IKEA Chief: We're Leading America's LED Lighting Revolution

IKEA is setting out to change the way you light your home, one bulb at a time.

The Swedish retailer announced plans this week to become the first U.S. home furnishings chain to sell only LED (light emitting diode) bulbs and lamps by 2016 -- a bold push for the widespread adoption of this energy-efficient light source in the American market.

The world's biggest home retailer will phase out its non-LED lighting over the next few years.

Integral to that plan is educating the U.S. consumer about the many benefits of LED lighting: LEDs are not only more eco-friendly than incandescent bulbs, but also use 85% less energy and are therefore less expensive over time, Mike Ward, president of IKEA USA, told DailyFinance.

But selling the idea won't be a slam dunk, as the initial cost outlay for LED bulbs far exceeds that of incandescent bulbs, Ward concedes. A 40-watt LED bulb costs about $12 at IKEA, whereas an incandescent bulb ranges from approximately 49 cents to 79 cents.

But what most Americans (about 73%) don't know is that LED bulbs last 20 years, according to Wakefield Research cited by IKEA. Incandescent bulbs, by contrast, last only about a year, Ward said.

So far in the U.S., only about 40% of homes have an LED light source -- compared to 60% to 70% of European homes and 80% of Chinese households.

So the onus is on IKEA to answer the obvious consumer question: "'Why would I spend $12 [on a light bulb]?' he said. "We need to tell the story that there is an energy savings [with LED bulbs, which also] help to reduce the carbon footprint: We know there is a huge interest [among consumers] when it comes to trying them out because they're much better for the environment and save a lot of money."

To help incentivize shoppers to make the switch, IKEA has committed to offering the lowest priced LED bulb in the U.S., even undercutting rivals like Home Depot (HD). "We'll maintain a price difference from our competitors," Ward said.

While the price of a 40-watt LED bulb starts at about $14 today, IKEA is selling them for about $12, he said, "and we'll be reducing the prices in stages every year between now and 2016."

Right now, the total annual cost savings of swapping out a 40-watt incandescent bulb for an LED bulb is $6.25, which includes the bulb's purchase price and the energy consumption cost, according to IKEA.

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Beyond the savings, the retailer also wants to drive home the message that the light from LEDs "is beautiful, creates atmosphere and can be dimmed," Ward said.

Shoppers can also expect to see a renaissance in lighting design, now that manufacturers no longer have to design around the traditional clunky round light bulb, as LED lamps are powered by "tiny little diodes," he said.

Like many European retailers, IKEA was eco-friendly before green became trendy in the U.S., so this latest move should come as little surprise.

IKEA's green conscience dates back to the 1960s, when it developed its flat-pack shipping strategy -- designed to reduce transportation costs to mitigate the impact of fuel usage on the environment.

The retailer phased out plastic bags in 2007, stopped selling incandescent bulbs in 2010, and will phase out CFLs (compact florescent light) and halogen bulbs by 2016.

"We've made it our mission to let people live a more sustainable life at home," Ward said.