SAN JOSE -- Clean-tech venture capitalists have taken a shine to Silicon Valley makers of LEDs and other bright lights, seeing a growing potential for these semiconductor-based light sources in streetlights and parking lots, in concert venues and gymnasiums.
According to the Cleantech Group, a San Francisco researcher and conference organizer, venture-capital investments into lighting technologies reached $100 million in 2008's first quarter. That ranked behind only biofuel and solar among clean-tech categories.
"The way we light things today uses 25 percent of our energy in the United States," said Alain Harrus, a partner at Crosslink Capital, a San Francisco venture firm with investments in two lighting companies, Intematix in Fremont and Luxim in Sunnyvale. "The opportunity is there to switch to a much more efficient way of using the electricity."
Most consumers know LEDs (light-emitting diodes) as the twinkles on their Christmas trees, the numbers on their calculators, the source of light on their cell phones. But they're increasingly found in televisions, medical devices and streetlights. Some suspect they'll soon be used in new homes.
Investors are trying to find products that use less energy but do the job as well as existing sources.
Or better, said Tony McGettigan, the chief executive officer of Luxim.
"Edison's invention to banish the night was one of the most important inventions of the last century," he said during an interview at the company's headquarters. "But the light sources of today aren't exactly doing what you want them to do."
Governments are working to eliminate incandescent bulbs, which are inefficient energy hogs. A bill in California's Assembly to ban the bulbs failed in 2007, but the state has mandated improved lighting efficiency. And the energy bill signed by President Bush late last year requires a nationwide boost in efficiency, which most see as the end of incandescents in the United States.
Compact fluorescent lights, or CFLs, are touted as a replacement, but they contain traces of mercury, must be recycled and the light quality is imperfect, said Mark Swoboda, CEO of BridgeLux.
Advances with LEDs, including better white color and lower prices, have changed the formula, making them an increasingly realistic alternative. "Technology has broken the barrier," he said.
That's attracting lighting companies -- big and small, local and global -- as well as big customers.
Wal-Mart, which sold more than 100 million CFLs to customers in 2007, is using more LEDs in its stores, said Matt Kistler, the company's director of sustainability.
Coupled with motion sensors, LEDs work well in refrigerators and freezers in Wal-Mart's grocery aisles, he said. They turn on when customers walk by, and turn off when nobody is near. They're cooler than incandescent lights, saving energy. They last longer, so Wal-Mart saves money.
Home Depot shoppers will find a few LED light choices now.
For years, said Michael Siminovitch, director of the California Lighting Technology Center at the University of California at Davis, LEDs have been seen as a holy grail for energy-efficient lighting.
That time is near, he said. "We've rounded the corner on this. There are a lot of applications today, in both residential and commercial, where it makes better sense to use LEDs."
But, he argues, CFLs are an energy-efficient, underutilized and available light source before LEDs become fully ready for prime time.