Energy-efficient lighting investments are starting to trickle back onto the scene after cleantech deals plunged in the first quarter. On Tuesday, Braemar Energy Ventures raised its bet on lighting with a $10 million investment in Hawthorne, Calif.-based Fulham Inc., a 7-year-old company that makes components for fluorescent lights, high-intensity lights and light-emitting diodes.
The deal comes just over a month after plasma lighting startup Luxim Corp., based in Sunnyvale, Calif., raised $12 million and Austin, Texas-based Nuventix, which has developed an electronics-cooling technology for LED lights, raised $4 million of an $18 million round.
To investors, the potential for growth in the energy-efficient lighting sector is clear. It’s poised for a boost from legislation, which could enhance the existing appeal of lower electricity bills. (Lighting accounts for about a quarter of U.S. electricity use, with most of that coming from commercial buildings, according to the Energy Information Administration.)
The United Kingdom began a voluntary phase-out of 100-watt incandescent light bulbs at the beginning of this year and Australia passed an incandescent-bulb ban that begins in 2010. Meanwhile, the United States requires bulbs to be 25-30 percent more energy efficient starting in 2012, for 100-watt bulbs, and in 2014, for 40-watt bulbs, with both reaching 70 percent higher efficiency by 2020.
The stimulus package also is expected to boost the efficient-lighting market. Lighting isn’t specifically named in the package, but is expected to be included in projects that will make public buildings, including federal buildings, public housing and schools, more efficient.
Fulham is the fourth lighting company Braemar has backed in the last two years, along with Nuventix; Laser Light Engines, a laser-based lighting startup that closed $5 million last year; and Luminus Devices, an LED company that closed $72 million last year.
Braemar sees energy-efficient lighting as a key investment area, said managing director Dennis Costello, who spends almost all of his time on lighting plays these days. The four deals represent about 15 percent of the company’s cleantech investments, he said. But he added that the percentage will likely subside as the company closes a few more deals in other sectors.
Fulham makes ballasts, which regulate the electrical voltage and current needed to operate fluorescent lights, high-intensity lights and LEDs. The Darnell Group, a research firm, expects the global ballast market to grow to $11 billion from $6.5 billion over the next five years.
Fulham hopes to help the market move from incandescent bulbs to fluorescent lighting, and eventually to more efficient — and today, much more expensive — light-emitting diodes. The company plans to use its new cash to develop new products for LED and induction lighting, which use a magnetic field to create light, a spokesperson said.