10B-i 

APPENDIX 10B. MARKET SEGMENT-BASED LIGHTING EXPERTISE ANALYSIS 

TABLE OF CONTENTS 

10B.1 INTRODUCTION .......................................................................................................10B-1 

10B.2 METHODOLOGY ......................................................................................................10B-2 

10B.3 MARKET ACTOR TAXONOMY..............................................................................10B-2 

10B.3.1 COMMERCIAL VERSUS RESIDENTIAL SECTORS............................10B-3 

10B.3.2 LARGE VERSUS SMALL COMMERCIAL SUBSECTORS ..................10B-3 

10B.4 THE MARKET SEGMENTS – COMMERCIAL SECTOR ......................................10B-3 

10B.4.1 RENOVATION AND REMODELING .....................................................10B-4 

10B.4.2 NEW CONSTRUCTION............................................................................10B-6 

10B.4.3 RETROFITS ...............................................................................................10B-7 

10B.4.4 BALLAST FAILURE.................................................................................10B-9 

10B.4.5 FIXTURE REPLACEMENTS .................................................................10B-10 

10B.4.6 CONCLUSION.........................................................................................10B-10 

10B.5 THE MARKET SEGMENTS – RESIDENTIAL SECTOR .....................................10B-10 

10B.5.1 RENOVATION AND REMODELING ...................................................10B-11 

10B.5.2 NEW CONSTRUCTION..........................................................................10B-12 

10B.5.3 RETROFIT, BALLAST FAILURE, AND FIXTURE 

REPLACEMENTS ...................................................................................10B-13 

10B.5.4 CONCLUSION.........................................................................................10B-14 

REFERENCES ......................................................................................................................10B-15 

LIST OF TABLES 

Table 10B.1 Probability of Tuning a Lamp Ballast System in the Commercial Sector........10B-10 

Table 10B.2 Probability of Tuning a Lamp Ballast System in the Commercial Sector........10B-14 
10B-1

APPENDIX 10B. MARKET SEGMENT-BASED LIGHTING EXPERTISE ANALYSIS 

10B.1 INTRODUCTION 

New or amended energy conservation standards may require some consumers to purchase 

higher efficacy lamps. How consumers pair these lamps with ballasts could substantially affect 

the potential energy savings and NPV that would result form the proposed rule. For example, 

to maintain lumen output with a new higher efficacy lamp, some consumers may select a 

reduced-wattage lamp to replace a less efficacious predecessor. Others may simply replace the 

lamp with one of the same wattage, not make any other adjustments, and accept higher light 

output. For general service fluorescent lamps (GSFL), which operate on ballasts, there is 

another alternative if reduced-wattage lamps are not available within desired lumen ranges in 

particular applications: Consumers may choose to run the higher efficacy lamps on lower 

ballast factor (BF) ballasts. Ballasts control the electrical current driving the lamp; pairing a 

lower ballast factor with a more efficacious lamp would allow consumers to maintain lumen 

levels while saving energy. The purpose of this section is to discuss the extent to which 

consumers in the standards case will migrate to reduced-wattage lamps, or, when reducedwattage lamps are not available or feasible, pair the new lamps with a lower ballast factor 

ballast (i.e., ballast factor “tuning”). 

As discussed in the Chapter 10, DOE analyzes a set of standards case scenarios called the 

“High” and “Market Segment-based” lighting expertise scenarios. This set of scenarios 

characterizes consumers’ decisions (or lack thereof) to either maintain equivalent light output 

upon the purchase of a new high efficacy lamp or accept higher lighting levels. The High 

expertise scenario generally characterizes more sophisticated lighting decisions in which 

consistent lighting levels and/or energy savings play a determinant role in consumer behavior. 

In this scenario, consumers are more likely to choose a lower ballast factor to pair with higher 

efficacy lamps or purchase a reduced-wattage lamp. Conversely, in the Market SegmentBased scenario, DOE assumes consumers occasionally accept high lighting levels as a 

consequence of their expertise (or lack thereof). DOE analyzes lighting expertise based on the 

consumer type (owner, electrical contractor, homebuilder, etc.) and the purchase event (new 

construction, replacement, etc.). 

This section draws on an extensive literature review and analysis to discuss market 

behavior in five market segments: new construction, major renovation, fixture replacement, 

retrofit, and ballast failure. (DOE did not include lamp failure as a market segment because 

DOE assumes no consumers will replace a working ballast in order to “tune” it to a higherefficacy lamp.) Specifically, DOE’s goal is to determine what portion of new higher-efficacy 

lamp purchases would be reduced-wattage or paired with lower BF ballasts. As discussed in 

the Chapter 10, DOE used the results from this analysis (the percentage of consumers 

purchasing not purchasing reduced-wattage lamps or using lower BFs) to characterize the 

Market Segment-Based lighting expertise scenario. The High lighting expertise scenario 

assumes that all consumers in the standards case will seek to maintain lumen output by 

purchasing either: 1) reduced-wattage lamps, or 2) a lower ballast factor ballast. 
10B-2

 

10B.2 METHODOLOGY 

To conduct this analysis, DOE first identifies the major actors most likely to make 

purchase decisions in each market segment. Next, DOE apportions shares of all decisions to 

each of those identified decision makers within each segment. Finally, DOE estimates the 

probability of migrating to a reduced-wattage lamp or pairing a lower BF with a higher efficacy 

lamp for each decision maker within each segment. Because DOE found no data on the 

probability of decision makers choosing lower BF to maintain light output, DOE used the 

technical sophistication, or lighting expertise, of each decision maker within the context of the 

purchase event as a proxy for that likelihood. The more knowledgeable a decision maker is, the 

more likely they are to take measures (such as using a lower BF or purchasing a reduced-wattage 

lamp) to maintain appropriate lumen levels. For simplicity, all subsequent references in this 

appendix to the migration or purchase of a lower BF ballast (as an energy savings option) is 

meant to also include the option of purchasing reduced-wattage lamps. 

10B.3 MARKET ACTOR TAXONOMY 

Because the industry literature discussing building and lighting decision makers 

frequently uses different terms for the same actors, it is necessary to briefly discuss how DOE 

categorizes the following agents. 

Owners. DOE broadly defines this category to include business owners, developers, 

general contractors, and property and building managers. A broad definition is necessary 

because who the “owner” is very much depends on which market segment is being analyzed. 

For example, the owner in new construction could be the developer while the owner in a 

hardware store could be a small business owner. However, in the residential sector DOE does 

make a distinction between homeowners and developers/general contractors to better apply the 

industry literature to our analysis. 

Architects and Electrical Engineers. DOE groups electrical engineers, architects and 

lighting designers into a category characterizing agents who work predominantly on lighting 

design, layout, and specification. 

Electrical Contractors. This category includes those agents charged mostly with 

installation services and sometimes procurement. 

Other agents such as distributors, energy service companies, manufacturer reps, and 

lighting showrooms also play a decision-making role in the sector. However, based on its 
10B-3

research, DOE does not believe these agents are central to the decision-making process to an 

extent that would necessitate their inclusion in this analysis, especially given the lack of data 

describing their behavior. 

10B.3.1 COMMERCIAL VERSUS RESIDENTIAL SECTORS 

DOE believes there is substantial market behavior differences between the commercial 

and residential sectors and has therefore analyzed them separately. However, DOE assumes 

that industrial sector decision makers generally behave similarly as those in the commercial 

sector. As such, DOE did not conduct a separate analysis for the industrial sector. According 

to DOE’s shipments analysis, the commercial and industrial sectors receive roughly 80 percent 

of all GSFL shipments in the 2012 base case, while 20 percent go to the residential sector. 

10B.3.2 LARGE VERSUS SMALL COMMERCIAL SUBSECTORS 

Decision makers in the large-commercial sector can be different agents making different 

decisions than those in the small-commercial sector. In the market segments (purchase events) 

where DOE found consumer behavior to be substantially different between these subsectors, 

DOE weighted the relative impact of each subsector when characterizing the overall 

commercial market. 

According to the Small Business Administration, firms with fewer than 50 employees 

employ 29 percent of all employed workers.1 Using that figure as a proxy for proportional 

floor space, small commercial firm space represents 29 percent of the commercial lighting 

market and the large commercial market represents 71 percent. 

10B.4 THE MARKET SEGMENTS – COMMERCIAL SECTOR 

DOE begins its discussion of the market segments with renovation and remodeling 

because it found the most comprehensive data for this segment. For those segments for which 

little information was available (such as fixture replacements), DOE used the likelihood of 

ballast factor tuning in the renovation and remodeling segment as a starting point or 

benchmark, which is used to make estimates about other segments based on their similarity to 

renovation and remodeling. 
10B-4

10B.4.1 RENOVATION AND REMODELING 

For this analysis, DOE defines renovation and remodeling (R&R) to include events that 

alter existing buildings’ structure, space or systems beyond (but including) its luminaires. 

Market literature suggests architects and electrical engineers play the largest role in the 

commercial R&R segment. In a California survey of decision makers who recently completed 

building renovations, 80 percent of projects involved architects; half of which were outside 

consultants, and the rest split between owner and lessee in-house staff. Architects were 

responsible for 62 percent of specifications, not counting any owners’ or general contractors’ 

in-house staff. The owner, general contractor, or developer’s staff was responsible 36 percent 

of the time.2 

Designers polled in a Pacific Northwest survey said architects, electrical engineers and 

lighting designers influenced specification about 90 percent of the time. The owner/developer 

composed the remaining 10 percent.3 Still, the owner sets the budget about 75 percent of the 

time, although “lighting decisions were heavily influenced by external building professionals, 

especially electrical engineers.”4 Further, “[c]ontractors and subcontractors were the least 

likely to be primarily responsible for producing the renovation designs and specifications.”5

The literature also suggests that the decision maker will vary based on the size of the 

clients. Owners of small businesses/buildings are much more likely to make purchase 

decisions or hire small electrical contractors, while large commercial clients are more likely to 

lean on external or internal lighting professionals: “...a study of the New England market 

found that 50 percent of all remodeling and renovations used lighting designers; however only 

one third of medium-size end-users were likely to use design services in their projects.”6 In 

addition, “almost 60 percent of small commercial business owners surveyed indicated that they 

are directly involved in decisions to upgrade or retrofit the lighting system at their facilities.”7 

Based on these findings, DOE assumes that for large commercial buildings 

architects/engineers make 70 percent of purchase decisions, while owners make 20 percent and 

electrical contractors make 10 percent. In the small commercial segment, however, DOE 

assumes owners make 40 percent of decisions, lighting designers make 30 percent, and 

electrical contractors make 30 percent. Weighting those figures as discussed above for the 

entire commercial sector, DOE assumes lighting designers make 59 percent of decisions, 

owners make 26 percent, and contractors make 16 percent. 

DOE then estimated the likelihood of these agents choosing a lower BF if required to 

purchase a higher-efficacy lamp. In all market segments considered for this analysis—R&R, 

new construction, fixture replacement, retrofit and ballast failure—the decision maker is 

purchasing a more efficacious lamp (because of the standard) and a new ballast. In these cases, 

first-cost does not factor into DOE’s analysis because there is no incremental cost to the 

decision maker as long as low and normal BF ballasts are cost equivalent, which DOE’s 

analysis confirms is the case. The more important factor, then, is the decision maker’s level of 

technical lighting sophistication. 
10B-5

DOE believes architects and engineers are the most sophisticated decision makers. They 

generally design for lumen output,8

 and, given the option, will maintain appropriate lumen 

levels. In the Pacific Northwest survey “[n]early every lighting designer mentioned that they 

use Illuminating Engineering Society (IES) guidelines to help them pick appropriate 

illuminance levels and fixture densities in preparation for specifying.”9 Those guidelines 

specifically address issues with ballast factors. Further, “Lighting designers often use specific 

BF equipment to fine-tune lighting systems and maximize the versatility of each lamp type.”10

“Product literature is the single most important source of information on lighting 

efficiency for the lighting professionals.”11 In their high-efficacy lamp product literature, 

manufacturers tout the flexibility of the lamps to achieve various lumen levels when combined 

when with low, normal and high BF ballasts.12 More explicitly, manufacturers note the 

consumer’s choice between greater lumens levels or energy savings.13 More technical product 

sheet from manufacturers offer detailed system performance data of various ballast/lamp 

combinations.14 In other guidance documents, DOE found numerous references instructing 

decision makers to consider ballast factor or face higher lumen levels when determining 

appropriate lamp-ballast combination.15 For example, one guide recommends various “model” 

layouts for a number of applications (office, retail, education, etc.) that utilize “the thoughtful 

use of normal ballast factor (NLO), reduced ballast factor (RLO), and high ballast factor 

(HLO) electronic ballasts to better match light levels and power to the room needs.”16 Further, 

a “choice of ballast factor allows designers to better minimize energy use by “tuning” the 

lighting levels in the space.... A wide range of ballast choices are available to lighting 

practitioners, allowing them to attain their lighting objectives more efficiently.”17

Building lighting codes could also compel decision makers to consider using lower BF 

ballasts rather than accept higher lumen output and greater energy use. Many states and 

municipalities have adopted lighting codes that set maximum lighting power density (LPD) 

levels, measure by watts per square foot, particularly in the commercial sector. Those codes 

are often based on ANSI/ASHRAE/IESNA Standard 90.1 or IECC, which recommends 

various LPD levels by sector and tasks, as well as target lighting levels, measured by 

footcandles (lumens per square foot). Generally, building codes and lighting incentive 

programs require compliance with codes based on Standard 90.1’s LPD and footcandle targets 

and recommendations. The standards undergo revisions every few years. The 2004 edition of 

Standard 90.1 dramatically lowered LPD limits for nearly all commercial applications for new 

construction and signification alterations and additions.18 ASHRAE is targeting a 30 percent 

energy reduction for in 2010 version of the standard compared to the latest 2004 standard.19

The Northeast Efficiency Partnership predicts that could yield a 10 percent decline in LPD in 

the 2012 version of the IECC standard, which generally mirrors Standard 90.1 and is used by 

many states. As there newer and increasingly stringent standards work their way into building 

codes, if builders, contractors or owners simply accept higher lumen levels from higherefficiency lamps, it is possible they will not have reduced LPD levels and therefore may not be 

code-compliant. DOE believes this is unlikely, particularly in the R&R market segment, where 

the newest, more stringent lighting codes may not be fully applicable as they generally are in 

new construction. Still, the fact that lighting codes exist requires decision makers to be 

cognizant of lighting levels. Even more likely, achieved lighting levels will be well above 

recommended illuminance levels if lower BF ballasts are not used. 
10B-6

In summary, guidance documents and specification protocol instruct architects/engineers 

to emphasize appropriate lighting levels, which are increasing subject to effective caps by 

building and lighting codes. Additionally, architects/engineers depend heavily on product 

literature, which is abundant and often suggests utilizing lower BF factors to maintain lumen 

levels. For these reasons, DOE assumes architects and engineers will choose a lower BF 

ballast 100 percent of the time. 

Owners do not have the same level of expertise, but again, in the R&R segment there is 

no incremental cost to a lower BF ballast. Additionally, in renovations, usually entirely new 

fixtures are required, not just a lamp and ballast. DOE’s research shows that most fixtures are 

sent with an accompanying ballast, which can be specified by the purchasers or based on the 

manufacturer’s suggestion. This fixtures and ballasts can be pre-lamped by the manufacturer 

as well, which saves the installer labor costs. Because at least some of the system specification 

is done by the fixture manufacturer, often in concert with the lamp and ballast manufacturer 

representatives, DOE believes the decision maker employs, by default, some level of technical 

sophistication, even if that decision maker (the owner or electrical contractor) does not have a 

great degree of lighting know-how. Further, manufacturer representatives, distributors and 

even electrical contractors, have an incentive to avoid costly call backs due to inappropriate 

lumen levels. DOE believes a conservative estimate would put the probability owners will 

choose a lower BF ballast at 25 percent. 

A California study found electrical contractors to be least likely to have a professional 

engineer on staff, suggesting a level of sophistication below that of other market agents.20

While half of the engineering firms surveyed in the study had at least one lighting specialist, 

less than 25 percent of electrical contractors had one. DOE estimates electrical contractors will 

choose a lower BF ballast 25 percent of the time. 

10B.4.2 NEW CONSTRUCTION 

Importantly for this analysis, building professionals do not report a significantly different 

market for new construction than that which exists for major renovation and remodeling.21

Therefore, DOE considers the data on decision makers in the R&R market, of which there is 

more available, to be generally applicable to the new construction market and vice versa. 

Much of the literature suggests the owner or general contractor makes the ultimate 

lighting decision in the new construction market segment. While others may make the designs, 

often the building contractors make the purchase decision.22 Architects and engineers can 

suggest particular choices that would offer a trade-off between higher first cost and lower 

lifecycle costs, but the decision is “strictly the owners.”23 Specialized contractors respond 

“passively” to designs, suggesting the decision comes from the top down.24 “A survey of 228 

architects and engineers in California reports that owners have the most important role in 

energy–efficiency decision in commercial buildings (Wright et al. 2000, 387).”25
10B-7

Still, other studies offer a different picture. A study of the lighting fixture supply chain 

concluded that generally “an owner assigns the architect the task of developing the project, 

including lighting plans and specifications. The architect, in turn, may contract with lighting 

designers and interior designers to assist with different components of the design.” When the 

electrical contractor’s role expands beyond installation, it usually involves procurement.26

Similarly, a lighting study in the Pacific Northwest found “[e]lectrical engineers are most 

influential over choices in lighting equipment, controls and layout.”27 Despite that importance 

of engineers and architects, electrical contractors still made suggestions about a third of the 

time. As the Consortium for Energy Efficiency put it, “[l]ighting designs are typically made at 

the architect or lighting designer level; however, contractors can be the one that often make the 

purchasing decisions.”28

The Pacific Northwest study, referring to all market segments (as opposed to only new 

construction) reported that electrical engineers have lighting discretion in 74 percent of their 

jobs, while contractors reported having discretion 35 percent of the time (distributors reported 

33 percent). 29 However, that “discretion” is largely constrained by the owner’s budget, so it is 

worth noting that in this market segment there is no incremental cost associated with the 

decision DOE is analyzing. That is, there is no incremental first cost to buying a lower BF 

ballast as opposed to a normal BF ballast—in new construction, one still must purchase a 

ballast. 

Because incremental cost isn’t an issue, DOE assumes the owner’s budgetary constraints 

on designers and contractors allow the latter more decision making authority in new 

construction. Furthermore, even when owners make the decision, it may be their own in-house 

architects and engineers really guiding the decisions. Therefore, DOE weights the studies 

showing the substantial influence from engineers and architects more heavily than those 

ascribing ultimate decision-making power to owners. 

In sum, DOE assumes lighting designers, architects and electrical engineers make 70 

percent of the decisions, owners make 20 percent, and electrical contractors make the 

remaining 10 percent. However, in contrast to the R&R market, DOE does not weight this 

segment for the small commercial subsector because DOE did not find evidence of distinct 

market behavior in the new construction market segment (e.g. A small business owner is 

unlikely to be a decision maker in the new construction market segment). 

DOE then estimated the likelihood of these agents choosing a lower BF, given a higherefficacy lamp. DOE uses the same probabilities for new construction as it does the R&R 

market segment because the market segments are very similar. That is, decision makers face 

similar decisions when choosing ballast-lamp combinations for a floor that has been gutted and 

remodeled as they do for an entirely new building. 

10B.4.3 RETROFITS 
10B-8

For the purposes of this analysis, DOE defines a retrofit as a voluntary action taken to 

save energy costs. Retrofits are generally less costly and time-intensive then new construction, 

renovations or fixture replacements, but proactive in nature, and therefore still likely to require 

substantial decision making involvement from the owner, particularly in the small commercial 

market. A common retrofitting action, for example, is to replace older, less efficacious T12 

lamps with newer T8 models. 

An ACEEE study found that large “building owners and developers often work with 

professional lighting designers, architects, and engineers.... Small building owners, on the 

other hand, will use electrical contractors and lighting suppliers when developing or retrofitting 

their lighting design.”30 A New York state study reported 66 percent of small commercial 

customers enlisted the help of electrical contractors, with general contractors (37 percent) and 

landlords (30 percent) being the next most likely options (multiple agents could be chosen).31

Another study showed nearly 60 percent of small commercial owners are directly involved in 

their lighting upgrade decisions.32

DOE believes retrofits follow a similar decision making pattern as the previous events. 

However, because retrofits are more limited in scope, DOE believes installers (electrical 

contractors) likely play a greater role than designers (architects and electrical engineers) 

relative to the previous market segments. Further, the ACEEE study reported that even “in 

situations where the lighting system is specified by a lighting designer, architect, or engineer, it 

is common for the electrical contractor installing the equipment to make last-minute 

substitutions in order to use products currently in-stock or in response to cost-cutting pressures 

from building owners.” 33

Therefore, DOE estimates that in the large commercial sector architects/engineers, 

owners and electrical contractors make 50 percent, 40 percent, and 10 percent of the decisions 

compared to 20 percent, 50 percent, and 30 percent, respectively, for the small commercial 

subsector. Using the blended average, architects/engineers make 41 percent of the decisions, 

while owners and electrical contractors make 43 and 16 percent, respectively. 

DOE then estimated the likelihood of these agents choosing a lower BF, given a higher 

efficacy lamp. Given the owner is making a proactive decision to cut energy costs by 

retrofitting its lighting, DOE assumes owners in this market segment are more likely to be 

technically sophisticated, to invest the time to overcome information barriers, and to hire 

contractors with more lighting knowledge. In an analysis of fluorescent tube standards, Pacific 

Gas & Electric Company includes a scenario in which a high output T8 lamp is paired with a 

lower BF ballast, “because this option is standard practice in many retrofits to maintain lumen 

levels.”34 

For the above reasons, DOE estimates the likelihood of owners choosing a lower BF 

ballast given a more efficacious lamp to be 90 percent. DOE assumes the likelihood for 

electrical contractors and architects/electrical engineers to be 90 percent and 95 percent, 

respectively, for this market segment. 
10B-9

10B.4.4 BALLAST FAILURE 

DOE characterizes ballast failure as general operations and maintenance (O&M), as 

opposed to the above events which can be more easily considered capital investments requiring 

a greater degree of owner involvement. 

A decision based on a ballast failure is a reactive decision by nature and one that is 

unlikely to trigger the use of professional lighting designers with a high degree of technical 

sophistication. Ballast replacements are usually forced spot replacements driven by equipment 

failure. 

Building owners and managers often establish service contracts with contractors for 

O&M to include situations like ballast (and lamp) failures. Contractors can “strongly” 

influence owners in replacement situations.35

A study of commercial buildings O&M in the Pacific Northwest noted commercial 

owners (broadly defined to include building managers as DOE does here) outsourced lighting 

O&M responsibilities to outside contractors roughly 45 percent of the time.36 Therefore, DOE 

estimates that in the large commercial subsector electrical engineers/architects, owners, and 

electrical contractors make 10 percent, 50 percent, and 40 percent of the decisions, 

respectively, versus 0 percent, 60 percent, and 40 percent for the small commercial subsector. 

Using the blended average, architects/engineers make just 7 percent of the decisions, while 

owners and electrical contractors make 53 percent and 40 percent, respectively. 

DOE then estimated the likelihood of these agents choosing a lower BF, given a higher 

efficacy lamp. DOE found no data specific to the ballast failure market segment so DOE uses 

the probabilities it used in the R&R, adjusted downward based on the qualitative assumption 

that the ballast failure is a reactive decision less likely to involve thorough consideration of 

energy efficiency and lighting level factors. Additionally, DOE’s category of owners in the 

R&R market segment will often include developers, general contractors and capital providers 

with vested interests in energy savings, while in the ballast and lamp replacement categories 

owners include building and property managers more often. 

A California study reported, “Managers for some of the medium-size companies told us 

that the skill level of their general maintenance personnel does not extend beyond simple 

change outs. Changing a ballast may be beyond the skill level of the general maintenance 

person.”37 In contrast, 65 percent of the service contracts with outside contractors (such as 

electrical contractors) called for energy efficiency improvements in the Pacific Northwest 

study. 38

Therefore, DOE assumes engineers would use a lower BF ballast with a higher efficacy 

lamp 50 percent of the time in the ballast failure market segment, while owners and electrical 

contractors would do so 0 percent of the time. 
10B-10

10B.4.5 FIXTURE REPLACEMENTS 

DOE found very little data pertaining specifically to decision making in fixture 

replacements. However, this market segment—in terms of decision makers and their 

behavior—likely falls in between the ballast failure and renovation market segments. Fixture 

replacements are similar to ballast failures in that they are often forced by equipment failure. 

Fixtures may be spot-replaced just like ballasts, a scenario that would likely involve the same 

decision makers and behavior. On the other hand, fixture replacement is a more extensive 

replacement and may be done for all fixtures on a floor or in a building to maintain aesthetic 

consistency, more similar to the renovation market. Additionally, when someone purchases a 

fixture to replace a failed one, the fixture usually comes equipped with a ballast and lamp(s)—

the same way it would come to someone ordering for a major renovation. 

Therefore, DOE assumes decision maker and decision distributions that represent the 

average of the renovation and ballast failure market segments. Owners, architects/engineers, 

and electrical contractors will make 39 percent, 33 percent, and 28 percent of decisions, 

respectively. The same players will choose a lower BF 12.5 percent, 75 percent and 17.5 

percent of the time, respectively. 

10B.4.6 CONCLUSION 

Using the probabilities above, DOE derived the probabilities shown in Table 10B.1

describing the likelihood of a consumer using a lower BF with a higher efficacy lamp if lower 

wattage lamps were not feasible alternatives. DOE used these probabilities as inputs for its 

Market Segment-Based lighting expertise standards case scenarios. Conversely, in the High 

lighting expertise scenario, each of the below values would be 100 percent. 

Table 10B.1 Probability of Tuning a Lamp Ballast System in the Commercial Sector 

Probability of "Tuning" Lamp-Ballast System 

Ballast Replacement 7.6% 

Retrofit 91.8% 

Fixture Replacement 34.4% 

Major Renovation 68.9% 

New Construction 77.5% 

10B.5 THE MARKET SEGMENTS – RESIDENTIAL SECTOR 
10B-11

The residential sector represents roughly 20 percent of GSFL shipments. Nearly all 

residential GSFL fixtures are hardwired in kitchens, garages, and bathrooms. 39 In general, the 

majority of purchasing decisions in the residential sector are based on first cost or aesthetics, 

suggesting careful consideration of a ballast factor is much less likely than in the commercial 

sector given a higher efficacy lamp. 

10B.5.1 RENOVATION AND REMODELING 

Outside of new construction, homeowners and electrical contractors make the majority of 

lamp and fixture decisions for all of the market segments DOE analyzes.40 In renovations, 

general contractors usually have subcontractors (electrical contractors) select the equipment.41 

A 2002 study of the California R&R market found owners lighting purchase decision 69 

percent of the time, contractors did 16 percent and they both did in the 15 percent of the time.42 

Other studies mention a small role for architects, particularly for significant renovations. 

Using those numbers as a starting point, DOE adjusted those estimates to account for the 

fact that while owners often make the purchase decision it is usually the contractor or architect 

suggesting the equipment. DOE believes homeowners are more likely to be involved in the 

fixture decision, rather than the lamp and ballast decision. Additionally, some contractors have 

staff architects or electrical engineers who may specify the lighting equipment, particularly for 

major renovations. Therefore, DOE assumes owners, electrical contractors, 

architects/engineers, and general contractors/developers make 50 percent, 35 percent, 10 

percent, and 5 percent of the decisions, respectively. 

DOE then estimated the likelihood of these agents choosing a lower BF, given a higher 

efficacy lamp. Of those who remodeled hardwired lighting in the California study, only 61 

percent looked for information on energy efficiency. Further, only 40 percent said energy 

efficiency was a major factor in their decision to remodel the lighting design. Another survey 

found that specialized lighting electrical contractors tended to work more for commercial 

enterprises, whose jobs are more profitable, while residential jobs are completed by less 

specialized—and, presumably, less technically sophisticated—contractors.43 According to the 

study’s contractor interviews, residential installers often “have not completed apprenticeships 

and have not been technically trained.”44 In contrast, architects discuss energy efficiency in 

lighting renovations for “most or all” of their specifications. 45 

The above evidence suggests a low level of lighting energy efficiency sophistication for 

some decision makers in this segment. Overall, however, DOE believes the lack of technical 

expertise on the part of the installer or homeowner is somewhat offset by the fact that most 

lighting purchases in the R&R segment require new fixtures, which are usually equipped with a 

ballast and prescribe the lamp(s) to pair with it. In these cases, the lamp and ballast have 

already been specified, so decision maker lighting expertise, or lack thereof, may not come into 

play in all cases. A homeowner may simply buy the fixture (and accompanying ballast) at a 

DIY store and then select the suggested type of lamp on the box. In renovation and 

remodeling—as opposed to simple fixture replacement (discussed below)—DOE believes the 

homeowner will be more likely to consult agents in the service chain with greater lighting 
10B-12

expertise than themselves. For this reason, DOE believes homeowners are more likely to make 

energy saving decisions for fixture replacements that are part of a larger renovation (and thus 

more likely to engage knowledgeable lighting professionals) than with a spot fixture 

replacement purchase event. Further, the fact that some contractors/developers do not have 

significant energy efficiency expertise does not necessarily mean they are not concerned with 

establishing appropriate lighting levels, particularly given their desire to reduce costly callbacks (customers complaints on the performance of the equipment installed). On balance, 

DOE assumes homeowners, electrical contractors, general contractors/developers and 

architects will choose a lower BF ballast 50 percent, 25 percent, 75 percent, and 100 percent of 

the time. 

10B.5.2 NEW CONSTRUCTION 

In new residential construction, lighting specifications and design can involve at least 11 

parties, with decision makers varying by the type of construction (i.e., tract home, semi-custom 

home, custom home, or multifamily).46 For non-custom homes, the builder or their in-house 

procurement staff most likely specifies hardwired lighting fixtures, while electrical contractors 

“possibly” make specifiers, and homeowners are “unlikely” to.47 Generally, more expensive 

and customized home construction features a greater degree of homeowner involvement in 

lighting selections. However, even when homeowners are involved in the lighting decision, 

they often select from a limited number of options supplied by the builder, architect or other 

specialist. Further, builders frequently limit the options available to homeowners to minimize 

construction delays and homeowners agree with all or some of the suggested indoor fixtures 96 

percent of the time (significantly, homeowners agree with all suggestions 91 percent of the 

time) and do not agree only 4 percent of the time. 48

According to California’s Lighting Technology Sector’s Residential Lighting Design 

Guide, “Now more than ever, it is the responsibility of the builder to fully specify compliant 

fixtures to the contractor. With the changes in code [more stringent efficiency requirements in 

California’s Title 24 that became effective in 2005], manufacturer are trying to make it easier 

for builders and contractors to specify compliant fixtures.”49

Given the difference regarding homeowner involvement between the custom home 

submarket and the tract home submarket, DOE decided to break out the decision-maker 

probability distributions for each. U.S. Census data shows 22 percent of new residential single 

family homes completed in 2007 were custom built.50 After accounting for data on new 

multifamily units as well, DOE found that approximately 19.6 percent of all new residential 

square footage is custom built, while the remainder was built for sale. DOE uses those figures 

to weight the following assumptions: for non-custom homes, homebuilders make 60 percent of 

lighting decisions, while electrical contractor and architects (likely subcontracted by the 

builder/developer/general contractor) make 30 percent and 10 percent, respectively; for custom 

builders, homeowners, electrical contractors, and architects/engineers make 50 percent, 20 

percent, 20 percent and 10 percent of the decisions, respectively. These assumptions yield the 

following decision making distribution: homebuilders – 58 percent; electrical contractors – 28 
10B-13

percent; architects/engineers – 10 percent; and homeowners – 4 percent. The above-mentioned 

fact that 4 percent of homeowners do not follow the lighting specification suggestions of the 

other market agents corroborates these results. 

DOE then estimated the likelihood of these agents choosing a lower BF, given a higherefficacy lamp. Of the 11 parties referenced above, few “have significant lighting design 

expertise and virtually none have expertise in energy efficient residential lighting.” Builders 

often take first cost into consideration by choosing lighting fixtures that meet “minimal lighting 

requirements at a minimal budget” and do not seek energy-saving features except on the rare 

occasion home buyers request them.51 Still, as noted in the commercial sector discussion, first 

cost is not a consideration in this analysis because the purchaser is forced to buy the higherefficacy lamp by the standard and because a ballast must be purchased in addition to the lamp. 

Further, as with the R&R market segment, fixtures are often sold as a unit including a ballast 

and suggesting a specified lamp to pair with it. As mentioned above for other market 

segments, design guides nearly always instruct specifiers to determine the appropriate lumen 

output. Under “What to specify” in above-mentioned “Residential Lighting Design Guide,” 

the first item listed “specify the appropriate light output.”52 Given the above, DOE believes 

it’s appropriate to assume homebuilders/developers will often choose (knowingly or not) to use 

lower BF ballasts with higher-efficacy lamps. 

In sum, DOE assumes builders/developers would choose to pair lower BF ballasts with 

higher efficacy lamps 75 percent of the time. DOE uses the same probability for homeowners 

(25 percent), electrical contractors (25 percent), and architects/engineers (100 percent) as for 

the renovation market. 

10B.5.3 RETROFIT, BALLAST FAILURE, AND FIXTURE REPLACEMENTS 

DOE assumes residential lighting decisions in retrofit, ballast failure, and fixture 

replacements purchase events are always made by homeowners. Homeowners generally value 

first cost and aesthetics over energy efficiency.53 Homeowners are likely to make their 

purchases from large retailers such as do-it-yourself and hardware stores, supermarkets, or 

mass merchandisers where store staff does not have a solid understanding of fluorescent 

technologies and energy efficiency. 54, 55 DOE surveyed available products at these locations 

and assessed their packaging and labeling. DOE found that often ballast factor is not reported 

on the packaging. The lighting Frequently Asked Questions (FAQ) pages on the 

residential/consumer sections of most major manufacturers do not discuss ballast factor or 

other specific ways to achieve energy efficiency while preserving lumen output in full-size 

fluorescent lighting systems.56, 57 DOE considers it unlikely that homeowners will generally 

have the expertise to look for, find, and interpret the information necessary to make an 

educated decision on pairing a lower ballast factor with a higher efficacy lamp. As such, DOE 

assumes no homeowners will migrate to lower BF ballasts given a more efficacious lamp for 

these purchase events. 
10B-14

10B.5.4 CONCLUSION 

Using the probabilities above, DOE derived populated Table 10B.2 to describe the 

likelihood of consumers choosing a lower BF ballast with a higher efficacy lamp if lower 

wattage lamps not feasible alternatives. DOE used these probabilities as inputs for its Market 

Segment-Based lighting expertise standards case scenarios. Conversely, in the High lighting 

expertise scenario, each of the below values would each be 100 percent. 

Table 10B.2 Probability of Tuning a Lamp Ballast System in the Commercial Sector 

Probability of "Tuning" Lamp-Ballast System 

Major Renovation 47.5% 

New Construction 61.5% 

Retrofit 0.0% 

Ballast Replacement 0.0% 

Fixture Replacement 0.0% 
10B-15

 

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1

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U.S. Census Bureau, Statistics of U.S. Businesses. Last accessed July 21, 2008. 

http://www.sba.gov/advo/research/us_05ss.pdf 

2

 ADM Associates, Inc., TecMRKT Work LLC, "Nonresidential Remodeling and Renovation 

Study: Final and Summary Report", California Energy Commission, March 2002. 

3

 Xenergy, Inc., "Commercial and Industrial Lighting Study", Northwest Energy Efficiency 

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 Donald R. Dohrmann, John H. Reed, Sylvia Bender, Catherine Chappell, Pierre Landry, 

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Commission, 2002. 

5

 Ibid. 2 

6

 Jennifer Thorne, Steve Nadel, "Commercial Lighting Retrofits: A Briefing Report for Program 

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 "New York Energy $mart Program Evaluation and Status Report", New York State Energy 

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 “Engineering Analysis,” Department of Energy presentation at Public Meeting for Advance 

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9

 Ibid. 3 

10 “Purchasing Advisor: Lighting: Fluorescent Ballasts”, E Source Companies LLC, 2006. Last 

accessed on July 21, 2008. http://www.pnm.com/customers/tech_guides/PDF/P_PA_12.pdf 

11 Heschong Mahone Group, Lighting Efficiency Technology Report: Market Barriers Report, 

California Energy Commission, Vol. 3, September 1999. 

12 For example, see: http://content.sylvania.com/app/display.aspx?id=003691809; 

http://www.nam.lighting.philips.com/us/ecatalog/fluor/pdf/p-5369.pdf 

13 For example, see: 

http://www.gelighting.com/na/business_lighting/education_resources/literature_library/sell_shee
10B-16

 

ts/downloads/fluorescent/28337_f32t8_high_lumen_linear.pdf; 

http://www.lithonia.com/Products/groups/Fluorescent/MS5/MoreInfo/GE_T5Lamps.pdf

14 For example, see: http://www.lithonia.com/relight/PDFs/SUPERT8_FINAL_PIB.pdf; 

15 For example, see the New Building Institute’s Advanced Lighting Guide, page 6-35; 

California’s Lighting Technology Center’s Residential Lighting Guide, page 4; Craig DiLouie , 

"The Next Generation of Electronic Lighting Systems: Smaller, Smarter and Greater Energy 

Savings", Lighting Controls Association , 2003. 

16 “Advanced Lighting Guidelines: 2003 Edition”, New Building Institute, 2003. 

17 Ibid. 16 

18 http://resourcecenter.pnl.gov/cocoon/morf/ResourceCenter/dbimages/full/1427.jpg

19 http://www.ashrae.org/publications/detail/16468; 

20 Ibid. 11 

21 John H. Reed, "Decision-Making and Market Segments in the Commercial Sector Building 

Sector", TecMRKT Works, November 2002. 

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Efficiency, 2004. Last accessed July 21, 2008. http://www.cee1.org/com/com-lt/com-lt-id.pdf 

23 Lee A. Greer, Donald W. Jones, David J. Bjornstad, "Energy Efficiency, Building 

Productivity, and the Commercial Buildings Market", Oak Ridge National Laboratory, May 

2002. 

24 Ibid. 23 

25 Ibid. 23 

26 Cynthia C.Y. Tsao, Iris D. Tommelein, Integrated Product-Process Development By A Light 

Fixture Manufacturer, 2001 

27 Ibid. 3 

28 Ibid. 22 

29 Ibid. 3 

30 Ibid. 6 
10B-17

 31 Ibid. 6 

32 Ibid. 6 

33 Ibid. 6 

34 Katie Ackerly, Steven Nadel, Stan Walerczyk, Analysis of Standards Options for Fluorescent 

Tubes, Pacific Gas and Electric Company, January 2008. 

35 John H. Reed, "Renovation and Remodeling: A Qualitative View", California Energy 

Commission, July 2001. 

36 Quantum Consulting and SBW Consulting, Inc., "Commercial Buildings Operations and 

Maintenance Market Assessment", Northwest Energy Efficiency Alliance, October 2006. 

37 ADM Associates, Inc., TecMRKT Work LLC, "Statewide Survey of Multifamily Common 

Area Building Owners Market", Southern California Edison Co., Vol 1, June 2000. 

38 Ibid. 36 

39 Judy Jennings, Rich Brown, Mithra Moezzi, Evan Mills, Robert Sardinsky. “An Assessment 

of the U.S. Residential Lighting Market.” Lawrence Berkeley National Laboratory. 1995. Last 

accessed July 21, 2008. 

40 Opinion Dynamics Corporation, “Residential Lighting Fixture Market Assessment: Ceiling 

Fans and Outdoor Lighting.” Final Report. October 2000. Last accessed May 12, 2008. 

41 Quantum Consulting, "Residential Discretionary Retrofit and Time of Sale Renovation Market 

Characterization", Pacific Gas and Electric Company, July 1999. 

42 Primen: The Response Center, "California Residential Remodeling/Renovation Market 

Study", Southern California Edison Co., PG&E, San Diego Gas and Electric, Southern California 

Gas Company, July 2001. 

43 Ibid. 41 

44 Ibid. 41 

45 Ibid. 41 

46 Ecos Consulting, "Energy Efficiency Lighting in New Construction", Northwest Energy 

Efficiency Alliance, May 2002. 
10B-18

 47 Diana Vorsatz, Leslie Shown, Jonathan Koomey,Mithra Moezzi, Andrea Denver, and Barbara 

Atkinson, The Lighting Market Sourcebook for the U.S., Lawrence Berkley National Laboratory, 

1997 

48 Ibid. 40 

49 “Residential Lighting Design Guide,” California Lighting Technology Center, 2005. 

50 U.S. Census Bureau. Last accessed on July 22, 2008. 

http://www.census.gov/const/www/charindex.html#singlecomplete 

51 Ibid. 41 

52 “Residential Lighting Design Guide,” California Lighting Technology Center, 2005. 

53 Ibid. 42 

54 Ibid. 42 

55 Ibid. 42 

56 “GE Consumer and Industrial Lighting: Ask Us: FAQs – Ballasts and Fluorescent Tubes.” 

General Electric Company. 2008. Last accessed July 21, 2008. 

http://www.gelighting.com/na/home_lighting/ask_us/faq_ballasts.htm 

57 “Lighting for the Home – FAQ.” Koninklijke Philips Electronics N.V. 2008. Last accessed 

July 21, 2008. http://www.nam.lighting.philips.com/us/consumer/faq.php