How Many Lightbulbs Does it Take to Change the World? One. And You're Looking At It.

By: Charles FishmanWed Dec 19, 2007 at 8:13 AM

For years, compact fluorescent bulbs have promised dramatic energy savings--yet they remain a mere curiosity. That's about to change.

Every swirl sold will eliminate demand for six to eight regular bulbs.

The Swirl Cascade

What really revolutionizes the lightbulb experience, and the business itself, is a second quality of swirls, beyond their ability to squeeze more light from a kilowatt: their longevity.

The compact fluorescents that GE, Philips, and Sylvania are putting on shelves are rated to run for 8,000, 10,000, or 12,000 hours. Few bulbs in a home are lit more than four hours a day; at that rate, an 8,000-hour bulb lasts five-and-a-half years; a 12,000-hour bulb lasts eight years and three months. As swirls take hold, it will be a surprise, a novel event, when a lightbulb goes dark. Imagine all those hard-to-reach bulbs that need to be replaced every three months. From four times a year, to once a decade.

"This is about selling lightbulbs, but it's far bigger. This has huge implications for the world."

And the impact of swirls cascades outward. Since every CFL has the life span of 6, or 8, or 10 equivalent incandescent bulbs, if Wal-Mart alone sells 100 million swirls in the next year, it does away with the need for 100 million old-fashioned bulbs to be manufactured, packaged, shipped, bought, and discarded next year--and every year until 2012 or beyond.

How much is 100 million bulbs? It's 25 million classic GE four-packs. That many boxes of bulbs would fill 262 Wal-Mart tractor trailers, a ghost convoy of Wal-Mart trucks, loaded with nothing but lightbulbs, stretching 3.5 miles--a convoy that will never roll. Every year for six years--just from one bulb, this year. Not to mention the line of garbage trucks necessary to cart 100 million burned-out incandescent bulbs to the landfill.

What you don't make, of course, you never get to sell. As enthusiasm for compact fluorescents mounted in Bentonville, there were multiple strategy meetings between the Wal-Mart lightbulb people and the GE lightbulb people--including a conversation January 12 between Lee Scott and GE CEO Jeffrey Immelt in which swirls were a significant topic.

GE had launched its ecomagination business push in May 2005--neatly summarized by Lorraine Bolsinger: "Green can be green." Scott launched Wal-Mart's sustainability repositioning last October in a speech to his own executives. Understanding the power of the CFL, Scott told them, had helped him see that environmental problems are really a disaster like "Katrina in slow motion." Pledging to take Wal-Mart and its customers and suppliers down a new path, he declared, "Environmental problems are our problems."

Immelt and Scott agreed in January that a major push on swirls was in order. But strategic enthusiasm doesn't change a simple short-term fact: Every new energy-saving swirl you sell obliterates sales of six or eight of your classic product. Incandescents won't ever go away--we still use candles--in part because there are some places CFLs simply don't work well. They are not tiny or elegant enough to be chandelier bulbs. They do not work as accent lighting. But in as little as five years, if Wal-Mart sparks a significant conversion to swirls, the lightbulb business will be rocked.

Total unit sales could be half what they are now. In the short run, there's a bonanza: 95% of sockets in U.S. homes don't have swirls in them, and a billion of them, or more, could. At the moment, with CFLs selling for 10 times what regular bulbs do, there's no immediate loss of revenue or profit. But prices won't stay where they are for long. At Sam's Club, Wal-Mart's club-store division, GE swirls already sell at $12.73 for an eight-pack--$1.59 per bulb, or just six times the cost of old-fashioned bulbs. At that price, the economics change. Competition from other retailers will force the price even lower--especially because of what happens next.