A Federal Lightbulb Plan

Yesterday I again voiced my criticism of the "Light Bulb Bill", which is now on hold. Today, I'll lay out what I would propose the federal government should do.

I'll start by defining the problem we're trying to solve, beginning with two things that aren't a problem. First, I don't believe there is an issue with motivation to innovate in the bulb manufacturers; they are now well aware of the potential to cut American's electricity bills and split the savings with them, bringing billions in new revenue and potential profits to their industry. I am also sure they are well aware of why Americans aren't buying their current products design to replace incandescents, and are working to fix those issues.A lightbulb

Second, I don't believe that this has anything to do with a willingness among the US public to switch to more efficient bulbs. Americans switch products all of the time in other areas, and will be happy to do it here if their desires for features and up-front costs are met. It is also not an issue of awareness - Americans are at a historical high in awareness of lightbulb electricity costs and efficiency - its impossible to avoid.

The issue is actually quite simple: Americans aren't happy with the product features and upfront costs of today's efficient bulbs, so aren't changing over to them in large numbers yet. So what should the federal government do?

I propose a three prong approach, playing to the strengths of the US Federal government:

1) Continue to fund focussed, R&D in lighting. The US Government is great at this, and has a hugely effective vehicle in ARPA-E to drive this agenda.

2) Continue with traditional EPA programs. The EPA is pre-eminent efficiency organization in the world, and understands how to educate consumers and provide data which fuels state and local programs. These techniques are proven, and will work over time provided reasonable alternative products exist.

3) Use the purchasing power of the government to create a better market. The US government is the largest consumer on earth. Each year the federal government should select the best bulb alternatives and purchase those throughout the organization. This will drive predictable sales volume for the latest, best technologies, and will provide yet another vehicle for highlighting the best of emerging bulb technology.

My prediction is that if we do these things, by the sometime in the second half of this decade we'll have successful replacement technologies for inefficient incandescents, and incandescent bulbs will no longer dominate the US lightbulb market.

I understand that the main criticism for this approach is that it is not a sure thing, and that if we're going there already we should just mandate the change. But I will argue that the result is quite different: if companies are forced to produce desirable products before they get adoption and the resulting revenues, they will innovate until they reach that point. If adoption of their undesirable products is mandated by the government, their need to produce desirable products is diminished, and exists only to the extent that the market is truly competitive. We will get better products faster if we make the big manufacturers earn their reward for more efficient products.