According to a 2012 article by LEDs Magazine, the US Department of Energy has estimated that light emitting diode or LED lighting is expected to represent 36 percent of lumen-hour sales on the general illumination market by 2020, and 74 percent by 2030. While we have highlighted startup companies such as Bridgelux before, there are other companies well entrenched in niche spaces that have first mover advantage. One such company in the outdoor lighting niche is Leotek.
Silicon Valley based Leotek is a privately held company that considers themselves pioneers in LED technology. With millions of LED products installed throughout the United States, Leotek has signal modules installed in over 30% of America’s intersections. In this LEDs magazine article, Leotek is listed as one of the world’s top three suppliers for the LED traffic signal market. The company also claims to be the second largest supplier of LED street lights in the US. According to this article by Navigant Research, unit shipments of LED lamps for street lights will rise from fewer than 3 million in 2012 to more than 17 million in 2020.
Los Angeles Project
One project Leotek has participated in was the Los Angeles LED retrofit project. L.A. operates the second biggest street lighting system in the entire US. In 2009 the city of L.A. embarked upon the largest LED street lighting retrofit ever undertaken globally at the time according to this report by Esmap.org. With a budget of almost $57 million, the project attempted to replace 66% of street lights with LEDs by 2014. The cost savings to realize were significant since according to another article by Navigant Research the amount of money spent by a city on electricity for streetlights can reach up to 40% of the total electricity bill. L.A. expects to realize around $10 million per year savings in maintenance and electricity costs as a result of the retrofit. In addition to the cost savings, the below before and after shows just how much the quality of light improved following the retrofit.
While Leotek was not the only company involved in this massive project, the success so far of the LED retrofit project in L.A. bodes well for the Company in that they may well go on to realize similar success in many other cities worldwide on the back of this project. While Leotek remains private and outside the grasp of public investors, the company certainly merits watching going forward as they continue to make good headway in the street lighting LED niche.