-by-side test and so on.
But anyway, so, you could shut down, I mean, theoretically, shut down about three fourths of all the power plants in … That are used for lighting. So, that would be, you know, three fourths of 19% for it to be …
Jay Curry: Could be huge for sure.
Ron Farmer: Yeah.
Jay Curry: So, the other thing is that the industry has been kind of pushed by, I guess, government, to get into this for the reasons that you just stated, I mean-
Ron Farmer: No.
Jay Curry: No?
Ron Farmer: No, no, no, so … No-
Jay Curry: Is it just financial?
Ron Farmer: Oh, yeah, it’s all financial. I mean the government wasn’t even involved in it as far as I know. We got in it in 2001, there was only red lighting back then, we were lighting signs only at that time, and there were other companies that were lighting street lights, and that was about all that was getting done. And there were indicator lights on computers and such. But very little was really being done other than that.
Jay Curry: Could have used that in, like, your [crosstalk 00:06:50]
Ron Farmer: No, no, not for general purpose lighting. So it was about 2005 the first … Luma Lights brought out the first white lights that were worth anything, and they-
Jay Curry: And that wasn’t …
Ron Farmer: … and they weren’t really great by then. But another five years went by, 2009 we were actually starting to develop decent ROI based on 24 hours a day, so, we went into refrigeration lighting. But we did … In 2010 we did over 6,000 7-11 stores with our product, over 800,000 feet went in. The following year we did 5,000 of those same stores, but did the two-by-two troffers for the overhead lighting inside the store.
So, by 2010-11, you know, white light had arrived, and then we just continued as an industry, just continued to make it better and better, and now we get paybacks of … Two years or less is very common.
Jay Curry: Wow. So, it really was the development of the product that’s made this revolutionary. Is it mature now? Are we …
Ron Farmer: Pretty Mature, actually. I mean, we’re getting very, very good efficacies now. I mean, at a fixture level it’s not uncommon, now, to get 125 to 155 lumens per watt, and to compare that to, oh, I don’t even know what an incandescent bulb is, but it’s, you know, a tenth of that, probably.
Jay Curry: Wow, and you can get potential return that’s amazing. We’re refitting the whole United States because of this, right?
Ron Farmer: Yes, yes [crosstalk 00:08:06]
Jay Curry: How’s that coming? Is that a 20-year project? A 5-year … What’s that …
Ron Farmer: Well, it’s well into it now. The incumbent lighting companies Acuity, and GE, and so on, I recently read that something on the order of 80% of Acuity’s lighting now is LED lighting as opposed to the incumbent. GE is selling their lighting business. Phillips has announced they’re selling their lighting business. Sylvania announced they were selling their lighting business. So, all the big names in lighting have announced that they’re going to sell. I don’t know if they all will, but they’ve all announced that they’re going to.
So, if you look at it, this is not the future, because there’s no residual business behind it. Once you put something in that’s going to last, even at 50,000 hours, it’s going to last 10 years. You know, at 200,000 hours it’s going to last, you know, 30 or more. And, so, there’s not going to be that big business in the future of going down to Home Depot and buying a light bulb to go replace the one in your house because you will have already done it once and you’re not going to do it again for many, many, many years.
So, the big companies are actually getting out of the lighting business.
Jay Curry: That’s because of the retrofitting is becoming mature, and like you’ve said-
Ron Farmer: More mature, yeah.
Jay Curry: … it is just going to … It is revolutionizing-
Ron Farmer: Yeah. In another three to five years most of the first phase of retrofitting will be done, and then something else is going to happen. I mean, what’s going to happen then is the original LED lighting products that were put in in 2010-11-12 and so on, that only had 50,000-hour lights, they will have lost so much of their light they will have to be replaced again, but that’s another three to five years out.
And, so, you know, there will still be business, you know? But after you’ve done that a couple of cycles, you know, the really long, long, long term will be for new construction. There won’t be retrofitting anymore.
Jay Curry: Fabulous story. Fabulous story, and very interesting. So, Ron, I don’t … Now, folks, if you’re thinking about calling Ron to have him fix your house or something, you know, that’s not going to work. We’re talking industrial, here. We’re talking about big commercial, but if somebody did want to learn more, where would they go?
Ron Farmer: Well, going to the website’s the best thing, USLED.com would be the best place to look at our product line.
Jay Curry: U-S-L-E-D dot com-
Ron Farmer: Exactly.
Jay Curry: All right, folks. Ron Farmer, CEO of US LED. Thank you, Ron, for your time. We’re going to have to take a break, but before we do let me remind you that you can go to TexasBusinessRadio.com, you can see Ron’s interview, you can see all of our guests, you can learn about our sponsors, everything’s there at TexasBusinessRadio.com. We also monitor hashtag TBR on Twitter, and if you want to call in we’ll get the expert, we’ll get you the answer at our 24-hour call-in, 844-814-8144.
We’re going to take a break. We’re going to get Matt Register back in the studio. So, don’t go anywhere, we’re going to be right back.
Sponsored in part by:
Jay W. Curry
Along with hosting “Texas Business Radio”, Jay is a Professional Certified Coach and Master Chair facilitating four Houston-based Vistage peer groups. In addition to being a best selling non-fiction author, the 2015 release of his award winning novel, Nixon and Dovey: the Legend Returns, adds novelist to his title. Jay holds a BS in Mathematics from Oklahoma State and an MS in Computer Science from Kansas State. You can learn more about Jay HERE.