Cree’s (Nasdaq: CREE) new contract with the federal government comes with strings attached – 2.3 million of them, in fact.
The U.S. Energy Department will help underwrite the cost of developing a new design for linking LED lights. Cree, a global leader in LED design and production, also must provide funding, dollar for dollar.
The intent is to bring down the costs of LED product manufacturing and thus lower prices. The project also aims to further improve LED efficiency and quality.
Cree recently launched sales of a $10 LED bulb.
“With the support of a $2.3 million Energy Department investment, Cree will develop a modular design for LED lights that can link together multiple units to fit larger areas,” the Energy Department said Tuesday.
“The design will also use less raw material, reducing manufacturing costs while ensuring high lighting quality and efficiency. Cree’s approach will design and manufacture the different components of an LED fixture – including electrical, mechanical and optical systems – as one, seamless product, helping to further reduce assembly costs and ensure strong performance.”
The Cree award is one of four totaling $10 million that were announced Tuesday. All focus on either light-emitting diodes (LEDs) or organic light-emitting diodes (OLEDs).
“This partnership with industry to produce affordable, efficient lighting will save consumers money and create American jobs,” said Energy Secretary Ernest Moniz. “It’s another example of how energy efficiency is a win-win proposition for our economy.”
The Energy Department notes that LED lighting, in which Cree is a leader, grew to 49 million units in 2012 from 4.5 million units two years earlier.
“These installations, which include common indoor and outdoor applications such as recessed lighting and streetlights, are expected to save about $675 million in annual energy costs,” the agency said. “During the same period, the cost of an LED replacement bulb has fallen by about 54 percent. Switching entirely to LED lights over the next two decades could save the U.S. $250 billion in energy costs and reduce electricity consumption for lighting by nearly 50 percent. By 2030, LED lighting is projected to represent about 75 percent of all lighting sales, saving enough energy to power approximately 26 million U.S. households.”