Compact fluorescent lamps in the Philippines : a technical performance and market assessment - final report

94247 i i ;: I· I I (COMPACT FLUORESCENT LAMPS IN THE PHIIJPPINES: r /. 11 ' AJ'.TECHNICAL PERFORMANCE AND MARKET ASSESSMENT I I! !; j, I' I i' :; !' i - FINAL REPORT - I I' ·" i~ Prepared By: i nm ASIA ALTERNATIVE ENERGY UNIT 1: 1· i: nm WORLD BANK r· i' October 1996 ,,  CONTENTS PREFACE ···-·--···-·······-·-·····-···············-·--··················································-···-············-···················· ii EXEC'UTIVE SUMMARY ·········--····························-·····························-······················-······················· iii 1. INTRODUCTION ···--·-··-·-..·--·······-·····-····································--·-········-·········--························l A. BACKGROUND ••••••••••••••••••••••••••••••••••••••••••••••••••••••••.••••••••••••••••••••••••••••.••••••••.••••••••••••••••••.•.••••••••••.•.••••••••••• 1 B. CFL ASSESS~ COMPONENTS ...............................................................................................................2 C. REPORT ORGANIZATION ............................................................................................................................. 3 2. TECHNICAL PERFORMANCE ASSESSMENT .................................................................................4 A. INTRODUCTION ...........................................................................................................................................4 B. CFL TEsTs .................................................................................................................................................5 C. l'ESTED LAMPS ...........................................................................................................................................7 D. TEST REsULTS ............................................................................................................................................9 E. CFL - IL COMPARJSONS ........................................................................................................................... 11 F. DISTRIBtmON SYSTEM 11\.fPACTS .............................................................................................................. 12 G. ASSESS~ OF LAl\.fPS FOR A CFL STRATEGY ....................................................................................... 14 J. M.ARKE:T ASSESSMENT •••••-·-..-•••-••-•••••••••••••S>M..•••••••••••••o••..•••••-H••-•••N•••••••N•••••--••••••••••••-•••••} 7 A. INTRODUCTION ......................................................................................................................................... 17 B. REslDEN11AL SURVEY REsULTS ............................................................................................................... 19 c. COMMERClAl.iINDUSTRIAL SURVEY REsULTS ..........................................................................................25 4. TIIE ECONOMICS AND SAVJNGS POTENTIAL OF CFLS-..-.....- ................-.-........-.............34 A. THE EcoNoMics OF CFLs ........................................................................................................................34 B. ENERGY SAVINGS PoTEN'I1AJ.. ..................................................................................................................35 5. FINDINGS AND RECOMMENDATIONS ..--·-··••e••···················-·························•·o••••••···-···········38  ii PREFACE Tiris report presents the results of a technical performance and market assessment of compact fluorescent lamps (CFLs) in the Philippines, a joint activity of the Department of Energy (DOE) and its Fuels and Appliance Testing Laboratory (FATL), MERALCO and the Asia Alternative Energy Unit (ASTAE). The activity included two components: an assessment of the operating perfonnance and lifetimes of CFLs under poor voltage supply conditions that prevail in the Philippines and an assessment of the current and potential market for these energy-saving products. The CFL technical perfonnance assessment was conducted by the FATL with the assistance of Dr. Gamani Abeywickrama (Consultant). The market assessment was conducted by the Asia Research Organization. Both were carried out between February 1994 and June 1995. The results will be reviewed by the DOE, FATL, MERALCO and other distribution utilities within a collaborative workshop framework to decide on a cost-effective strategy to promote energy efficient lighting in the Philippines. ASTAE will also support this follow-up activity. The activity stems from the findings of a mission that visited the Philippines in September, 1992 to pre-appraise the MERALCO Distribution Efficiency Project which concluded that technical assistance activities· were required before launching a major investment in demand-side management in the Philippines. In addition to the subject· activity, for which MERALCO, the FATL and the DOE made a fonnal request to ASTAE, two demand side management (DSM) workshops have been held, one on DSM regulatory issues for ~e Energy Regulatory Board and another on DSM program planning and implementation for the DOE and the electric utilities that serve the Philippines.  iii EXECUTIVE SUMMARY Background 1. The Philippines and other Asian countries face capacity consttaints in their electricity supply systems. Lighting is a significant component of peak demand, representing an estimated 23% of the system peak demand in the Philippines. Recognizing this, in 1992 the Philippines' Department of Energy (DOE) and MER.ALCO, the country's largest distribution utility, developed plans for an energy- efficient lighting program. The program would have replaced inefficient incandescent lamps with energy-efficient compact fluorescent lamps (CPLs) since CPLs provide the same amount of light as an incandescent lamp but use roughly 70% less electricity. However, anecdotal evidence indicated that CFLs were not lasting as long or delivering the quality of service claimed by manufacturers. The DOE's Fuels and Appliance Testing Laboratory (FATL) tested 20 CPLs and found that some of the CFLs burned out early in the experiment while others quickly overheated. 2. Based on the results of PATL' s very limited testing, concern was expressed that customer dissatisfaction with a CPL program might compromise the effectiveness of demarid-side management programs over the longer term. The DOE, the Energy Regulatory Board (ERB) and MERALCO concluded therefore that CPL technical performance testing and market research should be conducted before proceeding any further. The Government of the Philippines subsequently requested technical and financial assistance from the Asia Alternative Energy Unit (ASTAE) to conduct this Assessment. Project Components CFL Technical Performance Testing 3. FATL conducted a series of tests at their facility to assess the operating performance of a sample of CFLs sold in the Philippines. Under normal operating conditions, a CPL should last for more than 8,000 hours and provide a given amount of light. However, high, low and variable voltage conditions can reduce the operating life and light output of a CF~. The tests were designed to determine the extent to which the Philippines' poor voltage supply conditions would compromise the operating life and performance characteristics of the lamps. 4. More than 350 CFLs from 6 manufacturers and 75 incandescent lamps from 3 manufacturers were tested. The tests covered integral, adapter and wired ballast CFLs (see Section 2.0 for details on the types ofCFLs) and were designed in accordance with International Electrotechnical Commission (IEC) CFL test procedures. They included tests of lifespan (under normal and low voltage conditions), efficiency and light output. In addition, failed lamps were examined to determine the cause of failure.  iv Market Assessment 5. In close consultation with MERALCO, Asia Research Organization, Inc., a local market research firm, conducted focus group discussions and surveys of CFL users and non-users in the residential, commercial and industrial sectors to assess CFL usage patterns, consumer satisfaction and the potential for increasing CFL market penetration among non-users. The market assessment was conducted in MERALCO's service territory and included roughly 1,100 residential households and 300 commercial/industrial establishments. CFL Technical Performance Assessment Results 6. FA'IL tested 13 models of CFLs. Only 5 were judged to be uniformly acceptable for use in a CFL DSM program. Among these 5 acceptable models, only one was an integral ballast model, the most prevalent type of CFL used in the Philippines. Table 1 summarizes the results of the CFL technical performance assessment. Table 1 CFL Technical Performance Assessment Results 1 Lifespan Efficiency Light Output Overall IDUlml Dilll~t LllDl!I 1. Osram Delux EL 11 W 0 0 0 0 2. Philips SL ISW 3. Philips SL l3W • • 0 0 0 0 .~)!; :'.;J 4. National BFG DXIP I6W S. National BFT DXIP I6W • • • • e • ~~ 6. Hitachi CF 20W 7. Toshiba EX 16W • • • • • 0 • • 8. ChiyodaEHF 16W Ad1=c D11l11St l.illll!5 • • • • 9. Chiyoda MA ISW :!t:i~d D1ll11St Lam.gs • 0 • • 10. Osram 7W 0 0 0 0 II. Osram9W 0 0 0 0 12. Sylvania 9W 0 0 0 0 13. GE Biax 9W 0 0 0 0 0 Acceptable • Marginal • Unacceptable See tables 2-3 to 2-S for numerical values.  v Market Assessment Fmdings Residential Sector • Lighting makes up 15-20% ofresidential electricity consumption in MERALCO's service territory. • Less than 8% of residential customers use CFLs and ownership is directly correlated to income level. • Residential CFL users are generally satisfied with the product's performance. • Most residential sector customers (80%) are unfamiliar with CFLs (e.g. don't even know they exist). Among those who are aware of CFLs, many know nothing or have misconceptions about the attributes of CFLs. • The high price of CFLs is a major deterrent to their purchase among middle- and low- income customers. Commercial/Industrial (C/I) Sector • Lighting accounts for 30%-40% of commercial sector electricity consumption and approximately 20% of industrial sector electricity consumption. • Approximately 50% of C/I customers with potential CFL applications are using them. • Seventy-one percent of all C/I customers' are aware of CFLs and 44% of those customers who do not use CFLs are aware of them. • CII CFL users are generally satisfied with the product's performance • Approximately 40% of C/I customers use incandescent lamps but no CFLs. This is the primary market for a CFL strategy in this sector. • After learning of the energy-saving properties of CFLs, 89% of CII customer who do not yet use CFLs stated that price was no longer an obstacle to purchasing them. Energy Savings Potential 7. The economic savings potential of CFLs in the Philippines is estimated at 280 GWh per year and 110 MW of peak demand. Efficiency improvements in regular tube fluorescent lamps and ballasts could save an additional 400 GWh per year and 75 MW of peak demand, for a total lighting savings potential of 680 GWh per year and 185 MW of peak demand. 8. In the C/I sector, replacing virtually all incandescent lamps with well-functioning CFLs is cost-effective. In MERALCO's service territory, the complete replacement of these incandescent lamps with CFLs could net annual savings of over 150 GWh and a 20 MW reduction in peak demand. 9. In the residential sector, replacing over 75% of all incandescent lamps with CFLs is cost-effective. These lamps likely account for 90% of the electricity consumed by incandescents in MERALCO's residential customer base. The complete replacement of these lamps could save as much as 130 GWh per year and reduce peak demand by 90 MW.  vi l 0. Regular tube fluorescent lamps offer additional opportunities for energy savings in the Philippines. A switch from 40 watt to 36 watt tubes and from standard to low-loss ballasts could save up to 400 GWh per year and reduce peak demand by 75 MW in MERALCO' s service territory. Findings and Recommendations 11. Given the potential savings from CFLs, both the prevalence of poor quality integral ballast CFLs and significant voltage fluctuations in the Philippines are serious concerns. (Integral ballast CFLs are the most common type used in the Philippines.) However, the one example of a good quality integral ballast CFL demonstrates the technical feasibility of designing a product that withstands the rigors of the Philippine electrical system. Any CFL promotion strategy should include strict performance criteria for product durability, efficacy and light output (even under poor voltage conditions) in order to guarantee customer satisfaction and energy savings. 12. Voltage fluctuation is significant in the Philippines, exceeding 30 volts within 24 hours in places. These fluctuations affect the performance and reliability of all electrical equipment in the country. Reducing these large voltage fluctuations would result in significant economic savings through improved grid efficiency, end-use efficiency and extended operating life of electrical equipment. A more detailed study of voltage fluctuation throughout the Philippines is recommended to better document the problem and to identify regions where the promotion of efficient technologies, such as CFLs, is feasible from a technical perspective. (CFLs should not be promoted in regions where voltage levels are consistently below the recommended operating range of a CFL or where fluctuations exceed 10% of the rated voltage). 13. The FATL should play a critical role in future energy efficiency strategies in the Philippines as a provider of independent performance testing services. In addition, the FATL may be able to market its services to other Asian nations. The FATL should maintain its capability in the area of testing the energy performance of consumer products and should investigate the market for its services among other Asian nations. 14. Regular tube fluorescent lamps and ballasts offer considerable energy savings potential. A market assessment of redubed wattage fluorescent tubes (36W and 32W) and energy-efficient magnetic and electronic ballasts in the Philippines is recommended. 15. This report contains important information for DSM stakeholders in the Philippines, including CFL manufacturers, DOE and MERALCO. It is recommended that these and other concerned stakeholders meet in a workshop -setting to review the report and decide on next steps, if any.  1. INTRODUCTION A. BACKGROUND 1.1 Lighting is a major end-use of electricity in all Asian countries and a significant component of peak demand. This is the case in the Philippines where lighting makes up an estimated 23% of daily peak demand. Most of this is in the residential sector. Residential lighting makes up an estimated 17% of the system peak demand while commercial and industrial lighting make up an estimated 4% and 2%, respectively. 1.2 Peak electricity demand has been a problem in the Philippines since 1991. During this time, the electricity supply system has been unable to serve peak demand, resulting in brownouts and blackouts in many parts of the country. During March-June 1991, the Metro Manila area suffered brownouts averaging three hours per day while a year later, during March-June 1992, the Luzon grid experienced brownouts averaging seven hours a day. Figure 1-1 shows lvIBRALCO's total and lighting daily load profile and demonstrates how lighting consumption in the evening contributes to the daily system peak. Figure 1-1: MERALCO's Total and Lighting Daily Load Profile: 199.2 I 2.000 I ~ 1.soo I ::E 1_ I c 1.ooo ' ,, I cu : E ! 500 2 4 6 8 10 12 14 16 18 20 22 24 Hour of the Day j-Total -Ughting i 1.3 Considering the large share of the Philippines' peak demand represented by lighting and the significant opportunities to increase its efficiency, the Department of Energy (DOE) and lvIBRALCO, the country's largest distributio~ utility, planned to launch a pilot energy-efficient lighting program in the residential sector. Where undertaken elsewhere (mostly in North America and Europe), large scale efforts to promote CFLs have resulted in significant energy savings. These efforts have focused on replacing inefficient incandescent lamps (IL) with CFLs that consume approximately 70 percent less electricity while providing equivalent levels of light.  2 1.4 However, anecdotal evidence indicated that CFLs in the Philippines were not lasting as long or delivering the quality of service claimed by manufacturers. In 1992, the World Bank's Energy Sector Management Assistance Programme (ESMAP) funded a very limited testing of20 CFLs by the DOE's Fuel and Appliance Testing Laboratory (FATL). Some of the CFLs burned out early in the experiment while others quickly overheated. Low and variable voltage conditions were suspected of being the root cause of these problems. 1.5 . Based on the results of FATL' s limited testing, concern was expressed about the broad dissemination of an imported technology that may be poorly adapted to local grid conditions. There was also concern that customer dissatisfaction with a pilot CFL program could compromise the effectiveness of demand-side management programs over the longer term. The DOE, the Energy Regulatory Board (ERB) and MERALCO concluded therefore that comprehensive CFL performance testing and market research of CFL users and non-users should be conducted before proceeding any further. The Govertunent of the Philippines subsequently requested technical and fmancial assistance from the Asia Alternative Energy Unit (ASTAE) to conduct an assessment of the technical performance of CFLs· in the Philippines and the current and potential market for this energy-saving product. B. CFL AssESSMENT COMPONENTS CFL Technical Performance Testing 1.6 A series of comprehensive tests to assess the technical performance of CFLs under poor voltage supply conditions were designed and implemented by FATL with the assistance of Dr. Gamani Abeywickrama. In order to conduct the CFL tests, FATL acquired appropriate instrumentation, including automatic voltage and current controllers, recording display instrumentation, light output measuring instrumentation and associated peripherals. A sample of CFLs, representative of models currently available in the Philippines, was then tested according to the test design. CFL Market Research 1. 7 The Asia Research Organi7.ation Inc. (ARO), a local market research firm, was contracted to conduct focus group discussions and surveys of residential, commercial and industrial customers in MERALCO's service territory. The discussions and surveys covered CFL users and non-users and assessed customer satisfaction with CFLs and opportunities to promote their further use. ARO carried out data entry and analysis and prepared a report setting out the research findings and implications for the promotion of CFLs.  3 Development of a CFL Strategy 1.8 Based on the results of the FATL tests and the ARO market research, the DOE, MERALCO and FATL will prepare a CFL strategy to increase the market penetration of CFLs in the Philippine~. The strategy will address the necessary technical performance characteristics of CFLs needed for their acceptance in the marketplace, appropriate delivery mechanisms to maximize customer acceptance, any incentives needed to stimulate demand and a marketing strategy to reach relevant market segments. C. REPORT ORGANIZATION 1.9 Chapter 2 presents the results of the CFL technical performance assessment and Chapter 3 those of the market assessment, as well as associated implications for a CFL strategy. Chapter 4 presents information on the economics and energy savings potential of CFLs in the Philippines. Chapter 5 summarizes findings and makes general recommendations for a CFL strategy.  4 2. TECHNICAL PERFORMANCE ASSESSMENT A~ INTRODUCTION 2.1 Compact fluorescent lamps (CFLs) are an energy-efficient alternative to incandescent lamps (ILs). CFLs provide ~quivalent levels of light but consume roughly 70% less electricity. They also last 8 to 10 times longer than ILs. And while CFLs are more expensive than ILs, costing 15 to 30 times as much, they are less expensive on a life-cycle basis due to savings in electricity and equipment costs. 2.2 CFLs use fluorescent lamp technology in a smaller package than that of conventional long-tube fluorescent lamps. They include a fluorescent tube and a ballast to regulate the current flowing into the tube. There are three basic CFL configurations, as follows: • IntearaJ ballast CFLs: This type of CFL makes up the bulk of CFLs used in the Philippines. The tube and ballast are in one sealed unit with an Edison Screw cap. Integral ballast CFLs can fit directly into a standard incandescent lamp socket and are well suited for residential, commercial and industrial applications. • Adapter ballast CFLs: The tube and ballast are separate units. The ballast is a sealed unit with an Edison Screw cap that can fit directly into a standard . incandescent lamp socket. The modular tube has a plug-in base that fits into the adapter ballast. The ballast and tube can be purchased separately, and a well- designed adapter ballast should outlast many modular tubes. • Wired ballast CFLs: The tube and ballast are separate units. The tube fits directly into the lighting fixture, which must have an appropriate plug-in fitting. The ballast is wired directly into the lighting fixture, like a nonnal tube .fluorescent lamp. ··well-designed wired CFL ballasts should outlast many modular tubes. 2.3 As previously indicated, the concern iii the Philippines was that the projected lifetime and performance advantages of the CFL were not being realized in practice. It was hypothesized at the start of the tests that variable, and in particular low, supply voltage in the electricity supply system was causing the problems with CFLs. Figures 2- 1 and 2-2 illustrate some of the voltage fluctuations that occur in the Philippines. Tests were conducted to systematically document the actual technical performance of CFLs under poor voltage supply conditions.  5 Figure 2-1: Voltage Readings in Quezon City· Nov. 6-8, 1994 240 g, 230 J!l ~ 220 210 0 6 12 18 24 6 12 18 24 6 12 18 24 Hour of the day Figure 2·2: Voltage Readings in Baguio City- Oct. 29""30, 1994 250 240 & 230 J!l 0 220 > 210 200 4 8 12 16 20 24 4 Hour of the day B. CFLTESTS 2.4 The objectives of the CFL tests were to: 1. establish the operating life of a sample of CFLs under Philippine grid conditions; 2. measure lamp technical performance (energy efficiency and light output overtime); 3. determine the cause of lamp failure; and 4. compare the technical performance of the tested CFLs to incandescent lamps.  6 2.5 To meet the above objectives, the following tests were conducted: 1. life-testing ofCFLs at two power supply voltages (230 and 207 volts) and systematic on/off switching cycles; 2. measurement of CFL electricity consumption, light output, and power factor at specified time intervals; and 3. analysis of failed lamps to determine the cause of failure. 2.6 Similar technical performance tests were carried out on a sample of incandescent lamps to provide data for the direct comparison of CFLs and !Ls. 2.7 A total of354 CFLs from 6 manufacturers were tested, including 8 integral ballast, 1 adapter ballast and 4 wired ballast models. Seventy-five (75) incandescent lamps (IL) from 3 manufacturers were also tested. 2.8 The CFL test methodology and procedures were designed to approximate the operating conditions of the electricity supply system in the Philippines. Anecdotal evidence suggests that these conditions are typical of most developing countries. It is expected, therefore, that these test results will be relevant for CFL strategies throughout Asia. Life-Testing 2.9 Life-testing was used to measure the operating life of the lamps available in the Philippines. To simulate nonnal operating conditions, the lamps were operated on the switching cycle specified by the Standards of the International Electromechanical Commission (IEC) for life-testing fluorescent lamps. This is a switching cycle of two hours and 45 minutes on and 15 minutes off. The operating life estimates are based on the median hours of operation of the tested lamps before failure. 2 For each CFL in the sample, 20 or more lamps were life-tested. 2.10 From each sample of lamps, a minimum of 10 lamps were tested at each of the two test voltages (230V and 207V). Since 230 volts is MERALCO's stated system voltage, the 230 volt lifetest should provide baseline CFL life expectancies, assuming optimal system operating conditions. The tests at 207 volts (10% below nominal voltage) were designed to assess the tolerance of the test lamps to the low voltage conditions found in the Philippines. Ten percent below nominal voltage was selected because it represents a significant reduction from MERALCO's stated nominal supply voltage and is considered a lower boundary for proper operation of well-designed CFLs.3 While this constant voltage level does not mimic the fluctuations found in the Philippines, it is 2 Lamp manufacrurers base their lamp life claims on .the number of hours of operation till SOOA> of a large sample of lamps have failed. By applying the Weibull Method of statistical estimation. this study predicts a median lamp life for each type of lamp and provides 95% confidence limits for that estimate. 3 Philips Lighting technical information document number 3222 632 0185 l indicates that the minimum supply voltage required for the lamp to ignite is 207 volts (AC voltage). The minimum supply voltage required for the lamp to function after ignition is 170 volts (AC voltage) for the 13W and 18W lamps.  7 believed to be an appropriate parameter for the CFL tests because it is the voltage level, rather than voltage fluctuations, that most affects the performance of the lamp. Light Output and Electrical Characteristics 2.11 Measurements of electricity consumption and light output were taken at selected time intervals to determine lamp performance. Light output was measured in lumens, while electrical measurements were taken for voltage supplied to the lamp, current into the lamp, power required by the lamp and power factor. Efficacy, which is a measure of how efficient the lamp is in providing light, was calculated by taking the ratio of light output (lumens) to power requirement (watts). Tablel-1 Time Intervals for Measurements of Lamp Performance (hours of operation) Compact Fluorescent Lamps Incandescent Lamps 100 0 500 100 2,000 500 5,000 1,000 8,000 Lamp Failure Analysis 2.12 CFLs that failed prior to 5,000 hours of operation were cut open and examined to determine the cause of failure (e.g. which component failed and why). C. TESTED LAMPS 2.13 After considering the market information gathered during visits to retail shops and discussions with Philips Lighting and GE Lighting in the Philippines, brands and models ofCFLs and ILs were selected for testing. A total of354 CFLs and 75 ILs were tested, as listed in Table 2-2.  8 Table2-2 Tested Lamps Integral Ballast CFLs Adapter and Wired Ballast CFLs 1 Incandescent Lamps Philips SL13 Prismatic (13W) Osram Delux (7W) Philips(25W) Philips SL 18 Prismatic (l SW) Osram Delux (9W) Philips (SOW) National Prismatic BFT ( l 6W) Sylvania Lynx (9W) GE(25W) National Globe BFG (l 6W) GEBiax(9W) GE(50W) Osram Delux EL (11 W) Chiyoda MA 15 (I SW) Starlight (25W) Chiyoda Lamp Capsule FI6 (l6W) Toshiba Neoball Opal (16W) HitachiCF20E(20W) 1. The Chiyoda lamp was the only adapter ballast CFL tested. The rest were wired ballast lamps. 2.14 Eight models of integral ballast CFLs made by 6 manufacturers were tested. Philips is the leading supplier of these lamps, controlling approximately 70% of the market. National is the second leading brand of integral ballast CFLs with I 0% to 15% of the market. The following is selected information on the integral ballast lamps and their manufacturers. • Philips is based in the Netherlands. Components for the Philips CFLs come primarily from Europe and are assembled in the Philippines. Philips sells integral ballast CFLs in a variety of wattages, including 9W, 13W, 18W and 25W, all of which use magnetic ballasts. Only the 13W and l 8W lamps were tested, but it is expected that these test results represent the performance of Philips CFLs in general. • National is a Japanese corporation with two 16W CFL models available in the Philippines. Both models use magnetic ballasts and, except for cosmetic differences, are identical in design. • Osram is a German corporation, and offers a range of integral ballast CFLs with electronic ballasts in the Philippines: 7W, 11 W, 15W, 20W, and 23W. The 11 W CFL was tested. • Chiyoda is believed to be based in Japan but sells lamps with Chinese components. • Toshiba is a :Japanese brand, selling only the tested 16W magnetic ballast Neoball lamp in the Philippines. • Hitachi is also a Japanese brand, selling only the tested 20W magnetic ballast lamp in.the Philippines. 2.15 Osram, Sylvania and GE supply the majority of modular tube lamps in the Philippines. Each offers modular tubes in a variety of wattages from SW to over 20W. As previously indicated, these lamps must be connected to a wired or adapter style ballast. In the FATL tests, all of the lamps were operated with wired ballasts except for  9 the Chiyoda MA I SW which is an adapter ballast lamp .with an electronic ballast. The packaging indicates that the lamps are made in Japan. · D. TEST RESULTS Integral Ballast Lamps 2.16 Table 2-3 below compares the integral ballast lamps on the basis of their lifespan, efficiency and light output. Table2-3 Integral Ballast Test Results Brand Wattage Lifespan• Lifespan• Luminous Efficacy Lumen Maintenance 230 Volts 207 Volts 100 hours 5,000 hours (hours) (hours) (lm/W) (%) Osram 11 8000+ 8,000+ 52 76% Philips · 18 800o+ 4,298** 44 83% Philips 13 800o+ 825** 47 84% Hitachi 20 800o+ 216 34 58% National BFG 16 7,645 8,00o+ 33 69% National BFT 16 5,965 5,297 32 66% Toshiba 16 3,429 1,653 36 74% Chiyoda 16 1,894 1,907 27 47% • - Median lifespan of sample. •• - Philips has announced plans to introduce modified CFLs that can operate over a wider range of supply voltages. • . Osram - The Osram Delux. EL 11 W had the best overall performance, with a long · operating life (800o+ homs) at both test voltages and high efficiency and light output. • Philips - The 18W and 13W Philips integral ballast CFLs were among the best in terms of efficiency and lighting quality. However, early failures under low voltage test conditions (particularly by the 13W model) make them unacceptable for use in regions with significant (+/-10%) voltage fluctuations. (Given that Philips has announced plans to introduce modified CFLs that can operate over a ' wider range of supply voltages, this conclusion may change in the future.) • National - The National l 6W integral ballast CFLs performed second to Osram in terms of operating life at low voltage. However, overall lamp performance was poor. • Chiyoda. Hitachi and Toshiba-The overall performance. of these CFLs was unacceptable, due to short operating lives at nominal voltage (<4000 hours), low relative efficiency and/or low light output.  10 Failure Analysis 2.17 All of the CFLs that failed prior to 5,000 hours of operation were examined to determine the cause of failure. The Osram was the only integral ballast lamp with no failures. Below is a summary of the failure analysis results: • Philips: None of the Philips lamps failed before 5,000 hours at 230V. However, some failed at 207V. The analysis found that all failures were due to the cathode being de-activated and disintegrating as a result of running at low voltage. • National: All failures as of 5,000 hours involved the BFT model at 207V. Two causes of failure were identified. Most had failed due to exhaustion of the emitter material on the lamp cathodes. One failure was due to a burned glow starter switch. This could be a potential fire hazard. • Chiyoda: All but one ofthe Chiyoda lamps failed before 5,000 hours. The analysis found that failures were due to the exhaustion of the emitter material on the lamp cathodes. The electronic ballast had also failed on all of the test lamps. • Hitachi: All failures occurred at 207V and before 500 hours of operation. These failures were likely caused by the cathode being ''poisoned" due to the lamps' attempting to light at low voltage. Adapter Ballast Lamps 2.18 The Chiyoda MA was the only adapter ballast lamp tested. Table 2-4 presents its test results. Table 2-4 Chiyoda Adapter Ballast Lamp Test Results Brand Wattage Lifespan Lifespan Luminous Efficacy Lumen Maintenance 230 Volts 207 Volts 100 hours 5,000 hours (hours) (hours) (lm/W) (%) ChiyodaMA 15 3,443 2,296 49 68% 2.19 The Chiyoda MA was among the most efficient CFLs in providing light with a luminous efficacy comparable to the Philips and Osram integral ballast lamps. However, it performed poorly in the lifetests, lasting far less than the expected 8,000 hours. The failure analysis found that the tube was the cause of failures in all cases. Wired Ballast Lamps 2.20 The following table contains the results of the wired ballast CFL tests.  11 Table2-S Wired Ballast Lamp Test Results Brand Wattage Lifespan Lifespan Luminous Efficacy Lumen Maintenance 230 Volts 207 Volts 100 hours S,000 hours (hours) (hours) (lm/W) (%) Osram 7 8000+ 800o+ SS 87% Osram 9 8000+ 800o+ 61 88% Sylvania 9 8000+ 8ooo+ 61 84% GEBiax 9 8000+ 8000+ S8 79% 2.21 All of the wired ballast lamps performed well by all three measures. None of the lamps failed before 5,000 hours.· . Incandescent Lamps 2.22 The table below contains the results of the incandescent lamp tests. The incandescent lamps were tested only at 230V, as IL performance at voltages above and below their rated voltage is well understood. Table 2-6 Incandescent Lamp Test Results Brand/type Wattage Lifespan Luminous Efficacy Lumen Maintenance 230 Volts 0 hours 500 hours (hours) (lm/W) (%) Philips 25 911 8.6 88% Philips so 589 11.6 93% Starlight 2S 710 7.0 88% GE 2S 433 8.9 87% GE so S62 11.5 93% 2.23 Incandescent lamps are expected to last 1,000 hours at their rated voltage. However, none of the tested lamps had median lifespans that reached this target. These data indicate that the incandescent lamps being sold in the Philippines are either of poor quality or designed for a lower operating voltage. For example, the operating lives of the tested lamps would likely increase to 1,000 hours if they were operated at 220V instead of230V. 2.24 The efficacies of the tested incandescent lamps are within the expected range for these products. E. CFL - IL COMPARISONS 2.25 Table 2-7 estimates the energy savings from CFLs by matching them with incandescent lamps on an equivalent lumens basis. For example, the Osram 11 watt lamp  12 provides between 600 and 450 lumens throughout its operating life, roughly the same as a 50 watt IL. (The CFL's light output drops from approximately 600 to 450 lumens between 100 hours and 5,000 hours of operation). Table2-7 Lamp Efficiency Comparisons CFL Equivalent IL Energy Savings Int~mJ .61111~ Lam12s Osram llW sow 70%-78% Philips 13W sow 72%-76% Philips 18W 60-7SW 70%-74% Toshiba 16W sow S6%-68% Hitachi20W 50-60W 43%-66% National BFG 16W 2S-40W 48%-64% National BFT 16W 2S-40W 44%-64% Chiyoda 16W 25W 16%-S8% AdDPter BDllilllt LWDJ2S Chiyoda MAlSW 60-95W 71%-77% Wired Ball~ Lmuis Osram9W sow 66%- 700.4 Sylvania 9W sow 65%- 700.4 GEBiax9W sow S8%-68% Osram 7W 40W SS%-62% 2.26 · The figures in the table indicate that CFLs are significantly more efficient providers of light than incandescent lamps, with the Osram and Philips integral ballast lamps and the Chiyoda MA 15 adapter ballast lamps being the most efficient. They also indicate that a CFL strategy which uses only the best performing lamps, such as the Osram integral ballast lamp, could achieve energy savings of at least 70%. F. DISTRIBUTION SYSTEM IMPACTS 2.27 An additional consideration when measuring the performance of CFLs is their effect on the electricity supply system. Since CFLs have lower power factors than incandescents, replacing ILs with CFLs will produce different quantities of energy savings at the customer's premises and at the electricity generati~n plant. For instance, the 11 W Osram integral ballast CFL reduces electricity demand by 78% at the customer's premises [(SOW-11 W)/SOW=0.78]. However, because the CFL has a power factor of 0.52, compared to the IL' s power factor of 1, the CFL requires 21 VA· of power capacity  13 [11 W/0.52=21 VA] and therefore saves only 57% at the electricity generating plant [(50VA-21 VA)/50VA=0.57]. 4 2.28 In addition, CFLs reduce distribution losses by reducmg the load on the electrical system. These losses are proportional to the square of the current in amps. Assuming that the voltage remains constant, one can also say that the losses are proportional to the square of the volt-amps [(VA)2]. For example, replacing a SOW IL with the 11 W Osram 2 CFL will reduce distribution losses by 82% [(50VA2-21VA2)/50VA =0.82]. Table 2-8 lists the power factor of each tested CFL and the capacity savings and distribution loss reductions associated with substituting each for an equivalent IL. Table2-8 · CFL Power Factors and Associated Capacity Savings and Distribution Loss Reductions CFL Power Factor Capacity Savings Distribution Loss Reduction Inteml Ballam Lm12:1 Osram llW 0.52 58% 82% Philips 13W 0.52 50% 75% Philips 18W 0.54 51% 76% Toshiba 16W 0.46 30% 52% Hitachi20W 0.48 24% 43% Chiyoda 16W 0.54 (19%) (41%) National BFT 16W 0.43 "1% 14% National BFG 16W 0.41 2% 5% Adil$[ BDllml Lamp:i . Chiyoda MA 15W 0.58 5'71'/o 82% Mmd Ballast Lmp,s~ Osram7W 0.35 36% 59% Osram9W 0.40 45% 70% Sylvania 9W 0.40 45% 70% GEBiax9W 0.40 45% 70% 2.29 With one exception, all of the CFLs would produce capacity savings and reduce distribution losses if substituted for an equivalent IL. The exception, the Chiyoda I 6W integral ballast CFL, would increase capacity requirements and distribution losses because its low light output would warrant its substitution for only a 2SW IL. The CFLs with the highest energy savings and PFs (the Osram and Philips integral ballast lamps and the Chiyoda MAIS) provide the. greatest capacity savings and distribution loss reductions. 4 Distribution losses arc ignored here for the sake of simplicity. ~ng a 2W ballast  14 2.30 All of the CFLs tested would be considered normal power factor CFLs. The installation of high power factor CFLs (PF> 0.9), or addmg power factor correction capacitors to lighting circuitry, would increase capacity savings and distribution loss reductions. 6 G. AsSESSMENT OF LAMPS FOR A CFL STRATEGY 2.31 ·This section uses the above test results to assess the suitability of each lamp for a CFL strategy in the Philippines. The following criteria were employed for this assessment Lifespan: Acceptable: Lamps that lasted more than 8,000 hours in the life-tests at both 230 volts and 207 volts. Mar&inal: Lamps that lasted more· than 8,000 hours at 230 volts but less than 8,000 hours at 207 volts. A short life at 207 volts indicates that the lamp is susceptible to early failure under the voltage conditions found in the Philippines. These lamps should only be considered for applications where supply voltage is maintained at or near the rated voltage of the lamp. Unacceptable: Lamps that failed at both voltage levels prior to 8,000 hours of operation. Ejjiciency (integral and adapter ballast lamps): Acceptable: Lamps with efficacies greater than 40 lumens per watt (lm/W). Marainal: Lamps with efficacies between 30 and 40 lm/W. Unacce,ptable: Lamps with efficacies less than 30 lm/W. Efficiency (wired ballast lamps): Acceptable: Lamps with efficacies exceeding 55 lm/W for 7W and 60 lm/W for 9 watt CFLs. All tested lamps met this criteria. Light Output: Acce.ptable: Lamps with lumen maintenance exceeding 70% through 5,000 hours of operation. Maminal: Lamps with lumen maintenance between 60% and 700/o through 5,000 hours of operation. 6 The power factors of the magnetic--ballasted lamps, all except the Osram and Chiyoda lamps, can be corrected to 1.0 using compensating capacitors.  15 Unaccel)table: Lamps with lumen maintenance less than 60% through 5,000 hours of operation. 2.32 Table 2-9 presents summary results of the assessment. Overall ratings are based on each lamp's worst perfonnance in any category. Table2-9 CFL Performance Assessment Results Brand Lifespan Efficiency Light Output Overall lntGml Billlm LllmPli Osram Delux EL 11 W 0 0 0 0 Philips SL l BW • 0 0 t'i> Philips SL 13W • 0 0 ~ •:.>~. National BFG DXIP l 6W e • • :fl~~ National BFT DXIP l 6W e • iii Hitachi CF 20W • • • • Toshiba EX 16W • • 0 • Chiyoda EHF 16W • • • • AdDPtm: Ballm LllDlPli Chiyoda MA ISW • 0 • • Will!d Ballas Lamps Osram 7W 0 0 0 0 Osram9W 0 0 0 0 Sylvania9W 0 0 0 0 GEBiax9W 0 0 0 0 0 Acceptable 8 Marginal • Unacceptable 2.33 The Osram Delux EL 11 W is the best integral ballast CFL for use under the voltage conditions in the Philippines. Early failures by the Philips CFLs under low voltage conditions (particularly the 13W model) make them acceptable for use only in regions with minimal voltage fluctuations (+/-5%). The National 16W integral ballast CFLs demonstrated marginal performance. The overall performance of the Chiyoda, Hitachi and Toshiba CFLs was unacceptable 2.34 Safety concerns were identified with the Chiyoda EHF l 6W and Hitachi CF 20W lamps. These lamps should be excluded from consideration for a lighting efficiency program unless, or until, they have been proven to meet the safety standards set by the Philippines BPS.  16 2.35 The Chiyoda MA15 adapter ballast lamp had an unacceptably short operating life at both test voltages. The wired ballast CFLs performed well and represent efficient alternatives to incandescent lighting. However, their low power factor is a potential concern and power factor correction is recommended for all facilities using these CFLs.  17 3. MARKET ASSESSMENT A. INTRODUCTION 3.1 The market assessment activities of this study included focus group discussions and customer surveys of CFL users and non-users in the residential and commercial/industrial (C/I) sectors ofMERA,LCO's service territory. Broadly, the goal of the market assessment was to provide an understanding of customer experience with CFLs so as to inform a CFL strategy. The specific objectives of the market assessment were to: • assess current levels of use and satisfaction with CFLs among a sample residential and C/I customers; • determine likely acceptance factors and barriers to purchase among residential and C/I customers who have yet to purchase CFLs. 3.2 A two-part research program was carried out, including focus group discussions to assess customer attitudes and perceptions vis-a-vis CFLs and a survey to determine CFL awareness and usage. • Focus Qroup Discussions: Six focus group discussions were held with CFL users and non-users, divided into residential, small/medium-sized C/I and large C/I customers; and • Survey: Two surveys were conducted, one in the residential sector and one in the C/I sector, with samples drawn from MERALCO's customer base. For the residential survey, multi-stage probability sampling was carried out in \ MERALCO's service territory as far north as Bulacan and as far south as Quezon province. One thousand households proportionately distributed in the MERALCO service territory were selected. For the commercial/industrial survey, the 300 customer sample was systematically drawn from . MERALCO's commercial sector customer base. 7 (See Box I for survey elements) 3.3 Additional information was gathered through discussions with lighting equipment manufacturers in the Philippines and visits to retail outlets to determine which CFLs were available in the market, their cost and market acceptance. 7 The sample for the residential survey was drawn using multi-stage probability sampling. An additional 80 CFL using households were selected to augment the 85 identified from the probability sampling and increase the CFL-user sample size. The sample for the commercial survey was drawn using a combination of area probability and systematic (skip interval) sampling from the telephone dircctoty.  18 Box 1: Survey Elements Among a representative cross section ofMERALCO's residential and commercial customers: a) monthly kilowatt hour consumption; b) number of light bulbs being used and the corresponding total kilowatt hours; c) awareness of CFLs; d) incidence of CFL use and number of CFLs; e) socioeconomic characteristics of the sample customers Among residential and commercial sector customers who have purchased CFLs: a) Level of awareness of CFLs/CFL brands; b) Perceptions of CFLs and origins of those perceptions; c) Factors affecting/triggering CFL purchase; d) When purchased and in what quantity; e) Brand choice and brand differentiation; f) Product satisfaction/problems with CFLs in general and the purchased brand in panicular; g) Comparison ofCFLs with current lighting systems (fluorescent/incandescent); h) Barriers to continued/repeat CFL use; i) Incidence of repeat/multiple use and reasons; j) Use patterns and placement in commercial areas; k) Decision making process in commercial sector CFL purchase; I) Consumer preferences vis-a-vis lighting systems; m) Lighting costs as share of total operating costs in the commercial sector; n) Surveyed facilities size and use characteristics Among residential and commercial sector customers who have not purchased CFLs: a) CFL awareness; b) CFL attitudes/perceptions; c) Source(s) of perceptions; d) Comparison with current lighting systems; e) Barriers/constraints to usage; f) Consumer preferences and lighting requirements; g) Socioeconomic characteristics of sampled customers; and h) Surveyed facilities size and use characteristics  19 B. RESIDENTIAL SURVEY RESULTS Major findings • Lighting makes up 15% to 20% of residential electricity consumption in MERALCO' s service territory. • Incandescent and fluorescent lamps account for approximately 30% and 70% (respectively) of the energy used for lighting. • Less than 8% of residential customers use CFLs, and ownership is highly correlated to income level. • Almost all CFLs in this sector are integral ballast lamps. • CFL users are satisfied with the product's performance. • Most consumers (98%) have not yet experienced CFL failures (due to relatively recent purchase - less than 2 years compared to expected CFL life of 4+ years). • Most residential sector customers (800/o) are unfamiliar with CFLs (e.g. don't even know they exist). Among those who are aware of CFLs, many know nothing or have misperceptions about CFLs' operation and attributes. • The high price of CFLs is a major deterrent to their purchase among middle- and low- income customers, Residential Sector Profile 3 .5 MERALCO serves approximately 2.1 million residential households, of which the majority (58%) are in Metro Manila. The rest are in Bulacan (12%), a province north of Metro Manila, and in the provinces east and south of Metro Manila (e.g. Cavite, Laguna, Batangas, Rizal, and Quezon). See Figure 3-1. 3.6 Incomes among MERALCO's residential customers range from less than 5,000 pesos per month to more than 50,000 pesos per month. The majority (69%) have incomes ofless than 10,000 pesos per month. Figure 3-2 breaks up residential customer into upper, middle and lower income levels. Figure 3-1: Location of Figure 3-2: Income Level of Surveyed MERALCO Residential Customers Customers Other  20 Electricity Consumption 3. 7 Monthly electric bills for the customers surveyed range from less than I 00 pesos to over 4,000 pesos, with the majority (80%) paying less than 1,000 pesos per month. · Average consumption is 220 kWh per month. Consumption for the 90% of customers using less than 400 kWh per month averaged 180 kWh per month. Lighting Technology 3.8 Tube fluorescent, incandescent and compact-fluorescent lamps (in that order) are the most prevalent among MERALCO's residential customers. The figures below show household lighting equipment choices according to selection of technologies, number of lamps by technology found in households, and lighting energy consumption.11 Figure 3-3: % of Households Using Lighting Technologies 100% .,.---r--r------==------ 80% 60% 40% 20'Y1 O'A. Upper Mid die Lower Income Level •CFL •Incandescent OFluorescent I Figure 3-4: Number of Lamps Per Household Upper Middle · Lower Income Level •CFL 81ncandescent OFluorescent 8 Number of lamps and energy consumption estimates are weighted according to the percentage of households using each type of technology.  21 Figure 3-5: Monthly Lighting Energy Consumption Per Household Upper Middle Lower Income Level •CFL •Incandescent o Fluorescent 3.9 Fluorescent and incandescent lamps make up the vast majority of the residential lighting load, sharing an estimated 70% and 30% of the total, respectively. CFLs are found in very few households (8%) and CFL ownership is highly correlated to income level. Only 3% of all lamps identified were CFLs. 3.10 A number of common themes emerged from the surveys and focus groups: • Customers are generally satisfied with their lighting equipment. • Customers are relatively more satisfied with their fluorescent lamps and CFLs (96% of users have no complaints) than with their incandescent lamps (77% have no complaints). · • Economy/energy efficiency is seen as the main benefit of fluorescent lamps and CFLs, cited by 50% of users, while their brightness is a secondary benefit. • No clear common reason for using incandescent lamps as opposed to other technologies emerged from the survey. Cited reasons included the suitability of the lamp to a particular room or fixture, the low cost of the lamps and the ease of installation. • The primary complaint against incandescent lamps was that they are uneconomical due to their ~gh energy consumption. Other commonly cited complaints were that they were not bright enough or were not durable. 3 .11 These findings suggest that customers are sensitive to the energy efficiency of the lighting equipment they purchase. The fmdings also suggest that incandescent lamp users might be open to replacing their incandescent lamps with more efficient CFLs or fluorescent lamps. CFL User Assessment 3.12 As Figure 3-3 above indicates, CFL users are predominantly middle and upper incom!= customers. Approximately 30 percent of upper income customers are currently  22 using the technology, compared to 9 percent of middle income and virtually none of lower income households. 3 .13 CFLs are most likely to be used in the bedroom or living room, followed by the dining room, porch and kitchen. This, combined with the fact that 75 percent of CFLs operate for more than one hour a day, indicates that customers have installed CFLs predominantly in high use locations. 3 .14 Integral ballast CFLs are by far the most popular type. Only three of the 165 surveyed customers were using adapter ballast lamps. Philips is by far the most popular CFL, with approximately 70 percent of the residential market. National holds an estimated 15 percent of the residential market. See Figure 3-6. Figure 3-6: Brand Market Figure 3-7: Reasons for Share Brand Selection 35"k 30% 25% 20% Philips 15% 71% 10% 5% Other 0% 14% 80nly Brand Avail. •Brand Loyalty/Famlliarlty 0 Perceived Brand Attributes OOther 8NoReason Figure 3-8: Reasons for Purchasing a CFL Better Light 30'k  23 3 .15 Availability and brand reputation were the primary reasons for the selection of a particular lamp. Many surveyed customers noted that the brand they purchased was the only one available when or where they made their purchase. Philips and National were also cited as being "cheaper". Lower energy consumption was the primary reason for purchasing CFLs. However, the high price of a CFL was cited as a deterrent to purchase even among 25% of users. 3.16 Fifty-five percent ofCFL purchases took place in a hardware store, 16% in a supermarket and l 0% in a department store. Interestingly, 5 percent of CFLs were purchased abroad and 6 percent were given as a gift. Most of the CFL users surveyed purchased one (46%) or two (22%) CFLs at one time, although some purchased as many as eight. Overall, the average purchase quantity was 2, and this matches the average number found in a house. Satisfaction with CFL.s 3 .17 As Figure 3-9 shows, CFL users are generally satisfied with the CFLs they are using. The lamps received very good ratings (greater than 4.0 average ratings on a five- point satisfaction scale) for all the product attributes investigated. Figure 3-9: CFL-user Satisfaction Ratings .; ·.. :,- ~ ' '•;:, Illumination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .[ ..~-,,=·~ . ~:z.,.ii!·"'' Installation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .m;; . Consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .llli·i·~~~~,,=·:=::J + Lifespan . . . . . . . . . . . . . . . . . . . . . . . . . . . . .iil!i!!Bii!~E::==l + Value •••••••••••••••••••EEE~,.,::z,,,;::,==t Very Satisfied Satisfied Not Satisfiedl Don'tKnowl can't Say 3.18 Fewer than 5percent of customers expressed dissatisfaction with the performance of their CFLs. The most common sources of dissatisfaction were the lamps' dimness and expense. 3.19 Approximately 94 percent of customers stated that they will likely, if not definitely, purchase CFLs again. Only nine of the 165 CFL-users surveyed stated an intention not to purchase CFLs again, either because the price is too high or because of dissatisfaction with performance.  24 Problems Encountered with CFLs 3.20 Seven surveyed CFL users (4%) reported problems with their lamps. Reasons for dissatisfaction were that the lamp did not last as long as claimed (three reporting), that it was slow to light up (two reporting), that it didn't light up when voltage was low and that it broke easily during power fluctuations. All four of the reported failures were integral ballast lamps (not surprising, as virtually all CFLs in the residential sector are of this type). Three were manufactured by Philips and one by Hitachi. Given the low failure rate, no conclusions regarding cause of failure could be drawn from the survey data. CFL Non-User Assessment CFL Awareness and Knowledge.of Product Attributes 3.21 Eighty percent ofCFL non-users are unaware of the product (e.g. don't even know the product exists). Of the remaining 20%, half have some knowledge of the product and the other half have no knowledge or incorrect perceptions of the product. Only a small percentage of non-users became aware of CFLs through advertisement or promotion, suggesting the potential for gains from a CFL advertising campaign. See Figures 3-10 and 3-11.9 Figure 3-10: CFL Awareness Figure 3-11: Sources of CFL Among Non-users Awareness Seen in Store Not Aware 14% 80% 10% Knowledgeable Seen In use 41% Advertisement --...i 4% Have Incorrect Perceptions Promotion 16% No Knowledge/ No Perceptions Told by Somebody 2!Wo 9 Figure 3-10 is based on the aided awareness of915 surveyed non-users ofCFLs. Customers who were aware of the product were asked a series of questions about CFL prices, energy consumption. and life expectancy to assess their knowledge of the product's attributes.  25 3.22 Among "knowledgeable" non-users, the main reason for not using CFLs is that the price is too high (52%). Twenty percent of"knowledgeable" non-users have no incandescent fixtures in their households and, therefore, no ready application for CFLs. Selling Points :• 3.23 By all measmes, energy efficiency is the product attribute that has the most appeal to customers. CFL-users cited efficiency as the main re~on for purchase. Eighty-one percent of non-users cited efficiency as the most appealing attribute of CFLs when shown CFL advertisements from Philips and GE. Also, when asked to rate the importance of various product attributes in the purchase decision, efficiency was cited as being very important by over 60% of customers, reliability by 55%, price by 35% and aesthetics by 26%. 3.24 While sale price is clearly an obstacle to CFL purchase, the survey data indicate that increased knowledge of the product's attributes can significantly reduce this barrier. After seeing the print advertisements for CFLs, only 13% of non-users stated that the high price of the lamps would prevent them from purchasing CFLs. This likely understates the effect cost would have on purchase, even assuming an effective education campaign. However, it does indicate that customers are willing to invest in CFLs once they are aware of their economic benefits. 3 .25 · When asked to rank entities that could most influence their decision to purchase a CFL, .MERALCO was listed as the most influential C. COMMERCIAL/INDUSTRIAL SURVEY RESULTS Major Findings • Lighting accounts for 30% to 400/o of commercial sector electricity consumption and approximately 20% of industrial sector electricity consumption. • Incandescent and fluorescent lamps account for approximately 100/o and 80%, respectively, of lighting energy consumption. • 71 % of all C/I customers are aware of CFLs. 44% of non-users are aware of them. • Approximately 500/o of CII customers with potential CFL applications are already using them. • 79% use integral ballast lamps only, 14% use separate ballast lamps only, and 7% use both types. . • CFL users are generally satisfied with the product's performance. • 15% of C/I CFL users have had problems with the lamps, including 7% that experienced early lamp failmes. • Approximately 40% of C/I customers have incandescent lamps but no CFLs. This is the primary market for a CFL strategy in these sectors.  26 • After learning of the energy-saving properties of CFLs, 89% of non-users stated that price was no longer an obstacle to purchasing them. en Sector Profile 3.27 The majority (66%) ofMERALCO's C/I customers are in Metro Manila; the rest are in adjacent provinces. Firms in the service industry account for 38 percent of MERALCO's C/I customers, followed by sales and marketing (32%) and manufacturing (23%). The remaining 7 percent are in construction, transportation, and other industries (see Figure 3-12). Of those that provided a monthly electricity consumption estimate, approximately one-third use less than 500 kWh per month, another third between 500 and 5,000 kWh, and a final third over 5,000 kWh (see Figure 3-13). Figure 3-12: Types of Figure 3-13: Monthly Energy Busineaes Surveyed Consumption Sales/ Manufacturing 500to5000 Marketing kWh <SOOkWh Other 3 .28 The most important factor considered in decisions regarding furnishing and fixture replacements is durability/quality, followed by price/cost. When considering the purchase of energy-using equipment, energy efficiency and reliability were the most important criteria while other considerations such as price and aesthetics were considered less important. en Sector Lighting 3.29 Surveyed CII establishments were asked to estimate the percentage of total electricity used by lighting and the number of light bulbs in their facility (see Figures 3- 14 and 3-15).  27 Figure 3-14: Lighting Share of Figure 3-15: Number of Light Total Electricity ·Consumption Bulbs per Building 50% 40% 30% 20% 10% 0% <500 500.S,OOO >5,000 Monthly Consumption (kWh) 3.30 Not all survey respondents provided estimates for the lighting share of electricity consumption. However, among those who did, the average estimate for lighting energy consumption was approximately 33 percent of total consumption. Overall, the estimates ranged from less than 10 percent to over 90 percent, with 30 percent being the median response. Types ofLighting Equipment Used 3.31 Figures 3-16 and 3-17 show that C/I customers use a variety oflighting technologies, with tube fluorescent and incandescent lamps dominating. Incandescent lamps are used by many customers but account for less than ten percent of all lamps in use. Figure 3-16: o/o of Customers Figure 3-17: °lo of Lamps by Using Lighting Technologies Technology 100% 80% 60% CFL 40"/o Ruor. 5% 20% 82"/. 0% 3.32 Most C/I establishments (75%) use a combination of lighting technologies generally consisting of fluorescent and incandescent lamps, and in many cases employ additional technologies such as CFLs, mercury lamps and halogen lamps. The 25 percent  28 that use only one technology are primarily small commercial enterprises that use only fluorescent lamps. Satisfaction with Lighting Technologies 3.33 Customers are satisfied with their lighting equipment, regardless of type. For each of the major technologies, 95 percent or more of the users saw no reason not to continue using the technology. The primary reason for selecting a technology is whether or not it provides the right kind and/or amount of light. This is particularly so for fluorescent, mercury vapor and halogen lighting, and to a lesser extent for CFLs. Economy/energy efficiency is also a significant rationale for the purchase of fluorescent lamps and CFLs. No one clear rationale other than suitability emerged for using incandescent lamps (e.g. for rooms not needing a lot of light). CFL Usage 3.34 Figure 3-18 provides a breakdown ofCFL and incandescent lighting technology in use. The figure indicates that ten percent of all C/I establishments have replaced all of their incandescent lamps with CFLs, and that a total of 35 percent are using CFLs. Twenty-seven percent have no incandescent or CFL lamps and therefore no applications for CFLs. This means that almost half of C/I establishments that could use CFLs are already using them (35% / 73%). The 38 percent of customers that have incandescent lamps and no CFLs is the target market for a CFL strategy in this sector. Figure 3-18: Comparison of CFL and Incandescent Usage CFU NoCFUlnc. No CFUNo Inc. No Inc. 0% 10% 20% 30% 40% SO% 60% 70% 80% 90% 100% CFL Users Assessment 3.35 CPL-users are found in all C/I sectors and business sizes, although large firms are more likely than small to be users of CFLs. The majority of users (90%) are using integral ballast style CFLs. Twenty-two percent are using separate ballast style lamps, meaning that some are using both types (see Figure 3-19). 3.36 As Figure 3-20 indicates, the primary reason for purchasing CFLs was to save on energy consumption (57% cited this as the rationale for purchase). Another 25 percent purchased the lamps primarily because they provided improved (brighter) lighting. Most  29 (59%) saw no deterrent to CFL pmchase, although the high price of a CFL was stated most often by those who saw deterrents to purchase. ,• Figure 3-19: Usage by Ballast Figure 3-20: Reasons for Type Using CFLs 60% 50% 40Vo Separate 30°,{, 14% 20% 10% 0% 10th 7% •Lower Consumption •Better Lighting ODurablllty DAesthetic 3.37 Philips has the largest market share for CFLs in the C/I sectors. Seventy-five percent of CFL users (and 88% of integral ballast CFL users) use Philips lamps. Other popular integral ballast brands are National, cited by 10 percent of customers, and Hitachi, cited by 6 percent. Among separate ballast CFLs, Osram is the most popular brand, with approximately 50 percent of users owning these lamps. Sylvania and GE were the next most popular separate ballast CFL brands. 3.38 The primary reason for selecting a particular CFL brand was availability: 35 percent stated that the brand they purchased was "the only brand available." The data indicates that Philips lamps, much more so than others, were purchased because Philips is a "well-known brand." After availability, lamps other than Philips were most likely to be selected because of their perceived durability (see Figure 3-22).  30 Figure 3-21: Brand Market Share Figure 3·22: Reasons for Brand Selection 35% 30% &% National 25% Phillps 20% 60Vo 15% 6% Sylvania 10o/. 5% 0% •Only Brand Avail. •Brand Loyalty/Familiarity C Perceived Brand Attributes DRecommended by Other •Cheaper 3.3 9 Pmchase quantities varied quite significantly. Among small and medium size companies using integral ballast CFLs, most pmchased fewer than ten CFLs at a time, and average purchase quantities were 4.8 and 6.4 respectively. Among large companies using integral ballast CFLs,(those with cons~ption over 5,000 lWh/month and over 200 lamps of all kinds) purchase quantities ranged from less than 10 to 300 CFLs at a time and averaged 40. Figure 3-23: Purchase Quantities 60 40 30 20 10 o.Wml•L-_.• Small Medium Large Size of Business •lntsgml •Separate 3.40 · Fifty-three percent of CFL-using establishments are first-time buyers/users of CFLs. This was generally true across all types of business, although larger firms and manufacturers were more likely than others to be repeat pmchasers. Many (46%) purchased their CFLs at a retail outlet such as a hardware store. 'Pmchasing at a retail outlet was most common among small and medium size companies; over 60 percent of these companies purchased at retail outlets. Most others purchased through distributors or went directly to the manufacturer; over 60 percent of large companies purchased their CFLs in this manner.  31 3 .41 The receiving room or lobby is the most likely location for a CFL, reported by 36% of users. Other popular locations are offices (29%), hallways (22%) and grounds/exteriors/par.king areas (16%). Usage in areas such as the factory floor or dining rooms is much less prevalent, found in fewer than 5 percent of CFL-user establishments. These trends were relatively consistent across all users, regardless of size or business type. The survey also found that 25 percent had installed new fixtures to accommodate the CFLs, which roughly matches the percentage using separate ballast lamps. Satisfaction with CFLs 3.42 Commercial and industrial sector CFL users are generally quite satisfied with the product. In all categories, except "value for money," CFLs were given average satisfaction ratings between 4 and 5 on a 5-point satisfaction scale. "Value for money" received an average satisfaction rating of 3.8. Almost all found the lamps to be easy to instal~ and to provide better light than the lamps they replaced. Most were satisfied with the energy savings and durability of the lamps. The primary sources of dissatisfaction with CFLs were the cost, cited by ,13 percent of tho5e surveyed, and the dimness, cited by 8 percent. 3.43 The majority ofCFL-users intend to buy CFLs again. Sixty-three percent stated they would definitely purchase CFLs again and 33 percent state they would likely purchase CFLs again. Only one surveyed customer stated they would definitely not purchase a CFL again. · Problems Encountered with CFLs 3.44 Most CFL users (85%) have had no problems with their lamps. Below are the problems cited by the 16 customers claiming to have had problems: • Slow to light up 6 • Breaks easily during power fluctuations 4 . • Does not last as long as claimed 3 • Difficult to install 2 • Does not light up when voltage is low 1  32 CFL Non-User Assessment CFL Awareness and Knowledge ofProduct Attributes 3.45 The survey gathered data on the awareness and product attribute knowledge of CFLs among non-users. Figures 3-23 summarizes the findings. 10 Figure 3-24: CFL Awareness Among Non-users Knowledgeable 18% Have Wrong Not aware Perceptions 56% 17% No Knowledge/ No Perceptions 9% 3.46 ··Fifty-six percent ofCFL non-users were not aware of the technology. Of the 44% who were aware ofCFLs, 18% had some knowledge of the product's attributes while 26% had no or incorrect knowledge and perceptions. 3.47 Among non-users, the main reason for not using CFLs is that they have no ready application. (Recall that 40 percent of non-users do not use incandescent lamps and therefore could not use CFLs.) The high price of CFLs and concerns about the amount of light that they provide were the next most important reasons for not using them. Selling Points · 3.48 By all measures, energy efficiency is the product attribute that has the most appeal to customers. CPL-users cited efficiency as the main reason for purchase. Eighty-one percent of non-users noted efficiency as the most appealing attribute when shown CFL advertisements. Also, when asked to rate the importance of various product attributes in the purchase decision, efficiency was cited as being very important by over 77% of customers, reliability by 76%, price by 44% and aesthetics by 24%. 3 .49 While cost is clearly an obstacle to CPL purchase, the survey data indicate that increased knowledge of the product's attributes can significantly reduce this barrier. After s,eeing print advertisements for CFLs, only 11 % of C/I non-users stated that the high price of the lamps would prevent them from purchasing them. This likely 10 Figure 3.13 is based on the awareness of 195 surveyed non-users of CFLs. Customers who were aware of the product (85 out of the 195) were asked a series of questions about CFL prices. energy consumption. and life expectancy to assess their knowledge of the product's attributes.  33 understates the effect cost would have on purchase, even assuming an effective education campaign. However, it does indicate that customers are willing to invest in CFLs once they are aware of their economic benefits. 3.50 When asked to rank entities that could most influence their decision to purchase a CFL, C/I customers stated that the lamp manufacturers and MERALCO had equal influence, and far more than other actors such as the ERB, NAPOCOR and friends.  34 4. THE ECONOMICS AND SAVINGS POTENTIAL OF CFLS A. THE ECONOMICS OF CFLs 4.1 The economics ofCFLs are fairly simple. In exchange for an up-front investment in a more expensive product, the consumer enjoys lower operating costs over time that typically repay the initial investment many times over, even on a discounted basis. The following two examples illustrate the economics of CFLs for residential and commercial/industrial customers. Residential Sector 4.2 This scenario assumes that an 18 watt CFL replaces a 60 watt incandescent lamp (IL) in order to provide 8,000 hours of light in the residential sector. It is assumed that the lamps operate four hours per day. One 300 peso (P300) CFL would displace eight ILs costing a total of P130, for a difference of P170. (All cost figures are in present value terms, based on a real discount rate of 12%, unless otherwise noted.) Over its lifetime, the CFL would consume 1,530 kWh, costing P370, while the ILs would consume 5,100 kWh, costing Pl,230, for a difference of P860. Thus the Pl 70 investment in the CFL would return P860 over its life, for a net saving of P690 and a benefit-cost ratio of 5.0. The CFL's simple payback would be 1.4 years; that is, annual savings of PlOO would pay back the undiscounted P140 incremental cost of the CFL after 1.4 years. Table4-l CFL/IL Comparison: Residential Sector (Present Value@ 12%) 60JV/ncandescent 18JVCFL Difference Equipment Cost P130 P300 (P170) Energy Cost Pl,230 P370 P860 Total Pl,360 P670 P690 Benefit/Cost Ratio 5.0 Simple Payback 1.4 years Assumptions: Lamp lifespan: CFL: 8,000 hours IL: 1,000 hours Lamp costs: CFL: 300 pesos IL: 20 pesos Electricity tariff: 3.26 pesoslk:Wh Discount rate 12% Hours of operation per day: 4 CommerciaVlndustrial Sector 4.3 This scenario assumes that the 18 watt CFL replaces the 60 watt IL in the commercial/industrial sector. It is assumed that the lamps operate 12 hours per day. The CFL would displace 8 ILs, representing an investment of Pl SO. (Again, all cost figures are discounted at 12%. This investment is less than in the residential scenario because the  35 incandescents are purchased sooner, representing a higher cost in present value terms and, in tum, a smaller incremental investment for the CFL.) The CFL' s operation would cost P3 90 (higher than above due to a higher tariff) while the ILs would cost P 1,290, for a difference of P900. Thus the Pl SO investment in the CFL would return P900 over its life, for a net saving of P750 and a benefit-cost ratio of 6.0. The CFL's simple payback under this scenario would be 3 months. Table4-2 CFL/IL Comparison: Commercial/Industrial Sector (Present Value@ 12%) 60W Incandescent JBWCFL Difference Equipment Cost Pl50 · P300 (Pl SO) Energy Cost Pl,290 P390 P900 Total Pl,440 P690 P750 Benefit/Cost Ratio 6.0 Simple Payback 3 months Assumptions: Lamp lifespan: CFL: 8,000 hours IL: 1,000 hours Lamp costs: CFL: P300 . IL: P20 Electricity tariff: 2.83 pesos/kWh Discount rate 12% Hours of operation per day: 12 B. ENERGY SAVINGS POTENTIAL 4.4 .This section presents preliminary estimates of economic energy savings potential of both CFLs and energy-efficient tube fluorescent lamps and ballasts. 11 While this study focused on CFLs, the latter products are included here for reference. The estimates are preliminary and presented simply to indicate the general magnitude of potential energy savings. Further analysis of energy savings potential would be warranted in the context of the development ofa CFL or energy-efficient lighting strategy. Residential Sector 4.5 Fluorescent and incandescent lamps account for roughly 70% and 30%, respectively, of lighting energy use in the residential sector. Opportunities for efficiency improvements exist in both technologies. Incandescent lamps can be replaced with CFLs while tube fluorescent lamps and ballasts can be replaced with more energy-efficient products. · II Economic savings potential encompasses energy efficiency opponunities that are cost-effective or profitable. It is smaller than technical savings potential which ignores economic factors and larger than achievable savings potential which takes into account market banicrs.  36 CFLs 4.6 Most but not all incandescent lamps(ILs) in the residential sector are candidates for replacement with CFLs. Those that are not consume too little electricity to make the investment economic, either because their wattage is too low or because they are not operated enough hours of the day. Analysis revealed that replacing 25W ILs that operate two hours per day, or 40W ILs that operate one hour per day, generates positive benefit- cost ratios (using a 12% discount rate) and a simple payback of four years or less. Replacing lamps with larger wattages or higher daily hours of operation would generate even ~ter benefits. 4. 7 For the purposes of this report, the minimum criteria for economic energy savings potential is either a positive benefit-cost ratio at a 12% discount rate or a simple payback of 4 years or less. More than three quarters of the ILs in the residential sector, or over 4.5 million lamps, fall above this minimum criteria. While detailed information is not available, these lamps likely consume 90 percent or more of the electricity used by incandescent lamps, and 27 percent or more of the electricity used by all lighting, in the residential sector. Since CFLs offer savings of approximately 70 percent relative to incandescent lamps, the economic savings potential of CFLs is roughly 190/o of total residential lighting energy (70% of 27%). . 4.8 Residential lighting in MERALCO's service territory consumes an estimated 680 GWh per year and accounts for an estimated 470 MW of the system peak~ The economic savings potential ofCFLs therefore translates into roughly 130 GWh per year and 90 MW during the peak period. Tube Fluorescent Lamps and Ballasts 4.9 The fluorescent equipment currently available in the Philippines is relatively inefficient, including 20 and 40 watt fluorescent tubes and magnetic ballasts with losses of 20 percent or more. Efficient fluorescent tubes, which provide 10 percent savings, and efficient magnetic ballasts, which provide five to ten percent savings, are not readily available in the Philippines at this time. The combined economic savings potential of these energy-efficient products is approximately 14 percent of all residential sector lighting energy use, or 95 GWh per year and 65 MW during the peak period. Commercial/Industrial Sector 4.10 Fluorescent lamps provide the majority of light and consume the majority of lighting energy in commercial and industrial (C/I) buildings. Incandescent lamps represent roughly 8 percent of all lamps and likely less than ten percent of all C/I lighting energy consumption. Nevertheless, efficiency opportunities exiSt:. CFLs 4.11 Virtually all incandescent lamps in the C/I sector are eligible for cost-effective replacement by CFLs. Since they consume an estimated 10% ofC/I lighting energy, the  37 economic savings potential of CFLs is roughly 7 percent of all lighting energy consumption (70% of 10%). 4.12 C/l lighting in MERALCO's service territory consumes an estimated 2,200 GWh per year and accounts for an estimated 250 MW of the system peak. Tue economic savings potential of CFLs therefore translates into roughly 150 GWh per year and 20 MW during the peak period. 4J3 . Figure 4-1 shows the target markets for a CFL program. Tue primary market is the 40% of C/I customers with incandescent lamps in place but no CFLs. A secondary market is the 23% of C/I customers who have both CFLs and incandescent lamps. Figure 4-1: CFL Program Target Markets Not Ellglble Primary Market CFUNolnc. 10•1' 40% NoCFU No Inc. 2791' Secondary Market Tube Fluorescent Lamps and Ballasts 4.14 Like the residential sector, the C/I sector provides numerous opportunities to reduce energy consumption through the use of energy-efficient tube fluorescent lamps and ballasts. Full penetration of these products in the Philippines could save up to 14 percent of all C/I sector lighting energy use, or 310 GWh per year and 35 MW during the peak period.  38 5. FINDINGS AND RECOMMENDATIONS Lighting Energy Use 5.1 Lighting accounts for 15% to 20% of residential, 30% to 40% of commercial and 20% of industrial electricity consumption and represents a major component of MERALCO's daily peak load. CFL Performance Assessment 5.2 The FATL tests found that many CFLs failed before their expected 8,000 hour lifetime under low voltage conditions and some even under optimal voltage conditions. Of the 9 integral and adapter ballast CFLs tested, only one performed acceptably in all performance categories. 5.3 While the prevalence of poor quality CFLs is a concern, the one example of a good quality integral ballast CFL demonstrates the feasibility of designing a product that withstands the rigors of the Philippine electrical system. It is recommended that any CFL promotion strategy include strict performance criteria for product reliability, efficacy and light oqtput (even under poor voltage conditions). It is further recommended that the perfo~ce criteria and tests set out in Chapter 2 of this report serve as the basis for product certification in any CFL strategy. 5.4 The tests found wired ballast CFLs to be efficient and reliable products for use in the Philippines. However, the low power factors of these CFLs is a problem and it is recommended that power factor correction be incorporated in establishments using these lamps. CFL Market Assessment 5.5 An estimated 35% of commercial and industrial (C/I) customers in MERALCO's service territory, and an estimated 50% ofC/I customers with potential CFL applications. are already using CFLs. These are surprisingly high figures that demonstrate market acceptance of the product. Only 8% of residential customers are using CFLs. 5.6 Most CFL users are satisfied with the product's performance. Fifteen percent of C/I and only 4% of residential CFL users have experienced problems. CFL Savings Potential 5.7 In the C/I sector, replacing virtually all incandescent lamps with CFLs is cost- effective. In MERALCO's service territory, the complete replacement of these incandescent lamps with CFLs could net annual savings of over 150 GWh and a 20 MW reduction in peak demand.  39 5.8 In the residential sector, replacing over 75% of all incandescent lamps with CFLs is estimated to be cost-effective. These lamps likely account for 90% of the electricity consumed by incandescents in MERALCO' s residential customer base. The complete replacement of these lamps could save as much as 130 GWh per year and reduce peak demand by 90 MW. Table 5-1 Economic Savings Potential of CFLs in MERALCO's Service Territory Sector Energy Savings Demand Savings (GWh/year) (MW) Residential 130 90 Commercial/Industrial ISO 20 Total 280 110 Tube Fluorescent Savings Potential 5.9 The study found that tube fluorescent lamps are the dominant technology in the Philippines, accounting for approximately 70% of lighting energy consumption in all sectors. While the assessment of fluorescent lamps and ballasts was beyond the scope of this study, it was apparent that the products available in the Philippines are less efficient than current state-of-the-art technology. A switch from current technology to reduced wattage tubes and efficient magnetic ballasts could save up to 400 GWh per year and reduce·peak demand by 100 MW in MERALCO's service territory. An assessment of reduced wattage fluorescent tubes (36W and 32W) and efficient magnetic and electronic ballasts is recommended. Voltage Fluctuation 5.10 Voltage fluctuation is significant in the Philippines. Fluctuations exceeding 30 volts on a daily basis were identified, affecting the performance and reliability of all electrical equipment in the country. Reducing these large voltage fluctuations would result in significant economic savings through improved grid efficiency, end-use efficiency and extended operating life of electrical equipment. A more detailed study of voltage fluctuation throughout the Philippines is recommended to better document the problem and to identify regions where the promotion of efficient technologies, such as CFLs, ·is feasible from a technical perspective. (CFLs should n~t be promoted in regions where 'voltage levels are consistently below the recommended operating range of a CFL, orwhere fluctuations exceed 10% of the rated voltage.)  40 FATL'sRole 5.11 The role played by the Fuels and Appliance Testing Laboratory (FATL) in this project demonstrated the importance oflocal capability to test the performance of energy- using products and equipment. A CFL strategy in the Philippines will require independent testing like that provided by the FATL to certify lamps and guarantee energy savings. The FATL' s lighting testing capability should therefore be maintained by the Department of Energy. 5.12 Similarly, other Asian countries that pursue CFL strategies will require this type of testing. Given the high start-up costs of a new lighting test facility, in terms of equipment and training, it may be less expensive for these countries to contract FATL to provide performance testing services rather than establish a new facility. The FATI, should.investigate the market for·its services among other Asian nations. Next Steps 5.13 This report contains important information for DSM stakeholders in the Philippines, including CFL manufacturers, DOE and MERALCO. It is recommended that these and other concerned stakehol~ ineet in a workshop setting to review the report and decide on next steps, if any.