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CHAPTER 13. INTERIM MANUFACTURER IMPACT ANALYSIS 

TABLE OF CONTENTS 

13.1 INTRODUCTION ......................................................................................................... 13-1

13.2 METHODOLOGY ........................................................................................................ 13-1

13.2.1 Phase I: Industry Profile..................................................................................... 13-2

13.2.2 Phase II: Industry Cash Flow Analysis and Interview Guide ............................ 13-2

13.2.2.1 Industry Cash Flow Analysis ........................................................... 13-2

13.2.2.2 Interview Guide ............................................................................... 13-2

13.2.3 Phase III: Subgroup Analysis............................................................................. 13-3

13.2.3.1 Manufacturer Interviews .................................................................. 13-3

13.2.3.2 Revised Industry Cash Flow Analysis ............................................. 13-3

13.2.3.3 Manufacturer Subgroup Analysis .................................................... 13-3

13.2.3.4 Competitive Impact Assessment ...................................................... 13-4

13.2.3.5 Manufacturing Capacity Impact ...................................................... 13-4

13.2.3.6 Employment Impact ......................................................................... 13-4

13.2.3.7 Cumulative Regulatory Burden ....................................................... 13-4

13.3 INDUSTRY OVERVIEW ............................................................................................. 13-4

13.3.1 Industry Cost Structure ...................................................................................... 13-5

13.3.2 Inventory Levels ................................................................................................ 13-6

13.4 INTERVIEW TOPICS AND PRELIMINARY FINDINGS ......................................... 13-6

13.4.1 Market Shares and Industry Consolidation ........................................................ 13-7

13.4.2 Production and Product Mix .............................................................................. 13-8

13.4.2.1 Impact on Product Mix .................................................................... 13-8

13.4.2.2 Product Utility .................................................................................. 13-8

13.4.3 Conversion Costs ............................................................................................... 13-8

13.4.4 Cumulative Regulatory Burden ......................................................................... 13-9

13.5 OVERALL KEY ISSUES ............................................................................................. 13-9

13.5.1 Energy Savings from Replacement HID Lamps ................................................ 13-9

13.5.2 Testing Burden ................................................................................................. 13-10

13.5.3 Technology Shift .............................................................................................. 13-10

13.5.4 Product Innovation ........................................................................................... 13-10
13-ii

LIST OF TABLES 

Table 13.3.1 Electric Lamp Bulb and Part Industry Employment and Earnings .................... 13-5

Table 13.3.2 Electric Lamp Bulb and Part Industry Material and Payroll Costs .................... 13-6

Table 13.3.3 Commercial Lighting Fixture Industry End-of-Year Inventory ........................ 13-6
13-1

CHAPTER 13. INTERIM MANUFACTURER IMPACT ANALYSIS 

13.1 INTRODUCTION 

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

likely impacts of new 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 new energy conservation standards for high-intensity discharge (HID) lamps. DOE 

will consider financial impacts and a wide range of quantitative and qualitative industry impacts 

that might result from new energy conservation standards. For example, a particular standard 

level could require changes to manufacturing practices for HID lamps. 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

February 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 interim 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. Appendix 13A includes a copy of the interview guides that DOE distributed to 

manufacturers. 

13.2 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 13.3 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 new 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 

http://www1.eere.energy.gov/buildings/appliance_standards/pdfs/2010_feb_report_to_congress.pdf
13-2

based on manufacturer interviews and discussions. The Federal Register NOPR and technical 

support document (TSD) will both present results of the Phase II and III analyses.

13.2.1 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 HID lamp manufacturers as well as wages, 

employment, and industry costs for HID lamps. 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 customer price 

analysis to characterize the HID lamp manufacturing industry. 

13.2.2 Phase II: Industry Cash Flow Analysis and Interview Guide 

In Phase II, DOE performs an interim industry cash flow analysis and prepares a 

questionnaire, or interview guide, for interviewing manufacturers. 

13.2.2.1 Industry Cash Flow Analysis 

DOE uses the GRIM to analyze the financial impacts of new 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 new 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 new energy conservation standards are in place. The 

financial impact of new energy conservation standards is the difference between the two sets of 

discounted annual cash flows. 

13.2.2.2 Interview Guide 

DOE conducts interviews with manufacturers to gather information on the effects new

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 

new energy conservation standards on individual manufacturers or subgroups of manufacturers 

within the HID lamp industry. The interview guide covers production costs; shipment 

projections; market share; product mix; conversion costs; markups and profitability; assessment

of the impact on competition; manufacturing capacity; and other relevant topics. 
13-3

13.2.3 Phase III: Subgroup Analysis 

Phase III activities occur after publication of the interim 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. 

13.2.3.1 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 has 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 new 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. 

13.2.3.2 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.

13.2.3.3 Manufacturer Subgroup Analysis 

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

adequately assess differential impacts of new 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. 

One common subgroup identified is small business manufacturers. Should DOE 

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

flexibility analysis pursuant to the Regulatory Flexibility Act. (5 U.S.C. 601 et seq.) 
13-4

13.2.3.4 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 new 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. 

13.2.3.5 Manufacturing Capacity Impact 

One of the significant outcomes of new 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 new 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. 

13.2.3.6 Employment Impact 

The impact of new 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 new conservation standards. 

The interview guide contains a series of questions that are designed to explore current 

employment trends in the HID lamp industry 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 new energy conservation standards, differences in workforce skills, and employee 

retraining.

13.2.3.7 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. 

13.3 INDUSTRY OVERVIEW 

The following section summarizes publicly available industry data. 
13-5

13.3.1 Industry Cost Structure 

DOE developed the HID lamp 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. HID lamp 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 HID lamps. DOE presents the data below as a broader industry proxy for the 

HID lamp industry.

Table 13.3.1 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 13.3.1 Electric Lamp Bulb and Part Industry Employment and Earnings 

Year Production Workers All Employees Payroll for All Employees

thousand current year 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 13.3.2 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 and the 

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

shipment value from 2002 to 2010. 
13-6

Table 13.3.2 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

13.3.2 Inventory Levels 

Table 13.3.3 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 dollars, and grew moderately by 14.8 

percent when expressed as a percentage of shipment value. 

Table 13.3.3 Commercial Lighting Fixture Industry End-of-Year Inventory 

Year End-of-Year Inventory

thousand current year 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

13.4 INTERVIEW TOPICS AND PRELIMINARY FINDINGS 

The following section summarizes information gathered during interviews held in the 

first half of 2012 for the interim MIA. 
13-7

13.4.1 Market Shares and Industry Consolidation 

New 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 interim MIA interview questions asked manufacturers to share their perspectives 

on industry consolidation both in the absence of new energy conservation standards and 

assuming new standards at various efficiency 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 proposed new energy conservation 

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

solicited information to determine whether new energy conservation standards could result in 

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

Manufacturers were also asked if new energy conservation standards could result in equipment 

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

utility, or other features. 

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

HID lamp industry and how those market shares might change due to the imposition of new 

energy conservation standards. Most manufacturers expected their market share to remain the 

same. However, some raised concerns that the HID lamps market might lose sales to other 

lighting markets due to an increase in the price of HID lamps as a result of the new standards. 

While these manufacturers may lose HID lamp sales, most large HID lamp manufacturers also 

manufacturer the majority of the replacement technologies that would likely be used if 

consumers switched from HID lighting to another lighting technology. 

Industry Consolidation: The HID lamp industry is mainly composed of a few large 

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

interim TSD, four manufacturers hold the majority of the domestic market share of HID lamps. 

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

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

(CFLs). 

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

the HID lamp industry in the absence of standards. They also agreed that new standards most 

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

smaller HID lamp manufacturers could be disproportionately affected by a standard that required 

significant conversion costs. 
13-8

13.4.2 Production and Product Mix 

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

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

capital and equipment conversion outlays needed to upgrade or redesign equipment before they 

have reached the end of their useful life may create significant conversion costs, resulting 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 equipment. 

13.4.2.1 Impact on Product Mix 

Manufacturers believe that new energy conservation standards could affect the product 

mix of HID lamps depending on the efficiency levels selected for the standards. Some 

manufacturers stated they expect mercury vapor lamps to be phased out of production. 

Manufacturers also stated they expect the production of ceramic metal halide lamps to become 

more prevalent. Certain manufacturers commented that if the rulemaking increases efficiency 

levels significantly, they plan on focusing the majority of their R&D effort on other lighting 

technologies such as fluorescent and LED, leading to a decrease in the production of HID 

lighting. 

13.4.2.2 Product Utility 

A few manufacturers expressed concern that new energy conservation standards might 

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

equipment less desirable to consumers. These manufacturers stated that if efficiency standards 

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

ballast, or remove safety features to meet those more stringent standards. 

13.4.3 Conversion Costs 

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

modifying existing equipment. 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 equipment conversion costs. Capital conversion 

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

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

All manufacturers stated that the conversion costs associated with new standards would 

depend on the efficiency level established by those standards. However, several manufacturers 

stated that millions of dollars would be required for testing, accreditation, and laboratory 

expenditures due to new energy conservation standards for HID lamps. Also some manufacturers 

stated that if standards forced all metal halide lamps to go pulse start, the conversion costs would 

be very high and the manufacturers would probably not make a large investment for the domestic 

production of metal halide lamps. Manufacturers reiterated that HID lighting has to be cost 

competitive with other more efficient lighting technologies, such as LEDs, to remain in 

production. 
13-9

13.4.4 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 

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 HID lamps market. 

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

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

regulatory requirements DOE identified. 

Several of the large HID lamp manufacturers also manufacture other lighting products 

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

standards (76 FR 70548) and general service fluorescent lamp and incandescent reflector lamp 

standards (74 FR 34080). Some manufacturers also stated that adapting to the ongoing metal 

halide lamp fixture standard in addition to the HID lamp standard could be very costly to their 

HID lighting production. In addition to DOE regulations, manufacturers spoke of potential 

Federal legislation aimed at eliminating mercury vapor lamps by 2016. Manufacturers also stated 

there are several non-Federal regulations relating to the use of mercury vapor lamps, such the 

EU’s Restriction of Hazardous Substance Directive (RoHS), which went into effect in the EU in 

2006 and have been adopted by a few US states as state regulations. 

13.5 OVERALL KEY ISSUES 

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

key manufacturer issues early in the evaluation of new energy conservation standards. During 

preliminary interviews manufacturers identified four major areas of concern: (1) energy savings 

from replacement HID lamps, (2) testing burden, (3) technology shift, and (4) product 

innovation. 

13.5.1 Energy Savings from Replacement HID Lamps 

Some manufactures expressed doubt that new energy conservation standards for HID 

lamps would realize significant energy savings in the replacement HID lamp market. Because 

HID ballasts and fixtures typically work with only one lamp type and lamp wattage, consumers 

cannot simply replace a failed lamp with a reduced wattage lamp or different kind of HID lamp. 

Instead, some manufacturers argued, consumers would install wattage-equivalent lamps and 

accept high lumen output (given more efficacious lamps). Alternatively, consumers would face 

the high costs of replacing the ballast and/or fixture as well. 
13-10

13.5.2 Testing Burden 

Several manufacturers expressed concern over the testing burden associated with new 

efficiency standards for HID lamps. Manufacturers stated that there are already numerous testing 

requirements for compliance and certification and new HID lamp standards would add another 

standard to test for and meet. This 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’ electricity bill. 

13.5.3 Technology Shift 

Manufacturers reported that regardless of new standards, a technological shift away from 

HID lighting is already occurring. According to manufacturers, LEDs and fluorescent 

technologies are capturing significant market share of new construction in both indoor and 

outdoor applications. Manufacturers are concerned that standards will accelerate this migration 

to alternative technologies due to potential price increases from new energy conservation 

standards for HID lamps. 

13.5.4 Product Innovation 

Manufacturers expressed concern that this HID lamps rulemaking could force resources 

away from the R&D of more efficient lighting products, such as LEDs, in order to spend time 

and money on a product with diminishing market share. Manufacturers would then be forced to 

reallocate resources away from LEDs to make potentially more expensive changes to HID lamps 

that could end up driving consumers into the LED market due to the higher prices of HID 

lighting.