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CHAPTER 12. PRELIMINARY MANUFACTURER IMPACT ANALYSIS 

TABLE OF CONTENTS 

12.1 INTRODUCTION ......................................................................................................... 12-1

12.2 METHODOLOGY ........................................................................................................ 12-1

12.2.1 Phase I: Industry Profile..................................................................................... 12-2

12.2.2 Phase II: Industry Cash Flow Analysis and Interview Guide ............................ 12-2

12.2.2.1 Industry Cash Flow Analysis ........................................................... 12-2

12.2.2.2 Interview Guide ............................................................................... 12-2

12.2.3 Phase III: Subgroup Analysis............................................................................. 12-3

12.2.3.1 Manufacturer Interviews .................................................................. 12-3

12.2.3.2 Revised Industry Cash Flow Analysis ............................................. 12-3

12.2.3.3 Manufacturer Subgroup Analysis .................................................... 12-3

12.2.3.4 Competitive Impact Assessment ...................................................... 12-4

12.2.3.5 Manufacturing Capacity Impact ...................................................... 12-4

12.2.3.6 Employment Impact ......................................................................... 12-4

12.2.3.7 Cumulative Regulatory Burden ....................................................... 12-4

12.3 INDUSTRY OVERVIEW ............................................................................................. 12-5

12.3.1 Industry Cost Structure ...................................................................................... 12-5

12.3.2 Inventory Levels ................................................................................................ 12-6

12.4 INTERVIEW TOPICS AND PRELIMINARY FINDINGS ......................................... 12-6

12.4.1 Market Shares and Industry Consolidation ........................................................ 12-7

12.4.2 Production and Product Mix .............................................................................. 12-7

12.4.2.1 Impact on Product Mix .................................................................... 12-8

12.4.2.2 Product Utility .................................................................................. 12-8

12.4.3 Conversion Costs ............................................................................................... 12-8

12.4.4 Cumulative Regulatory Burden ......................................................................... 12-8

12.5 OVERALL KEY ISSUES ............................................................................................. 12-9

12.5.1 Rare Earth Materials .......................................................................................... 12-9

12.5.2 Unknown Impacts of the 2009 Lamps Rule ...................................................... 12-9

12.5.3 Testing Burden ................................................................................................. 12-10

12.5.4 Technology Shift .............................................................................................. 12-10

12.5.5 Product Innovation ........................................................................................... 12-10

12.5.6 Impact on Residential Sector ........................................................................... 12-10
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LIST OF TABLES 

Table 12.3.1 Electric Lamp Bulb and Part Industry Employment and Earnings ....................... 12-5

Table 12.3.2 Electric Lamp Bulb and Part Industry Material and Payroll Costs....................... 12-6

Table 12.3.3 Commercial Lighting Fixture Industry End-of-Year Inventory ........................... 12-6
12-1

CHAPTER 12. PRELIMINARY MANUFACTURER IMPACT ANALYSIS 

12.1 INTRODUCTION 

The purpose of the manufacturer impact analysis (MIA) is to identify and quantify the 

likely impacts of amended energy conservation standards on manufacturers. The Process Rulea

provides guidance for conducting this analysis with input from manufacturers and other 

interested parties. The U.S. Department of Energy (DOE) will apply this methodology to its 

evaluation of amended energy conservation standards for general service fluorescent lamps 

(GSFLs) and incandescent reflector lamps (IRLs). DOE will consider financial impacts and a 

wide range of quantitative and qualitative industry impacts. For example, a particular standard 

level could require changes to manufacturing practices for GSFLs and IRLs. DOE will identify 

and analyze these impacts through interviews with manufacturers and other interested parties 

during the notice of proposed rulemaking (NOPR) stage of the analysis. 

DOE announced changes to the MIA format through a report issued to Congress in

January 2006 (as required by section 141 of the Energy Policy Act of 2005 [EPAct 2005]), 

entitled “Energy Conservation Standards Activities.”b

Previously, DOE did not report any MIA 

results before the NOPR phase; however, under this new format, DOE collects, evaluates, and 

reports preliminary information and data in the preliminary analysis. Such information includes 

market data, key issues, product mixes, conversion costs, foreign competition, market shares, 

industry consolidation, and cumulative regulatory burden information. DOE solicits this 

information during the preliminary manufacturer interviews and reports the results in this chapter 

of the preliminary technical support document (TSD). Appendix 12A includes a copy of the 

interview guide that DOE distributed to manufacturers. 

12.2 METHODOLOGY 

DOE conducts the MIA in three phases. In Phase I, DOE creates an industry profile to 

characterize the industry and conducts preliminary MIA interviews to identify important issues 

that require consideration. Section 12.3 of this chapter presents initial findings of the Phase I 

analysis. In Phase II, DOE prepares an industry cash flow model and an interview questionnaire 

to guide subsequent discussions with manufacturers. In Phase III, DOE interviews manufacturers 

and assesses the impacts of amended energy conservation standards both quantitatively and 

qualitatively. DOE assesses industry and subgroup cash flow impacts and the industry net 

present value (INPV) using the Government Regulatory Impact Model (GRIM). DOE then 

assesses impacts on competition, manufacturing capacity, employment, and regulatory burden, 

 

a

 On July 15, 1996, the Department of Energy published a Process Improvement Rule establishing procedures, 

interpretations, and policies to guide the Department in the consideration of new or revised appliance efficiency 

standards (Procedures for Consideration of New or Revised Energy Conservation Standards for Consumer 

Products). 61 FR 36974. 

b

 This report is available on the DOE website at: 

www1.eere.energy.gov/buildings/appliance_standards/pdfs/congressional_report_013106.pdf 
12-2

based on manufacturer interviews and discussions. The NOPR and TSD will both present results 

of the Phase II and III analyses.

12.2.1 Phase I: Industry Profile 

In Phase I of the MIA, DOE collects pertinent qualitative and quantitative financial and 

market information. This includes research and development (R&D) expenses; selling, general, 

and administrative (SG&A) expenses; capital expenditures; property, plant, and equipment 

expenses; tax rate; and depreciation rate for GSFL and IRL manufacturers, as well as wages, 

employment, and industry costs for GSFLs and IRLs. Sources of information include reports 

published by industry groups, trade journals, the U.S. Census Bureau, and Securities Exchange 

Commission (SEC) 10-K filings. In addition, DOE relies on information from its market and 

technology assessment, engineering analysis, life-cycle cost analysis, and consumer price 

analysis, as well as feedback from preliminary manufacturer interviews, to characterize the 

GSFL and IRL manufacturing industries. 

12.2.2 Phase II: Industry Cash Flow Analysis and Interview Guide 

Phase II activities occur after publication of the preliminary analysis. In Phase II, DOE 

performs a preliminary industry cash flow analysis and prepares a questionnaire, or interview 

guide, for interviewing manufacturers. 

12.2.2.1 Industry Cash Flow Analysis 

DOE uses the GRIM to analyze the financial impacts of amended energy conservation 

standards. The implementation of these standards may require additional investment, raise 

production costs, and/or affect revenue through higher prices and lower shipments. The GRIM 

uses several factors to determine a series of annual cash flows for the years leading up to the 

effective date of amended energy conservation standards and for several years after 

implementation. These factors include annual expected revenues, costs of sales, SG&A costs, 

taxes, and capital expenditures. Inputs to the GRIM include financial information, manufacturing 

costs, shipment forecasts, and price forecasts developed in other analyses. Financial information 

is developed based on publicly available data and confidentially submitted manufacturer 

information. DOE compares the GRIM results for the standards case at each trial standard level 

(TSL) against the results for the base case, in which no amended energy conservation standards 

are in place. The financial impact of amended energy conservation standards is the difference 

between the two sets of discounted annual cash flows. 

12.2.2.2 Interview Guide 

DOE conducts interviews with manufacturers to gather information on the effects 

amended energy conservation standards could have on revenues and finances, direct 

employment, capital assets, and industry competitiveness. These interviews take place during 

Phase III of the MIA. Before the interviews, DOE distributes an interview guide that will help 

identify the impacts of amended energy conservation standards on individual manufacturers or 

subgroups of manufacturers within the GSFL and IRL industries. The interview guide covers 

production costs; shipment projections; market share; product mix; conversion costs; markups 
12-3

and profitability; assessment of the impact on competition; manufacturing capacity; and other 

relevant topics. 

12.2.3 Phase III: Subgroup Analysis 

Phase III activities occur after publication of the preliminary analysis. These activities 

include manufacturer interviews; revision of the industry cash flow analysis; a manufacturer 

subgroup analysis; an assessment of the impacts on industry competition, manufacturing 

capacity, direct employment, and the cumulative regulatory burden; and other qualitative 

impacts. 

12.2.3.1 Manufacturer Interviews 

DOE supplements the information gathered in Phase I and the cash flow analysis 

performed in Phase II with information gathered through interviews with manufacturers during 

Phase III. The interview process plays a key role in the MIA because it provides an opportunity 

for interested parties to express their views privately on important issues. 

DOE conducts detailed interviews with manufacturers to gain insight into the potential 

impacts of amended energy conservation standards on sales, direct employment, capital assets, 

and industry competitiveness. Interviews are scheduled well in advance to provide every 

opportunity for key individuals to be available for comment. Although a written response to the 

questionnaire is acceptable, DOE prefers interactive interviews, which help clarify responses and 

provide the opportunity to identify additional issues. 

A non-disclosure agreement allows DOE to consider confidential or sensitive information 

in the decision-making process. Confidential information, however, is not made available in the 

public record. At most, sensitive or confidential information may be aggregated and presented in 

industry-wide representations. 

12.2.3.2 Revised Industry Cash Flow Analysis 

During the interviews, DOE requests information about profitability impacts, necessary 

plant changes, and other manufacturing impacts. Following the interviews, DOE revises the 

preliminary GRIM prepared in Phase II based on the feedback it receives during interviews.

12.2.3.3 Manufacturer Subgroup Analysis 

The use of average cost assumptions to develop an industry cash flow estimate does not 

adequately assess differential impacts of amended energy conservation standards among 

manufacturer subgroups. Smaller manufacturers, niche players, and manufacturers exhibiting a 

cost structure that differs largely from the industry average could be more negatively affected. 

Ideally, DOE would consider the impact on every firm individually; however, it typically uses 

the results of the industry characterization to group manufacturers with similar characteristics. 

During the interviews, DOE discusses the potential subgroups that have been identified for the 

analysis. DOE asks manufacturers and other interested parties to suggest what subgroups or 

characteristics are most appropriate for the analysis. 
12-4

One common subgroup identified is small business manufacturers. Should DOE 

determine this rulemaking impacts any small business manufacturers, DOE will conduct a 

regulatory flexibility analysis pursuant to the Regulatory Flexibility Act. (5 U.S.C. 601 et seq.) 

12.2.3.4 Competitive Impact Assessment 

Section 342 (6)(B)(i)(V) of the Energy Policy Act of 1992 (EPAct 1992) directs DOE to 

consider any lessening of competition likely to result from the imposition of standards. EPAct 

1992 further directs the U.S. Attorney General to determine any likely impacts resulting from a

decrease in competition. DOE gathers firm-specific financial information and attempts to 

determine the impact of amended standards on industry competition. The results of this effort are 

reported in the competitive impact assessment. The competitive impact assessment is based on 

manufacturer cost data and information collected from the manufacturer interviews. The 

interviews focus on assessing asymmetrical cost increases to some manufacturers, the potential 

increase in business risks from an increased proportion of fixed costs, and potential barriers to 

market entry (e.g., proprietary technologies). The competitive impact analysis also focuses on 

assessing any differential impacts to smaller manufacturers. 

12.2.3.5 Manufacturing Capacity Impact 

One of the significant outcomes of amended energy conservation standards can be the 

obsolescence of existing manufacturing assets, including tooling and other investments. The 

manufacturer interview guide has a series of questions to help identify impacts on manufacturing 

capacity, specifically capacity utilization and plant location decisions in North America with and 

without amended energy conservation standards; the ability of manufacturers to upgrade or 

remodel existing facilities to accommodate the new requirements; the nature and value of any 

stranded assets; and estimates for any one-time restructuring or other charges, where applicable. 

12.2.3.6 Employment Impact 

The impact of amended energy conservation standards on employment is an important 

consideration in the rulemaking process. Manufacturer interviews play a significant role in 

assessing how domestic employment patterns might be impacted by amended energy 

conservation standards. The interview guide contains a series of questions that are designed to 

explore current employment trends in the GSFL and IRL industries and to solicit manufacturers’ 

views on changes in employment patterns that may result from increased standard levels. These 

questions focus on current employment levels at production facilities, expected future 

employment levels with and without amended energy conservation standards, differences in 

workforce skills, and employee retraining.

12.2.3.7 Cumulative Regulatory Burden 

DOE seeks to mitigate the overlapping effects on manufacturers of energy conservation 

standards and other regulatory actions affecting the same products or companies. DOE analyzes 

and considers the impact of multiple, product-specific regulatory actions on manufacturers. 
12-5

12.3 INDUSTRY OVERVIEW 

The following section summarizes publicly available industry data. 

12.3.1 Industry Cost Structure 

DOE developed the GSFL and IRL industry cost structure from the U.S. Census Bureau 

Annual Survey of Manufacturers: Statistics for Industry Groups and Industries with data from 

2002 to 2010. Both GSFL and IRL manufacturing is classified under the North American 

Industry Classification System (NAICS) code 335110 (Electric Lamp Bulb and Part 

Manufacturing).

DOE is unaware of any publicly available industry-wide cost data specific to only 

manufacturers of GSFLs and IRLs. DOE presents the data below as a broader industry proxy for 

the GSFL and IRL industries. 

Table 12.3.1 presents the electric lamp bulb and part employment levels and payroll from 

2002 to 2010. The statistics show a 36.2 percent decrease in the number of production workers 

from 2002 to 2010, with a corresponding 4.9 percent decrease in the overall industry payroll 

from 2002 to 2010. 

Table 12.3.1 Electric Lamp Bulb and Part Industry Employment and Earnings 

Year Production Workers All Employees Payroll for All Employees

thousand current year U.S. dollars

2002 9,595 11,552 489,781

2003 8,972 10,790 481,524

2004 8,022 9,867 512,514

2005 7,604 9,289 495,057

2006 6,669 8,192 449,809

2007 7,477 9,358 447,983

2008 7,811 10,050 457,719

2009 6,419 7,612 415,900

2010 6,120 7,724 465,734

U.S. Census Bureau. Annual Survey of Manufacturers: 2005 and Earlier Years; Annual Survey of 

Manufacturers: 2006 and 2005; Annual Survey of Manufacturers: 2008 and 2007; Annual Survey of 

Manufacturers: 2009 and 2008; and Annual Survey of Manufacturers: 2010 and 2009

Table 12.3.2 presents the costs of electric lamp bulb and part materials and industry 

payroll as a percentage of shipment value from 2002 to 2010. The cost of materials has 

significantly increased by 52.8 percent as a percentage of shipment value from 2002 to 2010. 

While the cost of payroll for production workers has slightly decreased by 1.4 percent, the cost 

of payroll for all employees has moderately increased by 14.1 percent as a percentage of 

shipment value from 2002 to 2010. 
12-6

Table 12.3.2 Electric Lamp Bulb and Part Industry Material and Payroll Costs 

Year Cost of Materials

percent of shipment value

Cost of Payroll for 

Production Workers

percent of shipment value

Cost of Payroll for All 

Employees

percent of shipment value

2002 33.9 14.5 18.6

2003 36.0 14.0 18.5

2004 35.8 15.4 20.4

2005 42.6 15.6 20.8

2006 44.6 15.7 20.9

2007 44.7 14.7 20.3

2008 47.2 13.4 21.5

2009 49.0 16.3 21.4

2010 51.8 14.3 21.3

U.S. Census Bureau. Annual Survey of Manufacturers: 2005 and Earlier Years; Annual Survey of 

Manufacturers: 2006 and 2005; Annual Survey of Manufacturers: 2008 and 2007; Annual Survey of 

Manufacturers: 2009 and 2008; and Annual Survey of Manufacturers: 2010 and 2009

12.3.2 Inventory Levels 

Table 12.3.3 shows the year-end inventory for the electric lamp bulb and part industry 

obtained from the U.S. Census Bureau Annual Survey of Manufacturer: Statistics for Industry 

Groups and Industries with data from 2002 to 2010. The industry’s end-of-year inventory from 

2002 to 2010 decreased 4.4 percent when expressed in U.S. dollars, and grew moderately by 14.8 

percent when expressed as a percentage of shipment value. 

Table 12.3.3 Commercial Lighting Fixture Industry End-of-Year Inventory 

Year End-of-Year Inventory

thousand current year U.S. dollars

End-of-Year Inventory

percent of shipment value

2002 213,569 8.1

2003 212,207 8.2

2004 226,482 9.0

2005 235,934 9.9

2006 227,013 10.5

2007 254,351 11.5

2008 255,709 12.0

2009 178,773 9.2

2010 204,270 9.3

U.S. Census Bureau. Annual Survey of Manufacturers: 2005 and Earlier Years; Annual Survey of 

Manufacturers: 2006 and 2005; Annual Survey of Manufacturers: 2008 and 2007; Annual Survey of 

Manufacturers: 2009 and 2008; and Annual Survey of Manufacturers: 2010 and 2009

12.4 INTERVIEW TOPICS AND PRELIMINARY FINDINGS 

The following section summarizes information gathered during interviews held in the 

second and third quarters of 2012 for the preliminary MIA. 
12-7

12.4.1 Market Shares and Industry Consolidation 

Amended energy conservation standards can alter the competitive dynamics of the 

marketplace, prompting companies to enter the market, exit the market, or merge with other 

companies. The preliminary MIA interview questions asked manufacturers to share their 

perspectives on industry consolidation both in the absence of amended energy conservation 

standards and assuming amended standards at various efficacy levels. The interview questions 

focused on gathering information that assessed: 

• disproportionate cost increases to some manufacturers; 

• increased proportion of fixed costs potentially increasing business risks; and 

• potential barriers to market entry (e.g., proprietary technologies). 

The need to assess anti-competitive effects of amended energy conservation standards 

comes from the need to protect consumer interests. During the interviews, DOE solicited 

information to determine whether amended energy conservation standards could result in 

disproportionate economic or performance penalties for particular consumer or user subgroups. 

Manufacturers were also asked if amended energy conservation standards could result in 

products that will be more or less desirable to consumers due to changes in product functionality, 

utility, or other features. 

Market Shares: DOE inquired about the current market share of manufacturers in the 

GSFL and IRL industries and how those market shares might change due to the imposition of 

amended energy conservation standards. Most manufacturers expected their market share to 

remain constant. However, some raised concerns that the IRL shipments may decrease as a result 

of standards. Further, manufacturers noted that because high performance GSFLs and IRLs are 

more sensitive to price increases, consumers may want to purchase a cheaper, less efficient 

product. While these manufacturers may lose GSFL sales, most large GSFL manufacturers also 

manufacture the majority of the replacement technologies that would likely be used if consumers 

switched from GSFL lighting to another lighting technology. 

Industry Consolidation: The GSFL and IRL industries are mainly composed of a few 

large manufacturers, but there are a handful of smaller manufacturers. As described in chapter 3 

of this TSD, three manufacturers hold the majority of the domestic market share of GSFLs and 

IRLs. The lighting divisions of most of these companies also manufacture other products, such as 

halogen lamps, light emitting diodes (LEDs), and compact fluorescent lamps (CFLs). 

Most interviewed manufacturers did not think there would be significant consolidation in 

the GSFL or IRL industries in the absence of standards. They also agreed that amended standards 

most likely would not lead to additional consolidation. However, some manufacturers stated that 

the smaller GSFL and IRL manufacturers could be disproportionately affected by a standard that 

required significant conversion costs. 

12.4.2 Production and Product Mix 

DOE requested manufacturers’ feedback on what they perceived to be the possible 

impact of amended energy conservation standards on cash flow and profitability. For instance, 

the capital and product conversion outlays needed to upgrade or redesign products before they 
12-8

have reached the end of their useful life may result in reduced cash flow and stranded 

investments. Higher energy conservation standards could also result in higher per-unit costs that 

could cause consumers to shift to less expensive products. 

12.4.2.1 Impact on Product Mix 

Manufacturers believe that amended energy conservation standards could affect the 

product mix of GSFLs and IRLs depending on the efficacy levels selected for the standards. 

Some manufacturers stated they may shorten the lifetime of IRLs in order to comply with the 

higher amended standard levels. 

12.4.2.2 Product Utility 

A few manufacturers expressed concern that amended energy conservation standards 

might require changes in product functionality, utility, and other features that would make 

products less desirable to consumers. These manufacturers stated that for IRLs if efficacy 

standards were significantly more stringent, manufacturers might have to shorten the life of the 

lamp to meet those more stringent standards. 

12.4.3 Conversion Costs 

In some instances, manufacturers may be able to meet proposed standard levels by 

modifying existing products. In other cases, the necessary changes may entail a complete 

product-line redesign. In either case, more stringent energy conservation standards would cause 

manufacturers to incur one-time capital and product conversion costs. Capital conversion costs 

are one-time investments in property, plant, and equipment. Product conversion costs include 

one-time investments in research, product development, testing, and marketing. 

All manufacturers stated that the conversion costs associated with amended standards 

would depend on the efficacy level established by those standards. However, several 

manufacturers stated that millions of U.S. dollars would be required for testing, accreditation, 

and laboratory expenditures due to amended energy conservation standards for GSFLs and IRLs. 

Manufacturers also expressed concern that amended standards may force them to shut down 

some production lines and retool plants they recently retooled for the final rule published in July 

2009 (hereafter the “2009 Lamps Rule”). 74 FR 34080 (July 14, 2009).cSome stated they may 

decide to invest in other technologies, such as LEDs, rather than spend money on bringing their 

current product lines into compliance with amended standards. 

12.4.4 Cumulative Regulatory Burden 

While any one regulation may not impose a significant burden on manufacturers, the 

combined effects of several impending regulations may have serious consequences for individual 

 

c

 Information regarding the 2009 Lamps Rule can be found on regulations.gov, docket number EERE-2006-STD0131 at www.regulations.gov/#!docketDetail;D=EERE-2006-STD-0131. 
12-9

manufacturers, groups of manufacturers, or entire industries. Assessing the impact of a single 

regulation may overlook this cumulative regulatory burden. 

Expenditures associated with meeting other regulations are an important aspect of DOE’s 

consideration of the cumulative regulatory burden the industry faces. The manufacturer 

interviews helped DOE identify the level and timing of investments manufacturers are expecting 

to incur because of these regulations. Manufacturers were also asked under what circumstances 

they might be able to make expenditures related to regulations and energy conservation 

standards. 

Several Federal and international regulatory programs may affect the markets for GSFLs. 

The market and technology assessment discusses some of the notable initiatives that characterize 

recent developments in the lighting market. See chapter 3 of this TSD for a list and description of 

the regulatory requirements DOE identified. 

Several of the large GSFL and IRL manufacturers also manufacture other lighting 

products that are regulated by other DOE efficiency standards, such as the fluorescent lamp 

ballast standards (76 FR 70548 [Nov. 14, 2011]) and the general service incandescent lamps 

standards (74 FR 12058 [March 23, 2009]). Additionally, there are existing GSFL and IRL 

standards implemented by the 2009 Lamps Rule that require compliance. 

12.5 OVERALL KEY ISSUES 

An important aspect of the preliminary MIA is the opportunity it creates for DOE to 

identify key manufacturer issues early in the evaluation of amended energy conservation 

standards. During preliminary interviews manufacturers identified six major areas of concern: (1) 

rare earth materials, (2) unknown impacts of the 2009 Lamps Rule, (3) testing burden, (4) 

technology shift, (5) product innovation, and (6) impact on the residential sector. 

12.5.1 Rare Earth Materials 

Several manufacturers noted that amended standards for GSFLs could have adverse 

impacts on the domestic production of these products due to the fact that more rare earths would 

be necessary to make GSFLs more efficacious. China is currently the dominant miner and 

producer of rare earths worldwide and also imposes quotas on their raw rare earth exports, which 

drives up costs for manufacturers outside of China. As a result, manufacturers pointed out that 

amended standards could make it more attractive to manufacture GSFLs in China, rather than 

domestically. Several manufacturers stated that China’s restriction on the volume of rare earths 

exported should be cause for DOE to declare extenuating circumstances and delay a final rule. 

12.5.2 Unknown Impacts of the 2009 Lamps Rule 

Several manufacturers expressed concern that amended energy conservation standards 

would be premature given that the last round of standards required compliance in July 2012. 

Manufacturers are unsure how the standards from the 2009 Lamps Rule will ultimately affect 

their sales and shipments as consumer preferences shift due to the relatively elastic lighting 

market. Manufacturers noted that they have developed new products to meet the July 2012 

standards and are waiting to see which consumers order which products. 
12-10

12.5.3 Testing Burden 

Several manufacturers expressed concern regarding the testing burden associated with 

standards for GSFLs and IRLs. Manufacturers stated that there are already numerous testing 

requirements for compliance and certification, and amended GSFL and IRL standards would be 

overly burdensome. Increased regulation could force manufacturers to increase the size of their 

current test laboratories and the number of man-hours associated with compliance testing. 

Additionally, the increase in the number of hours of testing would increase manufacturers’ 

energy use, along with their electricity bills. 

12.5.4 Technology Shift 

Manufacturers reported that regardless of amended standards, a technological shift away 

from GSFLs and IRLs is already occurring. Several pointed out that the market is moving toward 

LED technology, especially in the commercial sector because of rebates and the return on 

investment offered by this technology. Manufacturers pointed out that amended energy 

conservation standards could potentially increase the prices of GSFLs and IRLs and thereby 

accelerate this migration to alternative technologies. 

12.5.5 Product Innovation 

Manufacturers expressed concern that this GSFL and IRL rulemaking could divert 

resources from the R&D of more efficient lighting products, such as LEDs, by forcing 

manufacturers to spend time and money on products with diminishing market shares. 

Manufacturers would be forced to reallocate resources away from LEDs to make improvements 

to GSFLs and IRLs that could potentially increase end-user cost and ultimately drive consumers 

to purchase other lighting technologies. 

12.5.6 Impact on Residential Sector 

Several manufacturers expressed concern that amended standards for GSFLs and IRLs 

would not achieve substantial energy savings in the residential sector. Residential consumers do 

not have long operating hours and manufacturers are concerned that consumers of IRLs will give 

up longer life for a cheaper and less efficacious lamp, especially given the high first costs and 

long payback periods of more efficient technologies, such as LEDs. Furthermore, manufacturers 

expressed concern that amended standards may be overly burdensome by forcing some 

residential consumers of GSFLs to switch out their entire systems for minimal energy savings.