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The End of an Era: Are Neon Signs Becoming Obsolete?

Nick Ferengi's picture
Founder and Editor CAGR Value

Nick is the editor of CAGRValue, a finance blog focused on growth investing, At CAGRValue, we explore the most exciting markets, industries and economies in terms of growth and try to pick out...

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The power industry continues to go through a series of revolutionary developments across the entire supply chain. However, coverage tends to focus more on technological advances in energy production than consumption. 

From the perspective of consumption, electric cars are a major highlight, they continue to play a key role in the shift towards a world free of fossil fuels. This is the dream for everyone including myself who believes in climate change. 

However, unlike in the power production side where the power industry is divided into six main verticals (Wind/Ocean currents, Petroleum/Shale gas, Coal, Solar, Hydro, and Nuclear), the other end can be split into several endpoints, which include lighting, among others.

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And in lighting, this segment is further subdivided to include regular home lighting, roads and highway lighting, and neon signs for business advertising, among others. 

Now, over the last few years, business owners have grown more fond of LED neon signs for use in their businesses and this has caused a shift in the market with traditional neon signs seemingly losing a chunk of the market share. There are valid reasons why some people would be more interested in LED neon signs than traditional neon signs.

LED neon signs are environmentally friendly

From an environmental perspective, Lead Emitting Diodes (LEDs) are considered green because even after serving their useful life, their disposal does not pollute the environment. LEDs are recyclable, and this boosts their attractiveness to environmentally sensitive people. Traditional neon signs, on the other hand, can be toxic to the environment because they use mercury, and therefore, must be disposed of with care.

LEDs are highly efficient in energy consumption

This is probably one of the strongest selling points of LED neon signs compared to traditional neon lights. Statistically, one foot of the traditional neon light consumes about 20 watts of electricity every hour. In comparison, according to custom neon, an LED neon tube of the same length and thickness can consume as low at 1.2 watts over the same period. This works out to about 15:1 in the ratio of power consumption between LED neon lights and the traditional neon signs. From a cost perspective, depending on the number of neon signs a business has put out to advertise, this can result in massive savings on neon signs advertising.

LED neon lights outlive traditional neon lights

Traditional neon signs have an average lifespan of about 30,000 hours. This is less than a third of what LED neon signs can give. On average, LED neon signs last more than 100,000 hours, which equates to about 11+ years.

They are also safer to handle because they generate very little heat. On the other hand, traditional neon signs can become hot very quickly when on, and also harbor a higher risk of causing an electric shock.

Conclusion

In summary, the evolution of the power industry is not limited to the production section alone. The consumer segment continues to adapt to the latest technologies as companies try to come up with the most efficient ways of energy consumption. 

And as discussed here, LED neon signs provide an interesting proposition from a business perspective since they are energy-efficient, and most importantly, environmentally friendly.

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Matt Chester's picture
Matt Chester on Oct 31, 2019

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