Report: Concept Consulting evaluation of the economic and environmental benefits of significant LED uptake

Executive summary

Concept has evaluated a proposal by Ecobulb for the government to fund the provision of highly efficient lightbulbs to New Zealand homes during 2023. This February 2023 report is an update of an evaluation undertaken in October 2021. The main changes for this updated evaluation are:

• Putting the start date of the programme back a year

• Higher wholesale generation price projections, and associated (higher) carbon intensities of generation, due to revised market outlooks as to the pace of renewable development

• Lower peak network costs, following more recent work in this area

• Using a 5% real discount rate, rather than 6%.

All values in this report are in real, $2021.

Ecobulb’s central proposal is for a programme resulting in approximately 70% of households

receiving 10 lightbulbs each. Ecobulb have indicated the cost of the programme would be

approximately $50m.

We have assessed the likely benefit to New Zealand from this initiative in terms of reduced costs relative to a counter-factual ‘business-as-usual’ (BAU) case where the uptake of highly-efficient bulbs continues at relatively slow rates. As detailed in Figure 1 below, the net present value of the reduced costs projected out to 2040, minus the $50m up-front cost, is $850m (evaluated using a 5% real discount rate). An 18:1 benefit:cost ratio is excellent relative to other uses of public funding.

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